5. Stockholders’ Equity

Equity Offerings

On December 14, 2015, the Company entered into an at the market, or ATM, sales agreement with Cowen and Company, LLC, or Cowen, to offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.001 per share, having an aggregate offering price of up to $75.0 million through Cowen as its sales agent. Sales of the shares are deemed to be “at the market offerings”, as defined in Rule 415 under the Securities Act of 1933, as amended. The Company is required to pay Cowen a commission of up to three percent of the gross sales proceeds and has provided Cowen with customary indemnification rights. In the first quarter of 2018, the Company issued and sold 5,204,893 shares of common stock under this ATM facility at a weighted average price per share of $1.81. The net offering proceeds to the Company were approximately $9.2 million after deducting related expenses, including commissions. As of March 31, 2018, approximately $11.2 million of the $75.0 million remained available under the ATM facility.

Equity Incentive Plans

The Company utilizes equity incentive plans to grant various forms of stock options and restricted stock to eligible employees, directors and consultants to the Company. Under all of such plans, the amount, terms of grants and exercisability provisions are determined by the board of directors or its designee. The term of the options may be up to 10 years, and options are exercisable in cash or as otherwise determined by the board of directors. Vesting generally occurs over a period of not greater than 4 years. For performance-based stock awards, we recognize expense when achievement of the performance factor is probable, over the requisite service period.

The estimated grant-date fair value of the Company’s stock-based awards is amortized ratably over the awards’ service periods. Stock-based compensation expense recognized was as follows (in thousands):


	Three Months Ended March 31,
	2018		2017
Research and development	$	358	$	707
General and administrative		1,140		1,088
Total stock-based compensation	$	1,498	$	1,795


	Options Outstanding
				Weighted
				Average
		Weighted		Remaining
		Average		Contractual
	Number of	Exercise		Term
	Shares	Price		(in years)
Balance, December 31, 2017	8,624,223	$	5.22	7.2
Granted	2,600,625		1.79
Exercised	(88,048)		0.65
Forfeited/Cancelled	(739,557)		5.14
Balance, March 31, 2018	10,397,243	$	4.40	8.01
Vested or expected to vest at March 31, 2018	10,397,243	$	4.40	8.01
Exercisable at March 31, 2018	4,186,575	$	5.49	6.23

The intrinsic value of the options exercisable as of March 31, 2018 was $0.3 million, based on the Company’s closing stock price of $1.64 per share and a weighted average exercise price of $5.49 per share. At March 31, 2018, there was $13.7 million of total unrecognized compensation expense related to unvested options that will be recognized over the weighted average remaining period of 2.38 years.

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options at the grant date. The Black-Scholes model requires the Company to make certain estimates and assumptions, including estimating the fair value of the Company’s common stock, assumptions related to the expected price volatility of the Company’s stock, the period during which the options will be outstanding, the rate of return on risk-free investments and the expected dividend yield for the Company’s common stock.

The per-share weighted-average grant date fair value of the options granted to employees and directors during the three months ended March 31, 2018 and 2017 was estimated at $1.19 and $3.35 per share, respectively, on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:


	Three Months Ended
	March 31,
	2018		2017
Expected term of options (in years)	5.8		6.3
Risk-free interest rate	2.7	%	2.1	%
Expected volatility	76.0	%	75.7	%
Dividend yield	0	%	0	%

Shares Available for Future Grant

At March 31, 2018, the Company has the following shares available to be granted under its equity incentive plans:


		Inducement
	2013 Plan	Plan
Available at December 31, 2017	991,613	293,000
Authorized	2,492,431	—
Granted	(2,505,625)	(95,000)
Forfeited/Cancelled	687,057	52,500
Available at March 31, 2018	1,665,476	250,500

Shares Reserved for Future Issuance

At March 31, 2018, the Company has reserved the following shares of common stock for issuance:


Stock options outstanding under 2013 Plan		10,147,743
Shares available for future grant under 2013 Plan		1,665,476
Stock options outstanding under Inducement Plan		249,500
Shares available for future grant under Inducement Plan		250,500
Employee stock purchase plan		225,806
Warrants outstanding		123,091
Total shares of common stock reserved for future issuance		12,662,116