Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
Stock-Based Compensation
Option and Equity Plans
In May 2015, the stockholders of the Company approved an increase in the aggregate number of common shares issuable under the 2012 Employee, Director and Consultant Equity Incentive Plan (the “2012 Plan”) 1,000,000 shares to 4,586,181 shares.
The total number of shares available for grant under the 2012 Plan at September 30, 2015 was 1,483,015.
Stock Options
A summary of the Company’s stock option activity for the nine months ended September 30, 2015 is as follows:
 
Options
 
Weighted-Average
Exercise Price
Outstanding at December 31, 2014
1,383,479

 
$
5.13

Granted
1,684,759

 
$
0.90

Exercised
—

 
—

Forfeited
(997,014
)
 
$
2.85

Expired
(360,533
)
 
$
2.88

Outstanding at September 30, 2015
1,710,691

 
$
2.78

Exercisable at September 30, 2015
593,090

 
$
6.25

Vested and expected to vest at September 30, 2015
1,665,095

 
$
2.83


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 nine months ended September 30, 2015 and 2014:
 
Nine Months Ended September 30,
2015
 
2014
Weighted-average risk-free interest rate
1.64
%
 
1.84
%
Weighted-average expected life (in years)
6.3

 
6.3

Expected dividend yield
—
%
 
—
%
Weighted-average expected volatility
48
%
 
48
%

Restricted Stock Awards
Restricted stock awards (“RSA”) activity for the nine months ended September 30, 2015 was as follows:
 
Number of Awards
 
Weighted-Average
Grant Date
Fair Value
Unvested at December 31, 2014
—

 
$
—

Granted
30,000

 
$
0.75

Vested
(30,000
)
 
$
0.75

Forfeited
—

 
$
—

Unvested at September 30, 2015
—

 
$
—


The total fair value of RSAs vested during the nine months ended September 30, 2015 was $23,000.
The Company recorded $23,000 of stock-based compensation for RSAs during the nine months ended September 30, 2015.  
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 options were granted to non-employees during the nine months ended September 30, 2015. The Company granted 30,000 RSAs to non-employees and recorded stock-based compensation expense of $23,000 during nine months ended September 30, 2015.
The following assumptions were used in the Black-Scholes valuation model related to non-employee stock options granted during the nine months ended September 30, 2014:
Weighted-average risk-free interest rate
2.66
%
Weighted-average expected life (in years)
9.9

Expected dividend yield
—
%
Weighted-average expected volatility
44
%

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):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
2015
 
2014
 
2015
 
2014
Cost of revenue
$
11

 
$
10

 
$
45

 
$
225

Research and development
8

 
505

 
167

 
1,304

General and administrative
46

 
715

 
405

 
6,192

Selling and marketing
11

 
554

 
163

 
2,265

Capitalized into inventory
20

 
243

 
66

 
865

Total stock-based compensation expense
$
96

 
$
2,027

 
$
846

 
$
10,851


Unrecognized stock-based compensation at September 30, 2015 was as follows (in thousands):
 
Unrecognized Stock-Based Compensation
 
Weighted Average Remaining Period of Recognition (in years)
Stock options
$
566

 
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