13. Stock-Based Compensation

Stock Options

On April 25, 2013, the Company’s stockholders approved the Company’s adoption of the new 2013 Stock Incentive Plan (“2013 Plan”) having 3,500,000 shares available for issuance in respect of awards made thereunder. The Company terminated the 2005 Stock Incentive Plan in December 2014. As of December 31, 2014, the aggregate number of shares of common stock remaining available for issuance for awards under the 2013 Plan totaled 2,301,691.

Stock awards under the Company’s stock option plans have been granted with exercise prices which are no less than the market value of the stock on the date of the grant. Options granted under the 2013 and 2005 Plans are generally time-based or performance-based options and vesting varies accordingly. Options under the plans expire up to a maximum of ten years from the date of grant. Compensation expense recognized in the Statement of Operations during 2014 and 2013 for stock options and restricted stock awards amounted to $413 and $1,301, respectively. Cash received from options exercised under all share-based payment arrangements for the year ended December 31, 2013 was $18, there were no exercises in 2014.

The fair value of each option award granted is estimated on the date of grant using the Black-Scholes option valuation and assumptions as noted in the following table:

	December 31, 2014			December 31, 2013

Expected life		5-10 years			5-10 years
Expected volatility		74-83	%		72-77	%
Risk-free interest rate		1.90-2.45	%		0.71-2.45	%
Dividend yield		-			-

The expected life of the options is based on the observed and expected time to full-vesting, forfeiture and exercise. Groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected volatility assumptions were determined based upon the historical volatility of the Company’s daily closing stock price. The risk-free rate is based on rates provided by the U.S. Treasury with a term equal to the expected life of the option. The Company has never paid dividends and does not currently anticipate paying any in the foreseeable future.

At December 31, 2014, stock options to purchase 1,308,835 shares of common stock at exercise prices ranging from $1.31 to $68.90 per share are outstanding and are exercisable at various dates through 2024. The total number of options exercisable at December 31, 2014 and 2013 was 101,376 and 126,183 respectively, with weighted average exercise prices of $13.45 and $25.60, respectively.

The status of the Company’s stock option plans during the periods indicated is summarized as follows:

					Weighted
					Average
			Weighted		Remaining
			Average		Contractual		Aggregate
	Number of		Exercise		Term in		Intrinsic
	Shares		Price		Years		Value
Outstanding at December 31, 2012		242,654	$	40.10		7.0	$	29
Granted		499,447		14.60		9.5		-
Exercised		(1,806)		10.00				17
Forfeited or expired		(433,679)		27.70				27
Outstanding at December 31, 2013		306,616		16.20		9.0
Granted		1,205,162		1.70		9.4
Exercised		-		-
Forfeited or expired		(202,943)		16.74
Outstanding at December 31, 2014		1,308,835		2.76		9.8
Vested and exercisable at December 31, 2014		101,376	$	13.45		8.4	$	-

During the years ended December 31, 2014 and 2013 the weighted average fair value of options granted, estimated as of the grant date using the Black-Scholes option valuation model, was $1.22 and $6.00 per share, respectively. The total intrinsic value of options exercised during the year ended December 31, 2013 $17, there were no exercises in 2014. The requisite service periods for options granted during 2014 and 2013 for employees was four years and for directors was one year.

The following table summarizes information about stock options outstanding at December 31, 2014:

	Options Outstanding					Options Exercisable
			Weighted-
			Average	Weighted-				Weighted-
			Remaining	Average				Average
	Number		Contractual	Exercise		Number		Exercise
Range of Exercise Prices	Outstanding		Life	Price		Exercisable		Price
$.01-$3.00		1,125,000	9.95 years	$	1.40		-	$	-
$3.01-$10.00		147,553	8.98 years		6.95		70,443		7.51
$10.01-$70.00		36,282	7.41 years		27.89		30,933		26.97
$.01-$70.00		1,308,835	9.77 years	$	2.76		101,376	$	13.45

As of December 31, 2014, of the total 1,308,835 options outstanding, 1,207,459 have not vested. Of this total unvested amount, 392,425 will vest upon the attainment of certain milestones, and the balance will vest over the requisite service period. There was $1,293 of total unrecognized compensation cost related to unvested options, of which approximately $392 will be recognized upon achievement of performance milestones and $901 upon completion of the requisite service period. On February 11, 2013, the Company’s former chief executive officer contractually agreed to not exercise 90,000 fully vested options until such time as the stockholders of the Company approved an increase in the number of authorized shares of the Company’s common stock, or, if earlier, the Company’s written consent. On April 25, 2013, the Company’s stockholders approved an increase in the authorized shares of common stock and therefore the restriction placed on the former CEO’s ability to exercise the 90,000 fully vested options lapsed. For financial reporting purposes, the Forbearance Agreement was accounted for at the time it was executed as a cancellation with no concurrent grant and therefore upon the lapsing of the exercise restriction on April 25, 2013, the Company recognized additional stock compensation of approximately $423.