9. Stock-Based Compensation

A summary of the Company’s outstanding stock option activity for the nine months ended September 30, 2017, is as follows:

The Company estimates the fair value of each stock option on the grant date using the Black-Scholes-Merton valuation model, which requires several estimates including an estimate of the fair value of the underlying common stock on grant date. The expected volatility was based on an average of the historical volatility of a peer group of similar companies. The expected term was calculated utilizing the simplified method. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The following weighted average assumptions were used in the calculation to estimate the fair value of options granted to employees during the nine months ended September 30, 2016 (no options were granted for the nine months ended September 30, 2017):

Summary of Stock-Based Compensation Expense

Total stock-based compensation expense included in the condensed consolidated statements of operations is allocated as follows (in thousands):

Unrecognized stock-based compensation as of September 30, 2017 is as follows (in thousands):

9. Stock-Based Compensation

Option and Equity Plans

In May 2016, the stockholders of the Company approved common shares issuable under the 2012 Employee, Director and Consultant Equity Incentive Plan (the “2012 Plan”) of 95,202 shares. The total number of shares available for grant under the 2012 Plan at December 31, 2016 was 75,600.

Stock Options

A summary of the Company’s stock option activity for the years ended December 31, 2016 and 2015 is as follows:

The aggregate intrinsic value in the table above is calculated as the difference between the estimated fair value of the Company’s stock at December 31, 2016 and the exercise price of each option.

The weighted average grant date fair value of options granted during the years ended December 31, 2016 and 2015 was $0.84 and $5.32, respectively.

The Company estimates the fair value of each stock option on the grant date using the Black-Scholes valuation model, which requires several estimates including an estimate of the fair value of the underlying common stock on grant date. The expected volatility was based on an average of the historical volatility of a peer group of similar companies. The expected term was calculated utilizing the simplified method. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The following weighted average assumptions were used in the calculation to estimate the fair value of options granted to employees for the years ended December 31, 2016 and 2015:

Restricted Stock Award

During the year ended December 31, 2015, the Company issued 1,500 Restricted stock awards (“RSA”) with a weighted average grant date fair value of $57.60 per share. Such shares vested in 2015 and the Company recorded $87,000 of stock-based compensation for RSAs during the year ended December 31, 2015.

There was not RSA activity during the year ended December 31, 2016.

Stock-Based Awards Granted to Nonemployees

The Company from time to time grants options to purchase common stock or restricted stock to non-employees for services rendered and records expense ratably over the vesting period of each award. The Company estimates the fair value of the stock options using the Black-Scholes valuation model at each reporting date. No stock options were granted to non-employees during the year ended December 31, 2015. The Company granted 1,500 RSAs to non-employees and recorded stock-based compensation expense of $87,000 during the year ended December 31, 2015. The Company did not grant any RSA’s or stock options to non-employees in 2016. Total non-employee options were 897 number of shares with a total expense of $6,795 in 2016. These amounts are included in the tables above. 

Summary of Stock-Based Compensation Expense

Total stock-based compensation expense included in the consolidated statements of operations was allocated as follows (in thousands):

Unrecognized stock-based compensation at December 31, 2016 and 2015 were as follows (in thousands):