9. Stock-Based Compensation

Option and Equity Plans

In January 2014, the Company’s board of directors increased the aggregate number of shares issuable under the 2012 Employee, Director and Consultant Equity Incentive Plan (the “2012 Plan”) to 3,000,000, which was approved by the shareholders in February 2014.

The total number of shares available for grant under the 2012 Plan at December 31, 2014 was 113,914.

Stock Options

A summary of the Company’s stock option activity for the year ended December 31, 2014 was 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, 2014 and the exercise price of each option.

The weighted average grant date fair value of options granted during the years ended December 31, 2014 and 2013 was $1.67 and $0.07, respectively. The total intrinsic value of options exercised during the years ended December 31, 2014 and 2013 was $0 and $900,000, respectively, calculated as the difference between the exercise price of the underlying stock option awards and the estimated fair value of the Company’s common stock on the date of exercise. Cash received from option exercises for the years ended December 31, 2014 and 2013 was $0 and $77,000, respectively. The Company recorded no tax benefit related to options exercised during the years ended December 31, 2014 and 2013.

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.

No options were granted to employees during the year ended December 31, 2013. The following weighted average assumptions were used in the calculation to estimate the fair value of options granted to employees during the year ended December 31, 2014:

Restricted Stock Awards

Restricted stock awards (“RSA”) activity for the year ended December 31, 2014 was as follows:

The total fair value of RSAs vested during the years ended December 31, 2014 and 2013 was $3.0 million and $110,000, respectively.

In February 2013, employees of the Company elected to exchange 93,968 stock options for an equal number of restricted stock units (“RSUs”) pursuant to a one-time tender offer approved by the board of directors. The RSUs vested upon the expiration of a lock-up period in connection with an underwritten public offering of shares of the Company’s common stock. The incremental fair value on the date of the exchange, representing the difference between the value of the original stock options and the value of the RSUs issued of approximately $758,000 was recognized during the year ended December 31, 2014.

Stock-Based Awards Granted to Nonemployees

The Company from time to time grants options to purchase common stock or restricted stock awards to non-employees for services rendered and records expense ratably over the vesting period of each award and records expense ratably over the vesting period of each stock option award. The Company estimates the fair value of the stock options using the Black-Scholes-Merton valuation model at each reporting date. The Company granted 165,387 options and 94,560 restricted stock awards to non-employees and recorded stock-based compensation expense of $712,000 during the year ended December 31, 2014. The Company granted 13,191 options and 13,121 restricted stock awards to nonemployees and recorded $248,000 in stock-based compensation expense during the year ended December 31, 2013.

The following assumptions were used in the Black-Scholes-Merton valuation model related to non-employee stock options granted during the years ended December 31, 2014 and 2013:

Summary of Stock-Based Compensation Expense

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

Unrecognized stock-based compensation at December 31, 2014 was as follows (in thousands):