Stockholders' Equity

3 Months Ended

Mar. 31, 2015

Stockholders' Equity

Stockholders' Equity

9. Stockholders’ Equity

2012 Equity Incentive Plan

As of March 31, 2015, under the 2012 Equity Incentive Plan, the Company may grant shares, stock units, stock appreciation rights, performance cash awards and/or options to employees, directors, consultants, and other service providers. For options, the per share exercise price may not be less than the fair market value of a Company common share on the date of grant. Awards generally vest over four years and expire 10 years from the date of grant. Options generally become exercisable as they vest following the date of grant.

A summary of stock option activity for the three months ended March 31, 2015 under all of the Company’s options plans is as follows:

		Weighted
		Average
		Exercise
	Options	Price
Outstanding at December 31, 2014	2,677,774	$	4.24
Granted	1,797,000		0.45
Exercised	—		—
Cancelled (forfeited)	(453,953)		3.91
Cancelled (expired)	—		—
Outstanding at March 31, 2015	4,020,821	$	2.59

The weighted average fair value of options granted during the three months ended March 31, 2015 was $0.29 per share.

2012 Employee Stock Purchase Plan

The Employee Stock Purchase Plan, or ESPP, provides eligible employees with the opportunity to acquire an ownership interest in the Company through periodic payroll deductions, based on a six-month look-back period, at a price equal to the lesser of 85% of the fair market value of the ordinary shares at either the beginning or ending of the relevant offering period. The ESPP is structured as a qualified employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986. However, the ESPP is not intended to be a qualified pension, profit sharing or stock bonus plan under Section 401(a) of the Internal Revenue Code of 1986 and is not subject to the provisions of the Employee Retirement Income Security Act of 1974. The ESPP will terminate on January 15, 2033 unless sooner terminated. There were 168,469 shares initially authorized for issuance under the plan, and the first offering period commenced June 1, 2014 and ended on October 31, 2014. Subsequent offering periods will each be six months in duration and will commence on November 1st and May 1st each year.

Stock-Based Compensation

The Company recorded stock-based compensation expense in the condensed consolidated statements of comprehensive loss as follows:

	Three Months
	Ended March 31,
(in thousands)	2015		2014
General and administrative	$	142	$	226
Research and development		163		265
	$	305	$	491

In addition, during the three months ended March 31, 2015, the Company recorded charges of $0.4 million and $0.4 million relating to the fair value of stock options which were modified due to executive retirement and restructuring activities, and classified them as general and administrative expenses and research and development expenses, respectively.

At March 31, 2015, the Company had $2.0 million of total unrecognized stock-based compensation expense, net of estimated forfeitures, related to outstanding stock options that will be recognized over a weighted-average period of 1.8 years.