14. Stock-Based Compensation

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

14. Stock-Based Compensation

We have various incentive stock-based compensation plans that provide for the grant of stock options, restricted stock, and other share-based awards of up to 5,898,729 shares to eligible employees, consultants, and directors. As of December 31, 2015, we had 1,268,031 shares remaining in the plans available to grant.

The following table summarizes the statement of operations effect of stock-based compensation for the years ended December 31, 2015 and 2014 (in thousands):

	Year Ended December 31,
	2015		2014
Share based compensation expense by financial statement line item:
Cost of revenue	$	80	$	25
Research and development		166		129
Selling and marketing		115		64
General and administrative		945		566
Total cost related to share-based compensation expense	$	1,306	$	784

Total cost allocated to share-based compensation expense related to warrants issued during the year ended December 31, 2015 and 2014 was $0 and $265,000, respectively (Note 13).

There is no tax benefit related to stock compensation expense due to a full valuation allowance on net deferred tax assets at December 31, 2015 and 2014, respectively.

Stock Options

The weighted-average fair value of stock options on the date of grant and the assumptions used to estimate the fair value of stock options granted during the years ended December 31, 2015 and 2014 using the Black-Scholes option-pricing model were as follows:

	Year Ended December 31, 2015			Year Ended December 31, 2014
Weighted-average fair value of options and warrants granted	$	0.69		$	1.01
Expected volatility		58	%		55	%
Expected life (in years)		4.30			4.60
Risk-free interest rate		1.68	%		1.65	%
Expected dividend yield		0.00	%		0.00	%

The expected volatility of the options is determined using historical volatilities based on historical stock prices. The expected life of the options granted is based on our historical share option exercise experience. The risk-free interest rate is determined using the yield available for zero-coupon U.S. government issues with a remaining term equal to the expected life of the option. The Company has not declared any dividends, therefore, it is assumed to be zero.

The following table summarizes the stock option activity for all plans for the years ended December 31, 2015 and 2014:

				Weighted-Average	Aggregate
		Weighted-Average		Remaining	Intrinsic Value
	Number of Shares	Exercise Price		Contract Life	(in thousands)
Outstanding at January 1, 2014	2,130,239	$	3.96	8.0 years	$            482
Granted	498,000		3.18
Exercised	(28,418)		2.44
Cancelled/forfeited	(452,260)		4.05
Outstanding at December 31, 2014	2,147,561		3.78	6.9 years	-
Granted	2,578,000		1.50
Exercised	(26,865)		1.85
Cancelled/forfeited	(317,998)		2.16
Outstanding at December 31, 2015	4,380,698		2.56	6.2 years	-
Shares vested and expected to vest	4,052,341		2.56	6.2 years	-
Exercisable as of December 31, 2015	2,716,262		3.04	6.1 years	-
Exercisable as of December 31, 2014	1,351,894		4.18	6.6 years	-

The total intrinsic value of options exercised during the years ended December 31, 2015 and 2014, was $8,000 and $21,000 respectively.

As of December 31, 2015, the total future compensation expense related to non-vested options not yet recognized in the consolidated statements of operations was approximately $1,325,000 and the weighted-average period over which these awards are expected to be recognized is approximately 2.0 years.