STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2015

STOCK-BASED COMPENSATION

All stock options and restricted stock are granted under the ANI Pharmaceuticals, Inc. Fourth Amended and Restated 2008 Stock Incentive Plan (the “2008 Plan”). As of September 30, 2015, 0.5 million shares of our common stock remained available for issuance under the 2008 Plan.

Total expense related to stock options for the three months ended September 30, 2015 was $0.9 million, $23 thousand of which was recognized as cost of sales, $31 thousand as research and development expense, and $0.8 million as sales, general, and administrative (“SG&A”) expense. Total expense related to stock options for the nine months ended September 30, 2015 was $2.1 million, $60 thousand of which was recognized as cost of sales, $80 thousand as research and development expense, and $2.0 million as SG&A expense. Total expense related to stock options for the three months ended September 30, 2014 was $0.6 million, $18 thousand of which was recognized as cost of sales, $10 thousand as research and development expense, and $0.6 million as SG&A expense. Total expense related to stock options for the nine months ended September 30, 2014 was $2.5 million, $1.3 million of which was a non-recurring catch-up adjustment related to the 325 thousand stock options previously approved by the Board of Directors on July 12, 2013 and August 1, 2013, which were approved at the May 22, 2014 annual meeting. Of the $2.5 million of stock option expense recognized in the nine months ended September 30, 2014, $0.1 million was recognized as cost of sales, $0.1 million as research and development expense, and $2.3 million as SG&A expense. Total expense related to restricted stock grants for the three and nine months ended September 30, 2015 was $0.3 million and $0.6 million, respectively, all of which was recognized as SG&A expense. Total expense related to restricted stock grants for the three and nine months ended September 30, 2014 was $0.1 million and $0.2 million, respectively, all of which was recognized as SG&A expense.

A summary of stock option and restricted stock activity under the Plan during the nine months ended September 30, 2015 and 2014 is presented below:

(in thousands)	Options		RSAs
Outstanding December 31, 2013		120		50
Granted		115		30
Options previously granted, approved by shareholders		325		-
Options Exercised/RSAs Vested		(36)		-
Expired		(64)		-
Outstanding September 30, 2014		460		80

Outstanding December 31, 2014		458		63
Granted		130		28
Options Exercised/RSAs Vested		(81)		(10)
Forfeited		(33)		(5)
Outstanding September 30, 2015		474		76