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STOCK-BASED COMPENSATION
12 Months Ended
Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION
Share-Based Compensation
Equity Incentive Plan    
The Company has in place a stock option plan (the "Stock Option Plan") for the benefit of employees, directors, officers and consultants of the Company. In May 2013 our Board of Directors adopted the 2013 Equity Incentive Plan (the "2013 Plan"). The 2013 Plan was approved by our stockholders in connection with the Arrangement. The 2013 Plan is a continuation of and successor to the Stock Option Plan and no further grants will be made under the Stock Option Plan. As of December 31, 2014, there were 0.4 million stock options available to be issued.
To date, share-based compensation awards under either the Stock Option Plan or the 2013 Plan consist of incentive and non-qualified stock options. Stock options granted under each of the plans must have an exercise price equal to at least 100% of the fair market value of our common stock on the date of grant and generally vest over four years. The Stock Option Plan has contractual terms ranging from five to seven years and the 2013 Plan has contractual terms ranging from seven to ten years.

The following table summarizes our stock option activity and related information for the year ended December 31, 2014:
 
Number of
options
 
Weighted
average
exercise
price
 
Weighted-Average Remaining Contractual Term (years)
 
Aggregate Intrinsic Value (millions)
Balance, December 31, 2013
968,923

 
$
11.13

 
 
 
 
Granted
599,410

 
$
18.64

 
 
 
 
Exercised
(76,224
)
 
$
11.20

 
 
 
 
Canceled/forfeited
(34,640
)
 
$
15.44

 
 
 
 
Expired
(2,609
)
 
$
55.80

 
 
 
 
Balance, December 31, 2014
1,454,860

 
$
14.00

 
 
 
 
Options exercisable at December 31, 2014
431,088

 
$
12.25

 
7.0
 
$
3.21

Options vested and expected to vest at December 31, 2014
1,383,082

 
$
14.89

 
8.1
 
$
6.83


The total intrinsic value of stock options exercised was $0.6 million and $0.2 million for the years ended December 31, 2014 and 2013, respectively. The Company received total cash of $0.9 million and $0.5 million for the exercise of options for the years ended December 31, 2014 and 2013. There were no options exercised during the year ended December 31, 2012. The total fair value of options vested during the years ended December 31, 2014, 2013, and 2012 was $3.0 million, $2.0 million, and $2.4 million respectively. Upon option exercise, the Company issues new shares of our common stock.
Total share-based compensation expense by operating statement classification is presented below (in thousands):
 
Year ended December 31,
 
2014
 
2013
 
2012
Research and development expense
$
2,565

 
$
245

 
$
817

General and administrative expense
4,485

 
2,947

 
1,192

 
$
7,050

 
$
3,192

 
$
2,009


In the years ended December 31, 2014, 2013 and 2012, no share-based compensation expense was capitalized and there were no recognized tax benefits associated with the share-based compensation charge.
The fair value of options granted is estimated at the date of grant using the Black-Scholes option pricing model. The assumptions used for the specified reporting periods and the resulting estimates of weighted-average estimated fair value per share of options granted during those periods are as follows:
 
 
Year Ended
December 31,
 
 
2014
 
2013
 
2012
Risk-free interest rate
 
2.1%
 
2.0%
 
1.2%
Dividend yield
 
—%
 
—%
 
—%
Volatility factor
 
113.0%
 
112.9%
 
116.4%
Expected term (in years)
 
6.7
 
7.0
 
4.4
Weighted average estimated fair value per share
 
$16.09
 
$9.75
 
$9.00

Risk-Free Interest Rate - The risk-free interest rate is the rate for periods equal to the expected term of the stock option based on either the Canadian Treasury yield (for grants prior to July 16, 2013), or U.S. Treasury zero-coupon bonds (for grants after July 16, 2013).
Dividend Yield - The dividend yield is based on the Company’s history and expectation of dividend payouts. The Company has not paid, and does not intend to pay, dividends.
Volatility Factor - The expected volatility assumption was determined by examining the historical volatility of the Company's stock.
Expected Term - The expected term represents the weighted average period the stock options are expected to be outstanding. Prior to the fourth quarter of 2013, the Company estimated the life of the options using historical data as well as various assumptions regarding the Company's expected progress on its development programs. As a result of the Arrangement, beginning in the fourth quarter of 2013, the Company began to use the simplified method for estimating the expected term as provided by the Securities and Exchange Commission. The simplified method calculates the expected term as the average time-to-vesting and the contractual life of the options. The Company believes this methodology is more appropriate as the Company's historical stock option activity is no longer predictive of future activity due to the Arrangement, the Company's listing on NASDAQ and subsequent delisting from the TSX and the organizational changes announced on October 1, 2013.
The total compensation cost not yet recognized as of December 31, 2014 related to non-vested option awards was $7.1 million which will be recognized over a weighted-average period of 1.5 years.

2013 Employee Stock Purchase Plan

In May 2013, the Company's Board of Directors adopted the ESPP. The ESPP was approved by the Company's stockholders in connection with the Arrangement. In December 2014, the ESPP became effective and the first purchase period began. The ESPP permits eligible employees to make payroll deductions to purchase up to $25,000 of the Company’s common stock on regularly scheduled purchase dates at a discount. Offering periods under the ESPP are not more than six months in duration and shares are purchased at 85% of the lower of the closing price for the Company’s common stock on the first day of the offering period or the date of purchase. The ESPP initially authorized the issuance of 300,000 shares of the Company’s common stock pursuant to rights granted to employees for their payroll deductions. As of December 31, 2014, no shares have yet been issued out of the plan.