10.STOCK OPTIONS

In 2007, the Company adopted the 2007 Employee, Director and Consultant Stock Plan (the “2007 Plan”). Pursuant to the 2007 Plan, the Company’s Board of Directors (or committees and/or executive officers delegated by the Board of Directors) may grant incentive and nonqualified stock options to the Company’s employees, officers, directors, consultants and advisors. As of March 31, 2015, there were options to purchase an aggregate of 399,143 shares of common stock outstanding under the 2007 Plan and no shares available for future grants under the 2007 Plan.

On October 26, 2010, the Company’s Board of Directors adopted the 2010 Equity Incentive Plan, which was subsequently approved by the Company’s shareholders (the “2010 Plan”). The 2010 Plan provides for grants of incentive stock options to employees and nonqualified stock options and restricted common stock to employees, consultants and non-employee directors of the Company. The Company’s shareholders approved subsequent amendments in 2012 and 2013 to increase the number of shares available for issuance under the 2010 Plan. As of March 31, 2015, the number of shares authorized for issuance under the 2010 Plan was 2,750,000 shares. As of March 31, 2015, there were options to purchase an aggregate of 2,205,536 shares of common stock outstanding under the 2010 Plan and 319,916 shares available for future grants under the 2010 Plan. Options issued under the 2007 Plan and the 2010 Plan are exercisable for up to 10 years from the date of issuance.

Share-based compensation (in thousands)

For stock options issued and outstanding for the three months ended March 31, 2015 and 2014, the Company recorded non-cash, stock-based compensation expense of approximately $1,266 and $835, respectively, net of forfeitures.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted in the following table. The Company uses historical data, as well as subsequent events occurring prior to the issuance of the financial statements, to estimate option exercises and employee terminations within the valuation model. The expected term of options granted under the 2007 and 2010 Plans, all of which qualify as “plain vanilla,” is based on the average of the contractual term (10 years) and the vesting period (generally, 48 months). For non-employee options, the expected term is the contractual term. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with the option. The assumptions used principally in determining the fair value of options granted were as follows:

	March 31, 2015

Risk-free interest rate	1.74	%
Expected dividend yield	0.00	%
Expected term (in years)	6.08
Expected volatility	120.07	%

A summary of option activity as of March 31, 2015 and changes for the period then ended are presented below (in thousands, except per share data):

Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
Outstanding at December 31, 2014	2,606,737		$	6.58
Granted	131,250		$	12.08
Forfeited	(42,160	)	$	9.54
Exercised	(91,148	)	$	5.25
Outstanding at March 31, 2015	2,604,679		$	6.85	7.51	$	13,330

Vested at March 31, 2015	1,165,942		$	5.93	5.67	$	7,031

The weighted average grant-date fair value of options granted during the three months ended March 31, 2015 was $10.49 per share. The total fair value of options that vested for the three months ended March 31, 2015 was approximately $2,053. As of March 31, 2015, there was $6,235 of total unrecognized compensation expense related to non-vested share-based option compensation arrangements. The unrecognized compensation expense is estimated to be recognized over a period of 2.78 years at March 31, 2015.