STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2016

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

STOCK-BASED COMPENSATION

Stock Options

In addition to options granted under shareholder approved stock option plans, the Company has granted options outside of these plans for a total of 24,475,556 shares as of March 31, 2016. Since these options were not issued pursuant to a shareholder approved stock option plan, they are non-qualified stock options for income tax purposes. Total stock-based compensation related to stock options for the three months ended March 31, 2016 and 2015 was approximately $440 and $9,878, respectively. The following table summarizes share activity and the weighted average exercise prices related to stock options outstanding for the three months ended March 31, 2016:

	2016					2015
	Shares			Price (1)		Shares			Price (1)
Outstanding, beginning of period		26,547,399		$	1.09		540,000		$	26.10
Granted		200,000			0.31		19,180,569			0.75
Forfeited		(400,000	)		0.37		(1,340,000	)		0.80
Outstanding, end of period		26,347,399		$	1.10		18,380,569		$	1.49
Exercisable, end of period		21,241,536		$	1.26		15,868,437		$	1.61

⁽¹⁾ Represents the weighted average price.

The weighted average fair value for stock options granted for the three months ended March 31, 2016 and 2015 was $0.19 and $0.67 per share, respectively. In estimating the fair value of options, the Company used the Black-Scholes option-pricing model based upon the closing price of the Company’s stock on the date of grant and the following weighted average assumptions for the three months ended March 31, 2016 and 2015:

	2016			2015
Expected lives (in years)		5.8			10.0
Risk-free interest rate		1.5	%		1.5	%
Expected volatility		92	%		140	%
Expected forfeiture rate		8.0	%		8.0	%
Expected dividend yield		0.0	%		0.0	%

We estimate expected volatility based on historical daily price changes of our common stock for a period equal to the current expected term of the options. The risk-free interest rate is based on the United States treasury yields in effect at the time of grant corresponding with the expected term of the options. The expected option term is the number of years we estimate that options will be outstanding prior to exercise considering vesting schedules and our historical exercise patterns.

Stock-based compensation expense is recognized over the vesting period of stock options and restricted stock awards. For a single award with a graded vesting schedule and only service conditions, the Company recognizes compensation cost on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in substance multiple awards. For stock options granted through March 31, 2016, unrecognized stock compensation expense amounted to $503 which will be charged to expense over the remaining vesting periods of the options, which is a weighted average period of 1.4 years as of March 31, 2016. As of March 31, 2016, the aggregate intrinsic value of all outstanding stock options amounted to $2 based on the closing stock price of $0.28 per share on March 31, 2016.

The following table summarizes information about stock options outstanding as of March 31, 2016:

Stock Options Outstanding										Vested Options
Exercise Prices						Remaining		Number		Weighted		Number
Range				Weighted		Contractual		of		Average		of
Low		High		Average		Term		Shares		Price		Shares
$	0.26	$	0.40	$	0.38		9.0		11,472,198	$	0.38		7,285,531
	0.71		0.79		0.75		9.0		14,375,200		0.74		13,456,004
	3.75		3.75		3.75		2.3		346,667		3.75		346,667
	77.25		135.75		82.34		3.2		153,334		82.34		153,334
$	0.26	$	135.75	$	1.10		8.9		26,347,399	$	1.26		21,241,536

Restricted Stock

The fair value of the restricted stock grants is based upon the closing price of the Company’s stock on the date of grant. The following table summarizes share activity, the weighted average fair value per share, and the change in unrecognized compensation related to restricted stock grants outstanding as of March 31, 2016:

	2016								2015
	Number			Fair Value		Unrecognized			Number		Fair Value		Unrecognized
	of Shares			Per Share (1)		Compensation			of Shares		Per Share (1)		Compensation
Unvested shares, beginning of period		2,596,999		$	0.64	$	1,177			66,667	$	87.75	$	1,445
Shares granted		-			-		-			2,194,998		0.75		1,646
Compensation recognized		-			-		(155	)		-		-		(379	)
Shares vested		(182,832	)		0.75		-			-		-		-
Unvested shares, end of period		2,414,167		$	0.63	$	1,022			2,261,665	$	0.64	$	2,712

⁽¹⁾ Represents the weighted average price.

Unrecognized compensation expense related to restricted stock will be recognized over vesting period set forth in the restricted stock agreements which extends through June 2019.  The aggregate intrinsic value of unvested restricted stock was $676 based on the closing price of $0.28 for the Company’s common stock on March 31, 2016.