STOCK-BASED COMPENSATION

Upon shareholder approval of the 2014 Plan, the 2013 Global Share Option Plan and Israeli Sub-Plan were terminated, other than respect to the 1,489,532 shares of common stock underlying options outstanding under such plan.

The Company shareholders approved the 2014 Plan at the annual meeting of stockholders held July 10, 2014, pursuant to which 2,196,836 shares of common stock are authorized for issuance.

Upon shareholder approval of the 2014 Plan, during 2014, the Company issued a total of 374,504 RSU's and options to purchase an aggregate of 25,000 share of our common stock that had been previously approved by the Board and the Compensation Committee, subject to stockholder approval of the 2014 Plan, to certain employees and non-executive directors.

During 2015 the Company granted an aggregate of 182,500 options to purchase shares of our common stock to certain employees in connection with their employment with the Company. In addition, the Company granted an aggregate of 240,000 shares of RSU's, of which 200,000 were granted to CEO Philip Hartstein and the remainder to certain employees in connection with their employment with the Company.

As of December 31, 2015, the remaining number of shares available for issuance under the 2014 Plan is 1,536,670.

Total stock-based compensation for stock options and restricted stock awards, of $0.8 million and $1.4 million was recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2015 and 2014, respectively. The stock-based compensation expense is for options and restricted stock awards granted to certain employees, consultants, and members of the Board of Directors.

STOCK OPTIONS

The following is a summary of stock option activity during the years ended December 31, 2015 and 2014:



	Number of Options Outstanding	Weighted Average Exercise Price		Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (thousands)

Outstanding – December 31, 2013	1,625,476	$	1.76
Options granted	25,000	5.68
Options exercised	79,645	1.66
Options forfeited	140,272	—
Options expired	—	—

Outstanding – December 31, 2014	1,430,559	$	1.84
Options granted	182,500	1.47
Options exercised	32,227	2.09
Options forfeited	70,000	2.61
Options expired	—	—

Outstanding – December 31, 2015	1,510,832	$	1.63	7.13	$	—

Exercisable – December 31, 2015	1,198,204	$	1.63	6.73	$	—
Exercisable – December 31, 2014	945,012	$	1.66	9.38	$	974

The Company estimates the fair values of stock options using the Black-Scholes option-pricing model on the date of grant. For the years ended December 31, 2015 and 2014, the assumptions used in the Black-Scholes option pricing model, which was used to estimate the grant date fair value per option, were as follows,



	2015						2014
	Employee Grants			Non-Employee Grants			Employee Grants			Non-Employee Grants
Weighted-average Black-Scholes option pricing model assumptions:
Volatility	90.99		%	61.10		%	50.70		%	57.78		%
Expected term (in years)	6			6			5			10
Risk-free rate	1.49		%	0.71		%	1.00		%	2.90		%
Expected dividend yield	0.0		%	0.0		%	0.0		%	0.0		%
Weighted average grant date fair value per share	$	1.47		$	1.44		$	0.82		$	0.84

The risk-free interest rate is the United States Treasury rate for the day of the grant having a term equal to the life of the equity instrument. The volatility is a measure of the amount by which the Company’s share price has fluctuated or is expected to fluctuate. Since the Company’s common stock was not publicly traded, or was not publicly traded for an extended duration at the time of the grant, an average of the historic volatilities of comparative companies was used. The dividend yield is zero percent as the Company has not made any dividend payment and has no plans to pay dividends in the foreseeable future. Due to the lack of historical information, the Company determines the expected term of its stock option awards by using the simplified method, which assumes each vesting tranche of the award has a term equal to average of the contractual term and the vesting period.

As of December 31, 2015, total compensation cost not yet recognized related to unvested stock options was approximately $0.3 million, which is expected to be recognized over a weighted-average period of 8.7 years.

RESTRICTED STOCK UNITS

The following is a summary of non-vested RSUs award activity for the year ended December 31, 2015 and 2014:



	2015			2014
	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Non-vested	374,504	$	5.08	—	$	—
Shares granted	240,000	2.29		374,504	5.08
Shares vested	160,286	1.58		—	—
Shares forfeited	45,508	4.10		—	—

Non-vested	408,710	$	2.66	374,504	$	5.08

The Company estimates the fair value of the granted shares using the market price of the Company’s stock price at the grant date. For the years ended December 31, 2015 and 2014, the Company recognized $509,000 and 229,000, respectively of stock-based compensation expense related to the RSUs.