8. Stock‑Based Awards

2012 Equity Compensation Plan

The Company’s 2012 Equity Compensation Plan, as amended and restated (the “2012 Plan”), provides for the Company to sell or issue common stock or restricted common stock, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the board of directors and consultants of the Company. The 2012 Plan is administered by the board of directors or, at the discretion of the board of directors, by a committee of the board. The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors, or their committee if so delegated, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the share of common stock on the date of grant and the term of stock options may not be greater than ten years. The Company generally grants stock‑based awards with service conditions only (“service‑based” awards).

Stock options granted under the 2012 Plan generally vest over four years and expire after ten years.

The total number of shares of common stock that may be issued under the 2012 Plan was 500,262 shares as of December 31, 2014. On August 25, 2015, the Company effected an increase in the number of shares of common stock reserved for issuance under the 2012 Plan from 500,262 shares to 1,539,169 shares.

As required by the 2012 Plan, the exercise price for stock options granted was not to be less than the fair value of common shares as determined by the Company as of the date of grant. The Company valued its common stock by taking into consideration its most recently available valuation of common shares performed by management and the board of directors as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through the date of grant.

As of December 31, 2015, no shares remained available for grant under the 2012 Plan.

2015 Equity Incentive Plan

On September 15, 2015, the Company’s board of directors adopted and on September 16, 2015, the Company’s stockholders approved the 2015 Equity Incentive Plan (the “2015 Plan”), which became effective in connection with the IPO in October 2015. As of the time the 2015 Plan became effective, no further grants may be made under the 2012 Plan. The 2015 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards (“RSUs”), performance stock awards, cash based awards and other stock-based awards. The number of shares initially reserved for the issuance of awards under the 2015 Plan was 2,784,395. The number of shares of common stock that may be issued under the 2015 Plan will automatically increase on January 1 of each year, beginning on January 1, 2016 and ending on January 1, 2025, in an amount equal to the lesser of (i) 4.0% of the shares of the Company’s common stock outstanding on December 31 of the preceding calendar year or (ii) an amount determined by the Company’s board of directors. The shares of common stock underlying any awards that expire, are otherwise terminated, settled in cash or repurchased by the Company under the 2015 Plan and the 2012 Plan will be added back to the shares of common stock available for issuance under the 2015 Plan.

Stock Option Valuation

The assumptions that the Company used to determine the fair value of the stock options granted to employees, non-employees and directors were as follows, presented on a weighted average basis:


	Year Ended		Year Ended
	December 31, 2015		December 31, 2014

Risk-free interest rate	1.78	%	1.87	%
Expected term (in years)	6.3		6.4
Expected volatility	93.9	%	113.9	%
Expected dividend yield	0	%	0	%

The Company recognizes compensation expense for only the portion of awards that are expected to vest. For the year ended December 31, 2015 and December 31, 2014 the Company applied an expected forfeiture rate of 0%. No awards were granted during the year ended December 31, 2013.

Stock Options

The following table summarizes stock option activity under the 2012 Plan and 2015 Plan from January 1, 2013 through December 31, 2015:


					Weighted
			Weighted		Average
			Average		Remaining	Aggregate
	Number		Exercise		Contractual	Intrinsic
	of Shares		Price		Term	Value
					(in years)
Outstanding as of January 1, 2013	—			—	—		—
Granted	—			—
Exercised	—			—
Forfeited and canceled	—			—
Outstanding as of December 31, 2013	—			—	—		—
Granted	500,262		$	1.22
Exercised	—			—
Forfeited and canceled	—			—
Outstanding as of December 31, 2014	500,262			1.22	9.77	$	305
Granted	1,238,262			18.08
Exercised	—			—
Forfeited and canceled	—			—
Outstanding as of December 31, 2015	1,738,524		$	13.23	9.51	$	24,722
Options vested and expected to vest as of December 31, 2015	1,738,524		$	13.23	9.51	$	24,722
Options exercisable as of December 31, 2015	147,672	(1)	$	1.19	8.72	$	3,803

(1)

All options granted to date under the 2012 Plan are exercisable immediately, subject to a repurchase right in the Company’s favor that lapses as the option vests. This amount reflects the number of shares under options that were vested, as opposed to exercisable, as of December 31, 2015.

The weighted average grant date fair value of stock options granted during the years ended December 31, 2015 and 2014 was $13.84 and $1.38 per share, respectively.

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock.

Restricted Stock Units

The Company did not grant any RSUs during the years ended December 31, 2014 and 2013. A summary of the status of the Company's RSUs at December 31, 2015 and of changes in RSUs outstanding under the 2015 Plan for the year ended December 31, 2015 is as follows:


		Weighted
		Average
		Grant Date
	Number	Fair Value
	of Shares	Per Share
Outstanding at December 31, 2014	—	$	—
Granted	53,800		28.68
Vested	—		—
Forfeited and cancelled	—		—
Outstanding at December 31, 2015	53,800	$	28.68

For awards that vest subject to the satisfaction of service requirements, compensation expense is measured based on the fair value of the RSUs on the date of grant and is recognized as expense on a straight-line basis, net of estimated forfeitures, over the requisite service period. All RSUs issued vest over time as stipulated in the individual RSU agreements. In the event of a change in control, the unvested RSUs will be accelerated and fully vested immediately prior to the change in control. There are no performance based features or market conditions.

Stock‑Based Compensation

For the years ended December 31, 2015, 2014 and 2013, the Company recorded stock-based compensation in the following expense categories of its statements of operations and comprehensive loss:


	Year Ended
	December 31,
	2015		2014		2013
Research and development	$	257	$	10	$	—
General and administrative		634		17		—
	$	891	$	27	$	—

As of December 31, 2015, the Company had an aggregate of $19,093 of unrecognized stock‑based compensation cost, which is expected to be recognized over weighted average periods of 3.51 years.