9. Stock Based Compensation

We have a 2000 Long-Term Incentive Plan, which expired on August 6, 2010. As of June 30, 2016, there were approximately 0.6 million shares subject to outstanding stock options under this plan. No further shares are available for future grant under this plan.

We also have a 2008 Stock Incentive Plan. As of June 30, 2016, there were 14.0 million shares subject to outstanding stock options and 5.9 million shares available for future grant under this plan. On July 12, 2016, our shareholders voted to amend the 2008 Stock Incentive Plan increasing the number of common shares available for future grant by 10 million shares.

We follow 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, we recognize 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. As a result, 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 our Condensed Statements of Operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Research and development — employee	$	507,195	$	392,842	$	988,006	$	728,780
General and administrative — employee		2,499,368		1,744,440		3,156,418		2,699,844
Total employee stock-based compensation	$	3,006,563	$	2,137,282	$	4,144,424	$	3,428,624

Research and development — non-employee	$	—	$	—	$	—	$	—
General and administrative — non-employee		32,506		140,533		220,462		234,084
Total non-employee stock-based compensation	$	32,506	$	140,533	$	220,462	$	234,084

During the six-month period ended June 30, 2016, we granted stock options to purchase 425,000 shares of its common stock and warrants to purchase 500,000 shares of our common stock at a average weighted exercise price of $1.74. In the three-month period ended June 30, 2016, we amended the terms of stock options of a former executive in respect of a Retirement Agreement, resulting in a one-time expense of approximately $1.9 million. During the six-month period ended June 30, 2015, we granted stock options to purchase 550,000 shares of our common stock. The fair value of the stock options was estimated using the Black-Scholes option-pricing model, based on the following assumptions:

	Six Months Ended June 30, 2016			Six Months Ended June 30, 2015
Risk-free interest rate		1.47	%		2.21	%
Expected volatility		76.3	%		78.2% - 84.4	%
Expected lives (years)		5 - 10			6 - 10
Expected dividend yield		0.00	%		0.00	%

Our computation of expected volatility is based on the historical daily volatility of our publicly traded stock. We use historical information to compute expected lives. In the six-month period ended June 30, 2016, the contractual term of the options granted was ten years. The dividend yield assumption of zero is based upon the fact we have never paid cash dividends and presently have 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 six-month periods ended June 30, 2016 and 2015, we estimated annualized forfeiture rates of 10% for options granted to our employees, 2% for options granted to senior management and 0% for options granted to directors and non-employees and for warrants issued to non-employees Compensation costs will be adjusted for future changes in estimated forfeitures. We 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.

As of June 30, 2016, there remained approximately $12.3 million of unrecognized compensation expense related to unvested stock options granted to current and former employees, directors, to be recognized as expense over a weighted-average period of 1.06 years. Presented below is our stock option activity:

	Six Months Ended June 30, 2016
	Number of Options (Employees)			Number of Options (Non-Employees)		Total Number of Options			Weighted-Average Exercise Price
Outstanding at January 1, 2016		13,583,862			635,714		14,219,576		$	3.10
Granted		425,000			—		425,000		$	2.22
Exercised, Forfeited or Expired		(623,284	)		—		(623,284	)	$	3.88
Outstanding at June 30, 2016		13,385,578			635,714		14,021,292		$	3.04
Options exercisable at June 30, 2016		8,651,113			635,714		9,286,827		$	3.34

The following table summarizes significant ranges of outstanding stock options under our plans at June 30, 2016:

Range of Exercise Prices		Total Number of Options		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price		Total Number of Options Exercisable		Weighted-Average Remaining Contractual Life (years)		Weighted-Average Exercise Price
$	1.83 - $2.00		1,224,500		6.45	$	1.83		1,224,500		6.45	$	1.83
$	2.01 – $2.50		8,395,558		8.70	$	2.32		4,071,021		8.25	$	2.30
$	2.51 – $4.00		1,047,693		7.75	$	2.86		910,194		7.57	$	2.86
$	4.01 – $32.55		3,353,541		6.62	$	5.34		3,081,112		6.54	$	5.38
			14,021,292		7.93	$	3.04		9,286,827		7.38	$	3.31

The aggregate intrinsic value of all outstanding options and vested options as of June 30, 2016 was $0.8 million and $0.6 million, respectively, representing options with exercise prices of less than the closing fair market value of our common stock on June 30, 2016 of $2.23 per share.

There were 8,359,618 and 7,225,472 warrants outstanding at June 30, 2016 and December 31, 2015, respectively at a weighted-average exercise price of $3.96 and $4.28, respectively.