Common Stock and Stockholders’ Equity

Common Stock

As of December 31, 2017, there were 103,955,147 shares of common stock outstanding. Each share of common stock is entitled to one vote. The holders of the common stock are also entitled to receive dividends whenever funds are legally available and when declared by our Board of Directors.

Public Offering

In July 2017, we completed an underwritten public offering of 50,600,000 shares of common stock at an offering price of $0.91 per share. We received net proceeds from the offering of $43.0 million after deducting underwriting discounts, commissions and other offering expenses payable by us.

Shares Reserved for Future Issuance

The following shares of common stock were reserved for future issuance as of December 31, 2017:



Common stock options outstanding	10,648,523
Restricted stock units outstanding	415,728
Common stock available for future grant under the 2012 Plan	649,590
Common stock available for future grant under the Inducement Plan	41,948
Common stock available for future purchase under the 2012 Employee Stock Purchase Plan	1,675,110
Total common shares reserved for future issuance	13,430,899

The following table summarizes our stock option activity under all equity incentive plans for the year ended December 31, 2017 (shares and aggregate intrinsic value in thousands):



	Number of options		Weighted average exercise price		Weighted average remaining contractual term	Aggregate intrinsic value
Options outstanding at December 31, 2016	8,931		$	6.70
Granted	5,126		$	1.35
Exercised	(11	)	$	0.38
Canceled/forfeited/expired	(3,397	)	$	5.75
Options outstanding at December 31, 2017	10,649		$	4.44	6.46	$	227
Exercisable at December 31, 2017	5,099		$	6.34	3.59	$	119

The weighted average grant date fair value per share of employee stock options granted during the years ended December 31, 2017, 2016 and 2015 was $1.00, $3.47 and $7.47, respectively.

The total intrinsic value of stock options exercised was less than $0.1 million, $0.2 million and $21.4 million during the years ended December 31, 2017, 2016 and 2015, respectively. Cash received from the exercise of stock options was less than $0.1 million for the year ended December 31, 2017 and approximately $0.3 million and $6.7 million for the years ended December 31, 2016 and 2015, respectively.

We granted 415,728 restricted stock units during the year ended December 31, 2017 with a weighted average grant date fair value per share of $0.89. There was no other restricted stock unit activity during the year ended December 31, 2017 and there was no restricted stock unit activity during the years ended December 31, 2016 and 2015.

The total compensation cost related to non-vested awards not yet recognized was $0.3 million as of December 31, 2017. The weighted-average period over which this expense is expected to be recognized is approximately 0.6 years.

Stock-Based Compensation

The following table summarizes the weighted average assumptions used to estimate the fair value of stock options and performance stock awards granted to employees under our 2012 Equity Incentive Plan and 2015 Inducement Plan and the shares purchasable under our Employee Stock Purchase Plan during the periods presented:



	Year ended December 31,
	2017		2016		2015
Stock options
Risk-free interest rate	2.0	%	1.5	%	1.8	%
Volatility	89.4	%	82.7	%	78.9	%
Dividend yield	—		—		—
Expected term (years)	6.1		6.0		6.1
Performance stock options
Risk-free interest rate	2.1	%	1.4	%	1.8	%
Volatility	89.2	%	82.4	%	76.7	%
Dividend yield	—		—		—
Expected term (years)	5.7		5.9		6.0
Employee stock purchase plan shares
Risk-free interest rate	0.9	%	0.5	%	0.1	%
Volatility	105.6	%	93.7	%	76.1	%
Dividend yield	—		—		—
Expected term (years)	0.5		0.5		0.5

Risk-free interest rate - The risk-free interest rate assumption was based on observed interest rates appropriate for the expected term of the stock option grants.

Expected dividend yield - The expected dividend yield assumption was based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends.

Expected volatility - The expected volatility assumption was based on the historical volatility of the trading price of our common stock.

Expected term - The expected term represents the period of time that options are expected to be outstanding. Because we do not have sufficient historical exercise behavior data, we determine the expected life using the simplified method, which was an average of the contractual term of the option and its ordinary vesting period.

Forfeitures - We made an accounting policy election to account for forfeitures as they occur upon adoption of ASU No. 2016-09 in the first quarter of 2017. We applied ASU No. 2016-09 using the modified retrospective method of adoption and recorded an adjustment of $0.6 million to accumulated deficit with a corresponding offset to additional paid-in capital. Prior to adoption, we reduced stock-based compensation expense for estimated forfeitures.

The following table summarizes the allocation of our stock-based compensation expense for all stock awards during the periods presented, including the adjustments to stock-based compensation expense associated with our May 2017 corporate restructuring (in thousands):



	Year ended December 31,
	2017			2016		2015
Research and development	$	2,862		$	5,458	$	8,075
Research and development-restructuring related adjustments	(1,399		)	—		—
General and administrative	3,500			7,414		7,293
General and administrative-restructuring related adjustments	2,679			—		—
Total	$	7,642		$	12,872	$	15,368

In connection with our May 2017 corporate restructuring we recorded a reversal of stock-based compensation in research and development expenses of $1.4 million as a result of the cancellation of unvested stock options. Additionally, we recorded additional stock-based compensation in general and administrative expenses of $2.7 million as a result of termination provisions within certain employment agreements.

The total compensation cost related to non-vested awards not yet recognized was $5.1 million as of December 31, 2017. The weighted-average period over which this expense is expected to be recognized is approximately 2.5 years.

Employee Stock Purchase Plan

In October 2012, we adopted the 2012 Employee Stock Purchase Plan (“2012 Purchase Plan”), which enables participants to contribute up to 15% of such participant’s eligible compensation during a defined six-month period to purchase our common stock. The purchase price of common stock under the 2012 Purchase Plan will be the lesser of: (i) 85% of the fair market value of our common stock at the inception of the enrollment period or (ii) 85% of the fair market value of our common stock at the applicable purchase date. As of December 31, 2017, 740,526 shares of our common stock had been issued under the 2012 Purchase Plan, with 419,342 shares of common stock issued for the year ended December 31, 2017. Under the 2012 Purchase Plan, 1,675,110 shares of our common stock were reserved for future issuance and have been authorized for purchase as of December 31, 2017.

Inducement Plan

On July 17, 2015, our Board of Directors adopted the Inducement Plan, which became effective immediately. Stockholder approval of the Inducement Plan was not required pursuant to Rule 5635 (c)(4) of the NASDAQ Listing Rules. The Inducement Plan initially reserved 1,000,000 shares of common stock and provides for the grant of NSOs that was used exclusively for grants to individuals that were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company.

Under the Inducement Plan, options were granted with varying vesting terms, but typically vest over four years, with 25% of the total grant vesting on the first anniversary of the effective date of the option grant and the remaining grant vesting monthly thereafter over the following 36 months. All options granted under the Inducement Plan expire ten years from the date of grant.

As of December 31, 2017, 41,948 shares were reserved under the Inducement Plan.