11. Stock-Based Compensation

Stock-Based Compensation Expense. The following table sets forth the Company’s stock-based compensation expense (in thousands).

	Year Ended December 31,
	2016		2015		2014
Stock options and ESPP awards
Research and development	$	62	$	131	$	303
Selling, general and administrative		321		401		837

Restricted stock awards
Research and development		116		576		487
Selling, general and administrative		143		1,467		1,233

Restricted stock units
Research and development		28		10		-
Selling, general and administrative		216		62		-

Total stock-based compensation	$	886	$	2,647	$	2,860

Determining Fair Value of Share-Based Payment Awards. The following table sets forth the Black-Scholes option pricing model assumptions and resulting grant date fair value for stock options granted.

	Year Ended December 31,
	2016			2015			2014
Risk-free interest rate		1.49	%		1.62	%		1.74	%
Expected dividend yield	None			None			None
Expected volatility factor		106.70	%		106.89	%		71.13	%
Expected option life (in years)		5.77			5.77			5.75
Weighted average grant date fair value	$	5.66		$	35.40		$	267.00

Due to the Company’s limited history of grant activity, the expected life of options granted was estimated using the “simplified method” in accordance with SEC Staff Accounting Bulletin 110, where the expected life equals the arithmetic average of the vesting term and the original contractual term of the options. The volatility factor was determined based upon management’s estimate using inputs from comparable public companies. The risk-free interest rate assumption is determined based upon observed interest rates appropriate for the expected term of the Company’s employee stock options. The dividend yield assumption is based on the Company’s history of dividend payouts.

An annual forfeiture rate is estimated at the time of grant for all share-based payment awards, and revised, if necessary, in subsequent periods if the actual forfeiture rate differs from the Company’s estimate. Forfeitures have been estimated by the Company based upon historical and expected forfeiture experience. Estimated forfeiture rates used for the periods presented were from 0% to 5%.

Stock Option Award Activity. Stock option activity under the Company’s option plans at December 31, 2016 and changes during the year ended December 31, 2016 were as follows.

						Weighted-
						Average
				Weighted-		Remaining
				Average		Contractual
	Number of			Exercise		Term		Aggregate
	Options			Price		(years)		Intrinsic Value
Options outstanding at December 31, 2015		24,089		$	535.80			$	-
Granted		1,250			5.66
Canceled or forfeited		(8,424	)		951.23
Exercised		-			-
Options outstanding at December 31, 2016		16,915		$	289.73		7.54	$	-

Options exercisable at December 31, 2016		9,095		$	504.80		6.61	$	-

Options vested and expected to vest at December 31, 2016		16,915		$	289.73		7.54	$	-

The aggregate intrinsic values in the table above represent the total pre-tax intrinsic values (the difference between the closing price of Gevo’s common stock on the last trading day of the 2016 calendar year and the exercise price, multiplied by the number of in-the-money stock option shares) that would have been received by the option holders had all in-the-money outstanding stock options been exercised on December 31, 2016. The total intrinsic value of options exercised during the years ended December 31, 2016, 2015, and 2014 was $0.0 million.

The following table summarizes information associated with outstanding and exercisable stock options at December 31, 2016.

	Options Outstanding						Options Exercisable
					Weighted-						Weighted-
					Average				Weighted-		Average
Range of			Weighted-		Remaining				Average		Remaining
Exercise	Number of		Average Exercise		Contractual Life		Number of		Exercise		Contractual Life
Prices	Options		Price		in Years		Options		Price		in Years
$0.00 to $51.00		14,450	$	40.62		8.61		6,630	$	41.68		8.58
$105.00 to $147.00		80	$	144.90		0.32		80	$	144.90		0.32
$264.00 to $438.00		586	$	368.79		0.44		586	$	368.87		0.44
$462.00 to $1,845.00		801	$	715.51		2.31		801	$	715.51		2.31
$2,331.00 to $3,426.00		637	$	2,938.98		0.39		637	$	2,938.98		0.39
$3,801.00 to $5,742.00		361	$	4,556.47		2.26		361	$	4,556.47		2.26
		16,915						9,095

As of December 31, 2016, $0.7 million of total unrecognized compensation cost related to stock options is expected to be recognized as an expense by the Company in the future over a weighted-average period of approximately one year.

There is a maximum contractual term of 10 years for the share options. The Company settles stock option exercises with newly issued common shares. No tax benefits were realized by the Company in connection with these exercises as the Company maintains net operating loss carryforwards and has established a valuation allowance against the entire tax benefit.

Restricted Stock. The Company periodically grants restricted stock awards to employees and directors. The vesting period for restricted stock awards granted may be based upon a service period or based upon the attainment of performance objectives. The Company recognizes stock-based compensation over the vesting period, generally three to six years, for awards that vest based upon a service period. For performance based restricted stock awards, the Company recognizes expense over the requisite service period.

Non-vested restricted stock awards at December 31, 2016 and changes during the year ended December 31, 2016 were as follows.

				Weighted-
				Average
	Number of			Grant-Date
	Shares			Fair Value
Non-vested at December 31, 2015		16,413		$	54.80
Granted		-			-
Vested		(6,816	)		82.95
Canceled or forfeited		(774	)		46.16
Non-vested at December 31, 2016		8,823		$	47.51

The total fair value of restricted stock that vested during the years ended December 31, 2016, 2015 and 2014 was $1.7 million, $1.4 million, and $1.5 million , respectively. As of December 31, 2016, the total unrecognized compensation expense, net of estimated forfeitures, relating to restricted stock awards was $0.4 million, which is expected to be recognized over a weighted-average period of approximately two years.