STOCK BASED COMPENSATION

6 Months Ended

Jun. 30, 2016

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

STOCK BASED COMPENSATION

NOTE 14: 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 1,000,000 shares were initially reserved for issuance in connection with awards granted under the 2010 Plan and on May 18, 2016, an additional 2,000,000 shares were reserved for issuance 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		450,275
2013		516,774
2014		742,973
2015		983,362
2016		3,306,290
Total additional shares		5,999,674

The Company granted 2,778,671 additional options to purchase shares of common stock to employees and directors during the three and six months ended June 30, 2016. No options were exercised during the three and six months ended June 30, 2016.  There are 2,113,315 shares available for grant under the 2010 Plan as of June 30, 2016.

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 $200,187 and $205,112 for the three months ended June 30, 2016 and 2015, respectively and $392,644 and $353,981 for the six months ended June 30, 2016 and 2015, respectively.

Options issued and outstanding as of June 30, 2016 and their activities during the six months 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		3,613,944		$	2.40			$	-
Granted		2,778,671			0.26				-
Forfeited		(481,256	)		1.66				-
Outstanding as of  June 30, 2016		5,911,359			1.45		8.78	$	47,237
Exercisable as of  June 30, 2016		1,885,703			3.07		7.37	$	-
Vested and expected to vest (1)		3,007,207		$	2.55		7.77	$	-

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

At June 30, 2016, there were 4,025,656 unvested options outstanding and the related unrecognized total compensation cost associated with these options was approximately $4.0 million. This expense is expected to be recognized over a weighted-average period of 2.32 years.