EQUITY PLANS AND SHARE-BASED COMPENSATION

Share-Based Compensation: The Company measures share-based compensation cost at the grant date based on the fair value of the award and recognizes this cost as an expense over the grant recipients’ requisite service periods for all awards made to employees, officers, directors and consultants.

The share-based compensation expense recognized in the Condensed Consolidated Statements of Operations was as follows:



	For the three months ended September 30,				For the nine months ended September 30,
	2016		2015		2016		2015
Share-based compensation cost included in:
Research and development	$	29,502	$	63,094	$	154,786	$	217,300
Selling, general and administrative	121,294		169,317		553,990		472,611
Total share-based compensation cost	$	150,796	$	232,411	$	708,776	$	689,911

The following table presents share-based compensation expense by type:



	For the three months ended September 30,				For the nine months ended September 30,
	2016		2015		2016		2015
Type of Award:
Stock Options	$	58,271	$	151,998	$	295,229	$	438,995
Restricted Stock Units and Awards	92,525		80,413		413,547		250,916
Total share-based compensation cost	$	150,796	$	232,411	$	708,776	$	689,911

Stock Options: The Company recognized share-based compensation expense for stock options of $295,000 to officers, directors and employees for the nine months ended September 30, 2016 related to stock option awards ultimately expected to vest. The weighted average estimated fair value of employee stock options granted for the nine months ended September 30, 2016 and 2015 was $1.14 and $14.40 per share, respectively. Fair value was calculated using the Black-Scholes Model with the following assumptions:



	For the nine months ended September 30,
	2016	2015
Expected volatility	115%	93%
Risk free interest rate	1%	2%
Expected dividends	—	—
Expected life (in years)	5.8	5.9

Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate of return is based on the yield of U.S. Treasury bonds with a maturity equal to the expected term of the award. Historical data is used to estimate forfeitures within the Company’s valuation model. The Company’s expected life of stock option awards is derived from historical experience and represents the period of time that awards are expected to be outstanding.

As of September 30, 2016, total compensation cost related to non-vested stock options not yet recognized was $165,000 which is expected to be recognized over a weighted average period of approximately 1.2 years. As of September 30, 2016, 70,828 shares were vested or expected to vest in the future at a weighted average exercise price of $46.53. As of September 30, 2016, 182,160 shares remained available for future grants under the Option Plan.

Restricted Stock: In addition to the stock options discussed above, the Company recognized share-based compensation expense related to restricted stock grants of $414,000 for the nine months ended September 30, 2016. The weighted average estimated fair value of restricted stock grants for the nine months ended September 30, 2016 and 2015 was $1.97 and $22.20 per share, respectively.

Total unrecognized share-based compensation expense from unvested restricted stock as of September 30, 2016 was $127,000 which is expected to be recognized over a weighted average period of approximately 0.3 years. As of September 30, 2016, 82,245 shares were expected to vest in the future. As of September 30, 2016, 490,048 shares remained available for future grants under the Restricted Stock Plan.