SHARE BASED COMPENSATION

Following is a summary of stock option activity and number of shares reserved for outstanding options for the years ended December 31, 2014 and 2013:



Total Options	Number of shares (in thousands)		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2013	180		$	4.59	—	$	1.38
Granted	—		—		—	—
Outstanding at December 31, 2013	180		$	4.59	—	$	1.38
Granted	2,062		5.02		—	2.26
Exercised	(30	)	4.23		—	1.05
Expired	(60	)	4.23		—	1.05
Outstanding at December 31, 2014	2,152		$	5.02	2.7 years	$	2.23
Exercisable at December 31, 2014	1,162		$	4.88	2.7 years	$	2.18
Available for grant at December 31, 2014	1,623

Following is a summary of the nonvested options issued and outstanding:



Non-Vested Options	Number of shares (in thousands)		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2013	90		$	1.71
Granted	—		—
Vested	(90	)	1.71
Forfeited	—
Outstanding at December 31, 2013	—		$	—
Granted	2,062		2.26
Vested	(1,072	)	2.21
Forfeited	—
Outstanding at December 31, 2014	990		$	2.31

As of December 31, 2014, we awarded options to purchase 150,000 shares of our stock to our CFO, Mr. Todd Phillips. These options vest over a three-year period, with 1/3 vesting on the first anniversary of the grant date and 1/6 vesting every six months thereafter until the three year anniversary of the grant date. The per share exercise price is $5.97, the fair value as of the grant date.

As of December 1, 2013, subject to shareholder approval and vesting provisions, we granted options to purchase a total of 1.5 million shares of our Common Stock to Algar, Inc. at a per share exercise price of $5.00 pursuant to a Management Services Agreement (the "Management Agreement"). At the annual meeting of shareholders of the Company on October 15, 2014, shareholders approved the issuance of these options. The first 375.0 thousand share options vested and became exercisable on December 1, 2013. The second 375.0 thousand share options vested and became exercisable after the market price of our Common Stock reached $6.00 per share during 2014. The third 375.0 thousand share options vest and become exercisable only if and after the market price of our Common Stock reaches $8.00 per share or Company revenue following an acquisition increases by $90.0 million. The fourth 375.0 thousand share options vest and become exercisable only if and after the market price of our Common Stock reaches $9.00 per share or Company revenue following an acquisition increases by $120.0 million. See Note 2 - "Management Services Agreement with Algar, Inc." for additional information relating to the Management Agreement and the related Stock Option Agreement.

As of October 15, 2014, we awarded options to purchase 30.0 thousand shares of our stock each to our three new directors for a total of 90.0 thousand shares at a per share exercise price of $5.40, the fair value as of the grant date. These options will vest as of October 14, 2015 and are outstanding as of December 31, 2013. These options expire in October 2019.

As of May 16, 2014, we awarded options to purchase 292.0 thousand shares of our stock to our directors at a per share exercise price of $4.68, the fair value as of grant date. These shares were fully vested when awarded.

On January 16, 2014, we awarded options to purchase 30.0 thousand shares of our stock to our new independent director at a per share exercise price of $3.47, the fair value as of grant date.

On December 31, 2014, the Company entered into a Securities Purchase Agreement with an officer whereby the Company issued 8.2 thousand shares of Common Stock to the officer for an aggregate offering price of $40.0 thousand. This agreement was in connection with this officer accepting employment with the Company.

In December 2014, the Company issued 3.7 thousand shares of stock to six employees in the amount of $16.6 thousand. These stock grants were issued in lieu of cash bonuses that were earned by the employees during 2014.

On June 26, 2014, we received $126.9 thousand from one of our directors as he exercised 30.0 thousand share options.

As of December 31, 2014, we had unrecognized stock-based compensation cost related to non-vested option awards in the amount of 2,058.8 thousand. The amount of unrecognized stock-based compensation cost related to the Algar options is $1,383.8 thousand and will fluctuate based on changes in option value at the end of each quarter.

Stock compensation charged to operations relating to stock options was $2.5 million and $48.0 thousand for the years ended December 31, 2014 and 2013, respectively.

The weighted average assumptions relating to the valuation of the Company's stock options awarded in 2014 are shown below.



		2014
Weighted average grant-date fair value of grants per option		$2.26
Volatility		60.9%
Risk-free interest rate		2.2%
Expected life		3
Expected dividend yield		0.0%