Stock-Based Compensation

6 Months Ended

Jun. 30, 2015

(6) Stock-Based Compensation

In September 2014, the Company established the 2014 Omnibus Incentive Compensation Plan (“2014

Plan”), which allows for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, performance units and other stock-based awards to purchase an aggregate of 1,288,581 shares of the Company’s common stock to employees, officers, directors, consultants, and advisors. In addition, the 2014 Plan provides selected executive employees with the opportunity to receive bonus awards that are considered qualified performance-based compensation.

Options issued under the 2014 Plan have a contractual life of 10 years and may be exercisable in cash or as otherwise determined by the board of directors. The Company has granted options to employees and non-employees.

In October and December 2014, the Company entered into employment contracts and agreements in connection with the hiring of its key executives and certain consultants and issued stock options to purchase 542,550 shares of common stock with an exercise price of $3.98 per share and 579,882 shares

of restricted common stock that have certain performance-based and time-based vesting criteria. There were no restricted stock awards during the six month period ended June 30, 2015.

In January 2015, the Company entered into an employment contract in connection with the hiring of an executive and issued stock options to purchase 63,829 shares of common stock with an exercise price of $3.98 per share that have certain performance-based and time-based vesting criteria. The stock options vest 25% upon the closing of the Company's IPO and then quarterly over three years following the closing of the Company's IPO.

No expense has been recorded for the stock option grants and restricted stock awards as the vesting of the awards was contingent upon the closing of the Company's IPO. The stock options and restricted stock awards vested 25% upon the closing of the Company’s IPO and then will vest quarterly over three years.

The weighted average fair value of stock options granted in the six months ended June 30, 2015 was estimated at $0.73 per share using the Black-Scholes option pricing model with the following assumptions: expected volatility of 76%, risk free interest rate of 2.0%, expected term of 6 years and 0% expected dividend yield.

As of June 30, 2015, there are stock options to purchase 606,379 shares of common stock outstanding and 579,882 shares of restricted stock outstanding. None of the stock options or restricted stock were vested as of June 30, 2015. As of June 30, 2015, 102,320 shares are available for issuance under the 2014 Plan.

The following table summarizes the stock option activity under the 2014 Plan.


		Weighted
		average
		exercise
		price per
	Options	share
Balance as of December 31, 2014	542,550	$	3.98
Granted	63,829	$	3.98
	606,379	$	3.98