Stockholders Deficit

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Stockholders' Deficit

Note 11. Stockholders’ Deficit

Treasury Stock

In January 2017, the Company’s board of directors approved the retirement of the 1,396 shares of the Company’s common stock previously held in treasury, and returned them to the status of authorized and unissued shares of the Company’s common stock.

Stock-based Compensation

As of March 31, 2017, there were 110,215 shares available for issuance under the Company’s 2014 Equity Incentive Plan (the “Plan”) and options to purchase 1,441,924 shares of common stock were outstanding, including 674,270 options that were fully vested. As of March 31, 2017, there was total unrecognized compensation expense of $1,181,357 related to unvested stock options, which the Company expects to recognize over a weighted-average period of approximately 1.84 years.

A summary of the Plan’s stock option activity is as follows:

	Number of Shares			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Balance at December 31, 2016		1,161,705		$	3.35	7.7		$	36,887
Granted		300,500		1.81
Exercised		(13,116	)	2.67				$	47,025
Forfeited		(5,566	)		3.49
Expired/Cancelled		(1,599	)		6.79
Balance at March 31, 2017		1,441,924		$	3.03		7.9	$	5,934,530
Exercisable at March 31, 2017		674,270		$	3.40	6.5		$	2,577,267

In January 2017, the Company’s board of directors approved the granting of 211,500 employee incentive stock options. Black-Scholes assumptions used to calculate the fair value of this stock option grant were as follows:

Fair value of common stock	$	1.75
Risk-free interest rate		1.92%
Expected volatility		61.64%
Expected term	5.18 years
Expected dividend yield		0%

As of March 31, 2017, there were 256,499 restricted stock units (“RSUs”) outstanding, including 55,000 vested and unissued RSUs and 201,499 unvested RSUs. Unrecognized compensation expense related to the remaining unvested RSUs was $384,164 at March 31, 2017, which the Company expects to recognize over a weighted-average remaining service period of 0.6 years.

A summary of the Plan’s RSU activity is as follows:

	Restricted Stock Units (RSU)			Weighted- Average Grant Date Fair Value Per Share
Balance at December 31, 2016		355,499		$	2.41
Granted		10,000			1.75
Exercised		(109,000	)		2.44
Balance at March 31, 2017		256,499		$	2.38

Stock-based compensation expense recorded in the condensed statements of operations for the three months ended March 31, 2017 and 2016 was as follows:

	Three Months Ended March 31,
	2017		2016
Selling, general and administrative	$	279,583	$	121,550
Research and development		88,361		37,734
Cost of revenue		28,702		10,764
	$	396,646	$	170,048