Stock-based Compensation

The Company issues stock-based awards pursuant to its 2010 Stock Incentive Plan, as amended (Plan). As of September 30, 2017, 4,728,520 shares of the Company's common stock were authorized to be issued under the Plan, and 101,090 shares were reserved for future issuance under the Plan. The amount, terms of grants, and exercisability provisions are determined and set by the Company's board of directors. The Company measures employee stock-based awards at grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the award. Stock-based awards issued to non-employees are revalued until the award vests. The Company recorded stock-based compensation expense in the following expense categories of its accompanying consolidated statements of operations for the three and nine months ended September 30, 2017 and 2016:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Research and development	$	411	$	25	$	919	$	323
General and administrative	360		9		881		216
	$	771	$	34	$	1,800	$	539

Service-based stock options

Options issued under the Plan generally have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the board of directors. Vesting generally occurs over a period of not greater than four years. The following table summarizes the activity related to service-based stock option grants to employees and nonemployees for the nine months ended September 30, 2017:



	Shares		Weighted average exercise price per share		Weighted average remaining contractual life
Outstanding at December 31, 2016	1,894,083		$	3.09	6.67
Granted	524,147		5.90
Exercised	—		—
Expired	(2,887	)	5.68
Forfeited	(3,955	)	3.05
Outstanding at September 30, 2017	2,411,388		$	3.70	6.67
Exercisable at September 30, 2017	1,193,791		$	1.99	4.09
Vested and expected to vest at September 30, 2017	2,411,388		$	3.70	6.67

During the nine months ended September 30, 2017, the board of directors approved the grant of time-based options to purchase 524,147 shares of common stock to employees that generally vest over four years. The options had an estimated weighted average grant date fair value of $3.90. The grant date fair value of each option grant was estimated at the time of grant using the Black-Scholes option-pricing model using the following weighted average assumptions:



Risk free interest rate	2.01		%
Expected term (in years)	6.08
Expected volatility	74.06		%
Annual dividend yield	0.00		%
Fair value of common stock	$	3.90

At September 30, 2017, the unrecognized compensation cost related to unvested service-based stock options expected to vest was $3,609. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 3.43 years.

Performance-based stock options

The Company has issued performance-based stock options under the Plan which generally have a ten-year life from the date of grant and may vest upon the achievement of certain milestones in connection with the Company's development programs. Additionally, the Company has issued options in excess of the fair market value of common shares on the issuance date that are only exercisable upon a change in control or upon or after an initial public offering. Compensation expense for performance-based stock options is only recognized when management determines it is probable that the awards will vest.

The following table summarizes the activity related to performance-based stock option grants to employees and nonemployees for the nine months ended September 30, 2017:



	Shares	Weighted average exercise price per share		Weighted average remaining contractual life
Outstanding at December 31, 2016	2,171,760	$	9.59	6.55
Granted	—	—
Exercised	—	—
Forfeited	—	—
Outstanding at September 30, 2017	2,171,760	$	9.59	5.74
Exercisable at September 30, 2017	1,016,600	$	1.96	4.08

As of September 30, 2017, there was $2,301 of unrecognized compensation cost related to unvested performance-based stock options that will vest and be expensed when the occurrence of the performance condition is deemed probable.

Common stock warrants

The Company also has 1,890,489 common stock warrants outstanding with an exercise price of $8.16 per share that expire in 2020.