7. Stock Based Compensation

The Company has a 2000 Long-Term Incentive Plan, which expired on August 6, 2010. As of March 31, 2015, there were approximately 0.7 million shares subject to outstanding stock options under this plan. No further shares are available for future grant under this plan.

The Company also has a 2008 Stock Incentive Plan. As of March 31, 2015, there were 9.5 million shares subject to outstanding stock options and 0.5 million shares available for future grant under this plan.

The Company follows ASC 718, Compensation-Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees.

For stock options and stock warrants paid in consideration of services rendered by non-employees, the Company recognizes compensation expense in accordance with the requirements of ASC 505-50.

Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period. At the end of each financial reporting period, the value of these options, as calculated using the Black-Scholes option-pricing model, is determined, and compensation expense recognized or recovered during the period is adjusted accordingly. Since the fair market value of options granted to non-employees is subject to change in the future, the amount of the future compensation expense is subject to adjustment until the common stock options are fully vested.

The following table sets forth the total stock-based compensation expense resulting from stock options and warrants included in the Company's unaudited interim statements of operations:

	Three Months Ended March 31,
	2015		2014
Research and development — employee	$	335,938	$	175,153
General and administrative — employee		955,404		311,960
Total employee stock-based compensation	$	1,291,342	$	487,113

Research and development — non-employee	$	—	$	86,539
General and administrative — non-employee		93,551		191,992
Total non-employee stock-based compensation	$	93,551	$	278,531

During the three-month period ended March 31, 2015, the Company granted stock options to purchase 180,000 shares of its common stock, and during the corresponding 2014 period, the Company granted stock options to purchase 270,000 shares of its common stock and warrants to purchase 25,000 shares of its common stock at an exercise price of $5.60. The fair value of the stock options and warrants was estimated using the Black-Scholes option-pricing model, based on the following assumptions:

	Three months Ended March 31, 2015			Three Months Ended March 31, 2014
Risk-free interest rate		2.20	%		1.98	%
Expected volatility		84.3	%		87.8% - 89.6	%
Expected lives (years)		10			6 - 10
Expected dividend yield		0.00	%		0.00	%

The Company's computation of expected volatility is based on the historical daily volatility of its publicly traded stock. The Company uses historical information to compute expected lives. In the three-month period ended March 31, 2015, the contractual term and the expected life of the options granted was ten years. The dividend yield assumption of zero is based upon the fact the Company has never paid cash dividends and presently has no intention to do so. The risk-free interest rate used for each grant and issuance is equal to the U.S. Treasury rates in effect at the time of the grant and issuance for instruments with a similar expected life. Based on historical experience, for the three-month period ended March 31, 2015, the Company has estimated an annualized forfeiture rate of 10% for options granted to its employees, 2% for options granted to senior management and 0% for options granted to directors and non-employees and warrants issued to non-employees. For the comparative three-month period ended March 31, 2014, the Company has estimated an annualized forfeiture rate of 12% for options granted to its employees, 2% for options granted to senior management and 0% for options granted to directors and non-employees. Compensation costs will be adjusted for future changes in estimated forfeitures. The Company will record additional expense if the actual forfeitures are lower than estimated and will record a recovery of prior expense if the actual forfeiture rates are higher than estimated. No amounts relating to stock-based compensation have been capitalized.

As of March 31, 2015, there remained approximately $5.6 million of unrecognized compensation expense related to unvested stock options granted to current and former employees and directors, which expect will be recognized over a weighted-average period of 1.14 years. Presented below is the Company's stock option activity:

	Three months Ended March 31, 2015
	Number of Options (Employees)		Number of Options (Non-Employees)			Total Number of Options			Weighted-Average Exercise Price
Outstanding at January 1, 2015		9,348,592		692,143			10,040,735		$	2.87
Granted		180,000		—			180,000		$	3.15
Exercised, forfeited or expired		—		(56,429	)		(56,429	)	$	8.54
Outstanding at March 31, 2015		9,528,592		635,714			10,164,306		$	2.84
Options exercisable at March 31, 2015		5,528,887		635,714			6,164,601		$	3.14

The following table summarizes significant ranges of outstanding stock options under the Company's plans at March 31, 2015:

Range of Exercise Prices		Number of Options		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price		Number of Options Exercisable		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price
$	1.83 - $2.50		7,932,556		8.74	$	2.19		4,212,622		8.33	$	2.17
$	2.51 – $3.50		954,482		8.89	$	2.85		873,054		8.87	$	2.83
$	3.51 – $8.00		989,201		5.79	$	6.27		790,858		5.01	$	6.50
$	8.01 – $32.55		288,067		2.56	$	9.00		288,067		2.56	$	9.00
			10,164,306		8.29	$	2.84		6,164,601		7.71	$	3.14

The aggregate intrinsic value of outstanding options and options vested as of March 31, 2015 were $9.8 million and $5.5 million respectively, which represents the exercise price of the options below the fair market value of the Company's common stock on March 31, 2015 of $3.37 per share.

There were 7,292,617 and 7,349,760 warrants outstanding at March 31, 2015 and December 31, 2014, respectively at a weighted-average price of $4.29 and $4.27, respectively.

Restricted Stock

On January 1, 2014, the Company granted to Dr. Daniel Levitt, Executive Vice President and Chief Medical Officer, 100,000 CytRx Corporation restricted shares of common stock of the Company pursuant to the 2008 Plan, which shares have now fully vested. The fair value of the restricted stock is based on the market price of the Company's common stock on the grant date less the par value received as consideration. The fair value of the restricted shares granted on January 1, 2014 was $627,000. The stock-based compensation expense relating to restricted stock included in the company's unaudited statements of operations for the three-month period ended March 31, 2014 was $154,578. No restricted shares of common stock of the Company were granted in the first period of 2015.