RESTRICTED STOCK

6 Months Ended

Jun. 30, 2016

Restricted Stock

RESTRICTED STOCK

For restricted stock issued and outstanding during the six months ended June 30, 2016 and 2015, the Company incurred non-cash compensation expense of $42,423 and $26,000, respectively, each net of estimated forfeitures.

During the six months ended June 30, 2016, the Company granted 280,000 restricted shares of Common Stock to its officers and Vice President of Operations and Product Development of the Company, in connection with their respective salary deferrals.

A summary of non-vested restricted stock activity for the six months ended June 30, 2016 is as follows:

Restricted Stock	Shares			Weighted- Average Grant-Date Fair Value
Non-vested shares at January 1, 2016		27,842		$	13.06
Granted		280,000		$	1.13
Vested		(1,403	)	$	8.54
Forfeited		(3,806	)	$	7.73
Non-vested shares at June 30, 2016		302,633		$	2.11

Among the 302,633 shares of non-vested restricted stock, the various vesting criteria include the following:

· 14,185 shares of restricted stock vest upon the FDA approval of the Company’s CGM system or the sale of the Company; and

· 8,448 shares of restricted stock vest over 4 years, at each of the anniversary dates of the grants, and

· 280,000 shares of restricted stock vest 18 months from the date of issuance.

As of June 30, 2016, there was $585,415 of total unrecognized compensation expense related to non-vested share-based restricted stock arrangements granted pursuant to the Company’s equity compensation plans that vest over time in the foreseeable future. As of June 30, 2016, the Company cannot estimate the timing of completion of performance vesting requirements required by certain of these restricted stock grant arrangements. Compensation expense related to these restricted share grants will be recognized when the Company concludes that achievement of the performance vesting conditions is probable.