Stock Incentive Plans

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Incentive Plans

Stock Incentive Plans

The following table summarizes activity under the Company’s stock option plans (aggregate intrinsic value in thousands):

	Shares Available for Grant		Stock Options Outstanding		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Balance—December 31, 2015	1,058,359		4,179,521		$8.03	7.50	$6,511
Additional options authorized	1,107,411		—
Granted	(1,420,050	)	1,420,050		6.17
Canceled	131,166		(124,161	)	10.80
Exercised	—		(113,266	)	2.50
Balance—June 30, 2016	876,886		5,362,144		$7.59	7.89	$2,861
Options vested and exercisable—June 30, 2016			2,381,926		$6.97	6.49	$2,791
Options vested and expected to vest—June 30, 2016			5,056,829		$7.59	7.81	$2,855

The aggregate intrinsic value was calculated as the difference between the exercise price of the options to purchase common stock and the fair market value of the Company’s common stock, which was $5.03 per share as of June 30, 2016.

The weighted average fair value of options to purchase common stock granted was $3.30 and $5.36 for the six months ended June 30, 2016 and 2015, respectively.

The weighted-average fair value of stock options exercised was $1.69 and $2.12 per option for the six months ended June 30, 2016 and 2015, respectively. The intrinsic value of stock options exercised was $383,000 and $1.2 million for the six months ended June 30, 2016 and 2015, respectively.

Stock-based Compensation

The following table summarizes stock-based compensation expense related to stock options and the Company's employee stock purchase plan (“ESPP”) for the three and six months ended June 30, 2016 and 2015 (in thousands of dollars):

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Cost of revenue	$	33	$	15	$	63	$	32
Research and development	340		342		640		595
Selling and marketing	395		321		803		590
General and administrative	909		811		1,667		1,495
Total stock-based compensation expense	$	1,677	$	1,489	$	3,173	$	2,712

As of June 30, 2016, the Company had $12.0 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over an estimated weighted-average period of 2.74 years.

The estimated grant-date fair value of employee stock options was calculated using the Black-Scholes option-pricing model, based on the following assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2016	2015	2016	2015
Weighted-average volatility	55.88 – 56.29%	59.10 – 65.28%	55.88 – 56.36%	59.10 – 68.82%
Weighted-average expected term (years)	5.50 – 6.08	5.50 – 6.08	5.50 – 6.23	5.50 – 6.08
Risk-free interest rate	1.24 – 1.37%	1.58 – 2.03%	1.24 – 1.77%	1.55 – 2.03%
Expected dividend yield	—	—	—	—

There were no stock options granted to non-employees during the six months ended June 30, 2016 and 2015.

The estimated grant date fair value of shares granted under the Company's ESPP was calculated using the Black-Scholes option-pricing model, based on the following assumptions:

	Three and Six Months Ended June 30, 2016
Weighted-average volatility	67.71 – 75.72%
Weighted-average expected term (years)	0.49 – 1.00
Risk-free interest rate	0.47%
Expected dividend yield	—