Stock-based Compensation | Stock-based Compensation 2009 Stock Option Plan The Company had a share-based compensation plan (the “2009 Stock Option Plan”) under which the Company granted options to purchase shares of common stock to employees, directors, and consultants as either incentive stock options or nonqualified stock options. Incentive stock options could be granted with exercise prices not less than 100% to 110% of the fair market value of the common stock. Options granted under the plan generally vest over three to four years and expire in 10 years from the date of grant. 2014 Equity Incentive Plan In February 2014, the Company’s board of directors adopted the 2014 Equity Incentive Plan, or the 2014 Plan, which was subsequently ratified by its stockholders and became effective on May 2, 2014 (the “Effective Date”). The 2014 Plan is the successor to and continuation of the 2009 Stock Option Plan. As of the Effective Date, no additional awards will be granted under the 2009 Stock Option Plan, but all stock awards granted under the 2009 Stock Option Plan prior to the Effective Date will remain subject to the terms of the 2009 Stock Option Plan. All awards granted on and after the Effective Date will be subject to the terms of the 2014 Plan. The 2014 Plan provides for the grant of the following awards: (i) incentive stock options, (ii) nonstatutory stock options, (iii) stock appreciation rights, (iv) restricted stock awards, (v) restricted stock unit awards, and (vi) other stock awards. Employees, directors, and consultants are eligible to receive awards. Under the 2014 Plan, after giving effect to the increases to the share reserve approved by the Company’s stockholders in September 2014, and June 2015, discussed below, the aggregate number of shares of common stock that could be issued from and after the Effective Date (the “share reserve”) could not exceed the sum of (i) 1,122,731 new shares, (ii) the shares that represented the 2009 Stock Option Plan’s available reserve on the Effective Date, and (iii) any returning shares from the 2009 Stock Option Plan. Under the 2014 Plan, the share reserve will automatically increase on January 1 st of each year, for a period of not more than 10 years, commencing on January 1, 2015 and ending on January 1, 2024, in an amount equal to 4.0% of the total number of shares of capital stock outstanding on December 31 st of the preceding calendar year. The board of directors may act prior to January 1 st of a given year to provide that there will be no increase in the share reserve or that the increase will be a lesser number of shares than would otherwise occur. On June 18, 2014, the Company’s board of directors and compensation committee approved an amendment of the 2014 Plan, subject to stockholder approval, to increase the aggregate number of shares of the Company’s common stock that may be issued under the 2014 Plan by an additional 351,653 shares. All other material terms of the 2014 Plan remained unchanged. The Company’s stockholders approved the 2014 Plan amendment on September 11, 2014. Pursuant to the terms of the 2014 Plan, on January 1, 2015, the Company automatically added 340,484 shares to the total number shares of common stock available for future issuance under the 2014 Plan. On February 25, 2015, the Company's board of directors approved an amendment of the 2014 Plan, subject to stockholder approval, to increase the aggregate number of shares of common stock that may be issued pursuant to awards under the 2014 Plan by an additional 510,726 shares. The Company's stockholders approved the 2014 Plan amendment on June 4, 2015. All other material terms of the 2014 Plan otherwise remain unchanged. As of December 31, 2015 , there were 552,415 shares of common stock available for future issuance under the 2014 Plan. See Note 19 for certain events occurring after December 31, 2015 that affected the number of shares of common stock available for future issuance under the 2014 Plan. 2015 Inducement Plan On March 26, 2015, the Company's board of directors adopted the 2015 Inducement Plan, or the 2015 Plan. The 2015 Plan provides for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other forms of equity compensation (collectively, stock awards), all of which may be granted to persons not previously employees or directors of the Company, or following a bona fide period of non-employment, as an inducement material to the individuals’ entering into employment with the Company within the meaning of NASDAQ Listing Rule 5635(c)(4). The 2015 Plan has a share reserve covering 450,000 shares of common stock. During the year ended December 31, 2015 , the Company granted options to purchase 285,000 shares of the Company's common stock under to the 2015 Inducement Plan. As of December 31, 2015 , there were 165,000 shares of common stock available for future issuance under the 2015 Plan. Option Valuation Method The fair value of a stock option is estimated using an option-pricing model that takes into account as of the grant date the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock, and the risk-free interest rate for the expected term of the option. The Company has used the simplified method in calculating the expected term of all option grants based on the vesting period. Compensation costs related to share-based payment transactions are recognized in the financial statements upon satisfaction of the requisite service or vesting requirements. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company based its estimated forfeiture rate on historical forfeitures of all stock option grants. The Company has elected to use the Black-Scholes option-pricing model. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable rather than for use in estimating the fair value of stock options subject to vesting and transferability restrictions. Using the Black-Scholes option-pricing model, the weighted-average fair value of options granted during 2015 and 2014 was $4.79 and $6.24 per option, respectively. The aggregate fair value of options granted during 2015 and 2014 was $4,217 and $3,249 , respectively. The assumptions used to estimate fair value and the resulting grant date fair values are as follows: Employees Nonemployees Years Ended December 31, Years Ended December 31, 2015 2014 2015 2014 Expected dividend yield — — — — Weighted average expected volatility 64.42% 68.57% 63.46% 64.10% Weighted average risk-free interest rate 1.60% 2.05% 1.62% 1.75% Weighted average expected term (in years) 6.07 6.04 5.32 5.30 Forfeiture rate 5.00% 5.00% 5.00% 5.00% The activity for the 2009 Plan, 2014 Plan and 2015 Plan for the years ended December 31, 2015 and 2014 is summarized as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding — January 1, 2014 137,610 $ 25.86 5.23 $ 3,097 Granted 520,887 9.53 (1) Exercised (416 ) 20.40 Canceled (42,759 ) 9.57 Outstanding — December 31, 2014 615,322 $ 9.55 9.48 $ 265 Exercisable — December 31, 2014 192,916 $ 9.44 9.48 $ 88 Vested or expected to vest — December 31, 2014 572,926 $ 9.55 9.48 $ 247 Outstanding — January 1, 2015 615,322 $ 9.55 9.48 $ 265 Granted 880,116 $ 8.17 Exercised — $ — Canceled (115,711 ) $ 9.05 Outstanding — December 31, 2015 1,379,727 $ 8.71 7.18 $ — Exercisable — December 31, 2015 635,548 $ 9.41 4.56 $ — Vested or expected to vest —December 31, 2015 1,342,518 $ 8.73 7.11 $ — (1) The weighted average exercise price table takes into consideration the effect of the option award modifications approved by the Company's board of directors on June 18, 2014, and approved by the Company's shareholders on September 11, 2014. These option award modifications are described in further detail below. The intrinsic values in the table above represent the total intrinsic value (the difference between the Company’s closing stock price as of December 31, 2015 and 2014 , and the exercise price multiplied by the number of options). Information as of December 31, 2015 , concerning currently outstanding and vested options is as follows: Outstanding Exercisable Exercise Price Number of Shares Weighted- Average Remaining Contractual Life (in years) Number of Shares Weighted- Average Remaining Contractual Life (in years) $6.53 100,000 9.84 — 0.00 $6.63 21,600 9.95 — 0.00 $6.64 66,563 9.76 6,563 9.76 $6.77 2,166 0.05 2,166 0.05 $6.81 17,400 9.95 — 0.00 $6.89 23,400 9.74 — 0.00 $7.70 5,944 4.88 5,944 4.88 $8.03 5,700 4.80 5,700 4.80 $8.63 26,114 4.79 26,114 4.79 $8.64 8,800 9.56 — 0.00 $8.65 169,000 9.13 8,800 3.73 $8.73 9,000 3.12 4,000 2.66 $8.76 429,198 8.05 93,454 3.84 $8.86 4,941 9.50 4,941 9.50 $9.64 455,069 4.43 450,864 4.39 $9.96 9,326 7.02 9,326 7.02 $10.00 8,316 9.16 486 9.16 $10.81 17,190 8.93 17,190 8.93 Total 1,379,727 Total 635,548 The total fair value of shares vested during the years ended December 31, 2015 and 2014 was $595 and $458 , respectively, which exclude the effects of the 2015 option amendments (described in further detail below) that resulted accelerated vesting and related incremental fair value. Unvested shares as of December 31, 2015 and 2014 are as follows: As of December 31, 2015 As of December 31, 2014 Exercise Price Number of Unvested Shares Exercise Price Number of Unvested Shares $6.53 100,000 $6.53 — $6.63 21,600 $6.63 — $6.64 60,000 $6.64 — $6.77 — $6.77 8,000 $6.81 17,400 $6.81 — $6.89 23,400 $6.89 — $8.64 8,800 $8.64 — $8.65 160,200 $8.65 — $8.73 5,000 $8.73 31,620 $8.76 335,744 $8.76 — $9.64 4,205 $9.64 367,127 $10.00 7,830 $10.00 — $10.81 — $10.81 15,660 Total 744,179 Total 422,407 As of December 31, 2015 and 2014 , there was approximately $2,867 and $2,683 , respectively, of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the plan. That cost is expected to be recognized over weighted-average periods of 3.1 and 3.2 years for the years ended December 31, 2015 and 2014 , respectively. The aggregate intrinsic value of options exercised during the year ended December 31, 2014 was $11 . 2015 Option Amendments During the year ended December 31, 2015 , the following events resulted in the amendment to terms of outstanding stock option awards: • On June 4, 2015, the Company's board of directors approved an extension to the existing 90-day post-employment option exercise period to a period ranging from 36 to 48 months for three directors who resigned from the board effective June 4, 2015. The directors held outstanding options to purchase 48,283 shares of the Company's common stock at a weighted average exercise price of $9.01 per share. All outstanding options were fully vested prior to June 4, 2015. • In connection with the Company's sale of its Services Business (see Note 18), the Company designed a compensatory plan to promote the retention of services of non-executive employees supporting that business (the "Services Business Plan"). The complete terms of the Service Business Plan are described in Note 15. The Company terminated certain employees in June 2015 (the "June 2015 Terminated Employees") who became eligible for severance benefits pursuant to the terms of the Services Business Plan. The outstanding stock options held by the June 2015 Terminated Employees were modified to provide: (i) accelerated vesting of all unvested stock options as of the termination date and (ii) an extension to the existing 90-day post-employment option exercise period, which varies for each employee based upon years of service, with a maximum exercise period of 48 months. As of June 30, 2015, the June 2015 Terminated Employees held outstanding options to purchase 17,715 shares of the Company's common stock at a weighted average exercise price of $9.64 per share, including aggregate unvested options to purchase 8,331 shares at a weighted average exercise price of $9.64 per share. • As described in Note 15, Charles F. Osborne, Jr., the Company’s former chief financial officer, resigned from the Company effective June 30, 2015. The Company's compensation committee of the board of directors approved the following modifications to Mr. Osborne's outstanding options to purchase the Company's common stock: (i) accelerated vesting of all unvested stock options as of June 30, 2015, and (ii) an extension to the existing 90-day post-employment option exercise period to 36 months. As of June 30, 2015, Mr. Osborne held outstanding options to purchase an aggregate of 74,490 shares of the Company's common stock at a weighted average exercise price of $9.53 per share, including unvested options to purchase 50,814 shares at a weighted average exercise price of $9.49 per share. • As described in Note 15, the Company designed a compensatory plan for its non-executive employees in connection with the relocation of its operations to Jersey City, New Jersey (the "Retention Plan"). Pursuant to the terms of the Retention Plan, all stock options held by non-executive employees eligible under the Retention Plan were modified to provide: (i) accelerated vesting of all unvested stock options as of December 31, 2015, and (ii) an extension to the existing 90-day post-employment option exercise period, which varies for each employee based upon years of service, with a maximum exercise period of 48 months. As of December 31, 2015, the retained employees eligible for participation in the Retention Plan held outstanding options to purchase 96,014 shares of the Company's common stock at a weighted average exercise price of $9.31 per share, including aggregate unvested options to purchase 64,279 shares at a weighted average exercise price of $9.20 per share. • In July 2015, pursuant to the Service Business Plan described in Note 15, the stock options held by each non-executive employee of the Services Business were modified immediately prior to the closing of the sale transaction in July 2015 to provide: (i) accelerated vesting of all unvested stock options as of the closing of the sale transaction and (ii) an extension to the existing 90-day post-employment option exercise period, which varies for each employee based upon years of service, with a maximum exercise period of 48 months. As of July 16, 2015, the non-executive employees of the Services Business held outstanding options to purchase 37,517 shares of the Company's common stock at a weighted average exercise price of $9.62 per share, including aggregate unvested options to purchase 23,052 shares at a weighted average exercise price of $9.61 per share. • On July 21, 2015, Yves J. Ribeill, Ph.D., President and a member of the Company’s board of directors, resigned as President. The Company and Dr. Ribeill entered into a Separation Agreement which included the following modifications to Dr. Ribeill's outstanding options to purchase the Company's common stock: (i) accelerated vesting of all unvested stock options as of July 21, 2015, and (ii) an extension to the existing 90-day post-employment option exercise period to 48 months. As of July 23, 2015, Dr. Ribeill held 84,613 vested options and 183,268 unvested options to purchase shares of the Company’s common stock at a weighted average exercise price of $9.61 and $9.41 per share, respectively. • On September 24, 2015, Edward E. Penhoet, Ph.D. resigned from the Company's board of directors. The Company's board of directors approved the following modifications to Dr. Penhoet's outstanding options to purchase the Company's common stock: (i) accelerated vesting of all unvested stock options as of September 24, 2015, and (ii) an extension to the existing 90-day post-employment option exercise period to 36 months. As of September 24, 2015, Dr. Penhoet held outstanding options to purchase 12,280 shares of the Company's common stock at a weighted average exercise price of $8.64 per share, including aggregate unvested options to purchase 8,800 shares at a weighted average exercise price of $8.65 per share. The Company determined the additional compensation cost associated with the previously described modifications pursuant to applicable guidance in FASB ASC Topic 718, Compensation—Stock Compensation . The additional compensation cost was determined by calculating the difference between (a) the estimated fair value of each option award immediately prior to the modifications and (b) the estimated fair value of each option award immediately after the modifications. The fair value of each option award immediately prior to and immediately after modification was estimated using the Black-Scholes option-pricing model to determine an incremental fair value, consistent with and in accordance with the Company’s existing accounting policy for stock compensation (see Note 2). Using the Black-Scholes option-pricing model, the weighted-average incremental fair value of outstanding modified option awards was $3.77 per option share. The total additional compensation cost associated with the previously described modifications was determined to be $1,869 , which was expensed in the year ended December 31, 2015. The remaining additional compensation cost is associated with future service periods and will be recognized as those services are performed. 2014 Option Amendments During the year ended December 31, 2014, the Company's board of directors approved the following with respect to the 2009 Stock Option Plan: • On April 29, 2014, the exercise price per share of certain options to purchase 53,404 shares of common stock under the 2009 Stock Option Plan was lowered to an amount equal to $10.00 per share. The original exercise prices of such options ranged from $20.40 to $61.20 per share, with a weighted average exercise price of $54.87 per share. • On June 18, 2014, the exercise price per share of all outstanding options to purchase shares of common stock under the 2009 Stock Option Plan was lowered to an amount equal to $9.64 per share, the closing stock price on June 18, 2014. This modification lowered the exercise price of outstanding options to purchase 110,346 shares of common stock, including those options to purchase common stock that were previously modified on April 29, 2014. These outstanding stock options had exercise prices that ranged from $20.40 to $61.20 per share, with a weighted average exercise price of $41.87 per share. • Also on June 18, 2014, the contractual term of all outstanding options to purchase shares of common stock under the 2009 Stock Option Plan was extended to June 17, 2024. The Company determined the additional compensation cost associated with the previously described modifications pursuant to applicable guidance in FASB ASC Topic 718, Compensation—Stock Compensation . The additional compensation cost was determined by calculating the difference between (a) the estimated fair value of each option award immediately prior to the modifications and (b) the estimated fair value of each option award immediately after the modifications. The fair value of each option award immediately prior to and immediately after modification was estimated using the Black-Scholes option-pricing model, consistent with and in accordance with the Company’s existing accounting policy for stock compensation. Using the Black-Scholes option-pricing model, the weighted-average fair value of outstanding 2009 Stock Option Plan option awards was $3.08 per option immediately prior to modification on June 18, 2014 and was $5.87 per option immediately after modification. The additional compensation cost was determined to be $293 , of which $130 was associated with services previously performed and, therefore, was expensed in the quarter ended June 30, 2014. The remaining additional compensation cost is being recognized as remaining services are performed. Also on June 18, 2014, the board of directors approved modifications to the exercise price and contractual term of all outstanding option awards under the Company’s Stock Option Plan previously adopted by the Company in 1999 (the “1999 Stock Option Plan”). The modifications to the exercise price and contractual term are consistent with those previously described for outstanding options under the 2009 Stock Option Plan. In addition, the 1999 Stock Option Plan option awards were modified to provide that the holder may exercise vested shares under the option for the contractual term of the option even in the event the holder terminates services with the Company other than for cause. The modifications lowered the exercise price of outstanding options to purchase 73,087 shares of common stock, which had exercise prices that ranged from $20.40 to $25.50 per share, with a weighted average exercise price of $21.50 per share. Pursuant to the terms of the 1999 Stock Option Plan, any amendments that modify the terms of the options awards require approval or consent of the Company’s shareholders. No additional compensation cost associated with the options under the 1999 Stock Option Plan was recognized during the quarter ended June 30, 2014 because the amendments were subject to and contingent upon stockholder approval. The Company did not believe stockholder approval was perfunctory. The Company’s stockholders approved the 1999 Stock Option Plan modifications on September 11, 2014, which was considered to be the measurement date for the determination of additional stock compensation expense. Consistent with the accounting guidance and methodology previously described for the 2009 Plan amendment, the Company determined the additional compensation cost associated with the 1999 Stock Option Plan modifications pursuant to FASB ASC Topic 718. The weighted-average fair value of outstanding 1999 Stock Option Plan option awards was $0.78 per option immediately prior to modification on September 11, 2014 and was $3.78 per option immediately after modification. The additional compensation cost was determined to be $225 , all of which was associated with services previously performed and, therefore, was fully expensed in the quarter ended September 30, 2014. 2014 Employee Stock Purchase Plan In February 2014, the Company’s board of directors adopted the 2014 Employee Stock Purchase Plan (“ESPP”), which was subsequently ratified by the Company’s stockholders and became effective on May 2, 2014 . The purpose of the ESPP is to provide means by which eligible employees of the Company and of certain designated related corporations may be given an opportunity to purchase shares of the Company’s common stock, and to seek and retain services of new and existing employees and to provide incentives for such persons to exert maximum efforts for the success of the Company. Common stock that may be issued under the ESPP will not exceed 47,794 shares, plus the number of shares of common stock that are automatically added on January 1 st of each year for a period of ten years, commencing on January 1, 2015 and ending on January 1, 2024, in an amount equal to the lesser of (i) 0.8% of the total number of shares of outstanding common stock on December 31 of the preceding calendar year, and (ii) 29,411 shares of common stock. Similar to the 2014 Plan, the board of directors may act prior to January 1 st of a given year to provide that there will be no increase in the share reserve or that the increase will be a lesser number of shares than would otherwise occur. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code. During the year ended December 31, 2014, the Company issued 10,048 shares of common stock under the ESPP. During the year ended December 31, 2015, the number of shares of common stock available for issuance under the ESPP was automatically increased by 29,411 shares and the Company issued a total of 16,874 shares of common stock under the ESPP. As of December 31, 2015 , there were 50,283 shares of common stock available for future issuance under the ESPP. Compensation Cost The compensation cost that has been charged against income for stock awards under the 2009 Stock Option Plan, the 2014 Plan, and the ESPP was $3,023 and $1,201 for the years ended December 31, 2015 and 2014 , respectively. The total income tax benefit recognized in the statements of operations for share-based compensation arrangements was $0 for both the years ended December 31, 2015 and 2014 . Cash received from options exercised was $0 and $9 for the years ended December 31, 2015 and 2014 , respectively. Stock-based compensation expense related to stock options is included in the following line items in the accompanying statements of operations: Years Ended December 31, 2015 2014 Research and development $ 300 $ 394 Selling, general and administrative 2,515 648 Discontinued operations 208 159 Total stock-based compensation expense $ 3,023 $ 1,201 |