STOCK BASED COMPENSATION

12 Months Ended

Dec. 31, 2016

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

STOCK BASED COMPENSATION

NOTE 15: STOCK BASED COMPENSATION

Stock Options and Incentive Plan

On September 28, 2010, the Board of Directors approved the adoption of the 2010 Stock Option and Incentive Plan, or the 2010 Plan, to provide for the grant of equity-based awards to employees, officers, non-employee directors and other key persons providing services to the Company. Awards of incentive options may be granted under the 2010 Plan until September 2020. No other awards may be granted under the 2010 Plan after the date that is 10 years from the date of stockholder approval. An aggregate of 66,667 shares were initially reserved for issuance in connection with awards granted under the 2010 Plan. ,

The following table presents the automatic additions to the 2010 Plan since inception pursuant to the “evergreen” terms of the 2010 Plan:

January 1,	Number of shares
2012		30,018
2013		34,452
2014		49,532
2015		65,557
2016		220,419
Total additional shares		399,978

The Company granted options to purchase 185,245 shares of common stock to employees and directors and issued zero shares of common stock in connection with the exercise of directors stock options during the year ended December 31, 2016. There are 156,388 options available for grant under the 2010 Plan as of December 31, 2016, and as a result of the evergreen provision contained in the 2010 Plan, an additional 151,477 shares were added to the 2010 Plan on January 1, 2017.

Compensation costs associated with the Company’s stock options are recognized, based on the grant-date fair values of these options, over the requisite service period, or vesting period. Accordingly, the Company recognized stock based compensation expense of $876,189 and $840,103 for the years ended December 31, 2016 and 2015, respectively, which was included in the following captions in the consolidated statements of operations.

	Year Ended December 31,
	2016		2015
General and administrative	$	850,378	$	747,255
Research and development		25,811		67,475
Selling		-		25,373
Total stock compensation expense	$	876,189	$	840,103

The fair value of stock options granted for the years ended December 31, 2016 and 2015 was calculated using the Black-Scholes option-pricing model applying the following assumptions:

	Year ended December 31,
	2016		2015
Risk free interest rate		1.48% - 1.55%		1.64% - 1.82%
Expected term		5.58- 6.06 years		5.31 - 6.61 years
Dividend yield		- %		- %
Expected volatility		115.52% - 115.58%		105.00% - 115.01%

Options issued and outstanding as of December 31, 2016 and their activities during the year then ended are as follows:

	Number of Underlying Shares			Weighted- Average Exercise Price Per Share		Weighted- Average Contractual Life Remaining in Years		Aggregate Intrinsic Value
Outstanding as of January 1, 2016		240,930		$	38.89			$	-
Granted		185,245			3.90				-
Forfeited		(47,251	)		23.85				-
Expired		-			69.15				-
Outstanding as of December 31, 2016		378,924			26.25		7.08	$	-
Exercisable as of December 31, 2016		272,998			37.80		5.74	$	-
Vested and expected to vest (1)		327,101		$	28.65		6.82	$	-

⁽¹⁾ vested shares and unvested shares after a forfeiture rate is applied

At December 31, 2016, there were 105,926 unvested options outstanding and the related unrecognized total compensation cost associated with these options was $976,056. This expense is expected to be recognized over a weighted-average period of 1.91 years.