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, 2015 and 2014:



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, 2014	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
Granted	20		$	5.71	—	$	3.01
Outstanding at December 31, 2015	2,172		$	5.02	1.7 years	$	2.24
Exercisable at December 31, 2015	1,302		4.95		1.9 years	$	2.25
Available for grant at December 31, 2015	1,603

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



Non-Vested Options	Number of shares (in thousands)		Weighted Average Grant Date Option Fair Value
Outstanding at January 1, 2014	—		$	—
Granted	2,062		2.26
Vested	(1,072	)	2.21
Forfeited	—		—
Outstanding at December 31, 2014	990		$	2.31
Granted	20		3.01
Vested	(140	)	2.95
Forfeited	—		—
Outstanding at December 31, 2015	870		$	2.22

Option Grants:

As of December 1, 2013, subject to shareholder approval (which was received during 2014) and vesting provisions, the Company granted options to purchase a total of 1.5 million shares of its 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; these conditions have not been met as of December 31, 2015. 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; these conditions have not been met as of December 31, 2015. See Note 2 - Management Services Agreement with Algar, Inc. for additional information relating to the Management Agreement and the related Stock Option Agreement.

On January 16, 2014, the Company awarded options to purchase 30.0 thousand shares of its stock to a new independent director at a per share exercise price of $3.47, the fair value as of grant date. These options were fully vested when awarded and are outstanding as of December 31, 2015. The options expire January 15, 2019.

As of May 16, 2014, the Company awarded options to purchase 292.0 thousand shares of its stock to its directors at a per share exercise price of $4.68, the fair value as of grant date. These options were fully vested when awarded and are outstanding as of December 31, 2015. The options expire May 15, 2019.

As of October 15, 2014, the Company awarded options to purchase 30.0 thousand shares of its stock to each to the 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 vested October 14, 2015 and are outstanding as of December 31, 2015. These options expire in October 2019.

As of December 31, 2014, the Company awarded options to purchase 150.0 thousand shares of its stock to its CFO. 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 options expire December 30, 2019. The per share exercise price is $5.97, the fair value as of the grant date.

In January 2015, the Company awarded options to purchase 20.0 thousand shares of its stock to its CFO. 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 options expire January 1, 2019. The per share exercise price is $5.71, the fair value as of the grant date.

The weighted average assumptions relating to the valuation of the Company's stock options awarded in 2015 are shown below.



	2015			2014
Weighted average grant-date fair value of grants per option	$	3.01		$	2.26
Volatility	60.1		%	60.9		%
Risk-free interest rate	2.3		%	2.2		%
Expected life (in years)	5			3
Expected dividend yield	—		%	—		%

Other Equity Transactions:

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

On August 5, 2015, the Company entered into a Stock Purchase Agreement with Algar, whereby the Company issued 50.7 thousand shares of its common stock to Algar for aggregate consideration equal to $189.0 thousand based on the fair value of our common stock. The consideration was payable in the form of a reduction of the Company's $378.0 thousand accrued but unpaid bonus compensation due to Algar pursuant to the Management Services Agreement between the Company and Algar, dated December 1, 2013, leaving a remaining balance of $189.0 thousand in the accrued but unpaid bonus compensation. See Note 10 - Related Party Transactions.

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 at a fair value of $16.6 thousand. These stock grants were issued in lieu of cash bonuses that were earned by the employees during 2014.

See Note 14 - Financing and Related Matters for details on an additional equity transaction.

RSUs:

See Note 1 - Summary of Significant Accounting Policies - Subsequent Events for additional information related to issuance of RSUs subsequent to December 31, 2015.

Other:

As of December 31, 2015, we had unrecognized stock-based compensation cost related to non-vested option awards in the amount of $356.5 thousand. The amount of unrecognized stock-based compensation cost related to the Algar options is $1.5 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 $0.2 million and $2.5 million for the years ended December 31, 2015 and 2014, respectively.