Equity

3 Months Ended

Mar. 31, 2015

Stockholders' Equity [Abstract]

Stockholders' Equity

5. Equity

Stock-based compensation expense is based on the estimated grant date fair value of the portion of stock-based payment awards that are ultimately expected to vest during the period. The grant date fair value of stock-based awards to employees and directors is calculated using the Black Scholes Merton valuation model.

Forfeitures of stock-based payment awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The estimated average forfeiture rate for the three months ended March 31, 2015 and 2014 was approximately 7.57% and 9.76%, respectively, based on historical data.

Valuation and Expense Information:

The weighted-average fair value of stock-based compensation is based on the Black Scholes Merton valuation model. Forfeitures are estimated and it is assumed no dividends will be declared. The estimated fair value of stock-based compensation awards to employees is amortized over the vesting period of the options. The fair value calculations are based on the following assumptions:

	Three Months Ended March 31, 2015	Three Months Ended March 31, 2014
Risk free interest rate	0.04% - 3.73%	0.04% - 4.92%
Expected term (years)	3.26 - 7.00	3.33 - 6.21
Expected volatility	91.99% - 198.38%	91.99% - 198.38%
Expected dividends	None	None

The Company granted 35,633 stock options during the three months ended March 31, 2015 at a weighted average exercise price of $0.0225 per share. No stock options were exercised during the three month period ended March 31, 2015.

The Company granted 2,500 stock options during the three months ended March 31, 2014 at a weighted average exercise price of $0.027 per share. No stock options were exercised during the month period ended March 31, 2014.

The following table summarizes the allocation of stock-based compensation expense related to stock option grants for the three months ended March 31:

	2015	2014
Research and development	$ 65	$ 27
Sales and marketing	52	12
General and administrative	80	48
Director	16	5
Total stock-based compensation	$ 213	$ 92

A summary of option activity under the Company's plans as of March 31, 2015 and 2014 is as follows:

Options	2015				2014
	Shares	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value	Shares	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1	72,012	$ 0.04			69,537	$ 0.05
Granted	35,633	$ 0.02			2,500	$ 0.03		$ 7
Exercised	-	$ -			-	$ -
Forfeited or expired	-	$ -			-	$ -
Outstanding at March 31	107,645	$ 0.04	4.87		72,037	$ 0.05	4.85	$ 7
Vested and expected to vest at March 31	104,018	$ 0.04	4.82	$ -	65,007	$ 0.05	4.41	$ 7
Exercisable at March 31	59,733	$ 0.05	3.67		48,445	$ 0.05	5.05	$ -

The following table summarizes significant ranges of outstanding and exercisable options as of March 31, 2015:

Range of Exercise Prices	Options Outstanding			Options Exercisable
	Number Outstanding	Weighted Average Remaining Contractual Term (in years)	Weighted Average Exercise Price	Number Outstanding	Weighted Average Exercise Price
$ 0.02 - $0.50	107,645	4.87	$ 0.04	59,733	$ 0.05

A summary of the status of the Company's non-vested shares as of March 31, 2015 is as follows:

Non-vested Shares	Shares	Weighted Average Grant-Date Fair Value
Non-vested at January 1, 2015	14,954	$ 0.04
Granted	35,633	$ 0.02
Exercised	-	$ -
Forfeited	-	$ -
Vested	(2,675)	$ 0.04
Non-vested at March 31, 2015	47,912	$ 0.03

As of March 31, 2015, there was $592 of total unrecognized compensation expense related to non-vested stock-based compensation arrangements granted under the plans. The unrecognized compensation expense is expected to be realized over a weighted average period of 2.95 years.

Preferred Stock

Information with respect to the classes of Preferred Stock as of March 31, 2015 is as follows:

Class of Preferred Stock	Annual Dividend	Annual Dividend Payable, in Cash or In Kind	Liquidation Preference	Conversion Price	Total Preferred Shares Outstanding	Common Shares to be issued if Fully Converted
Series A-1	8%	Quarterly in Arrears	$ 1.00	$ 0.1400	892	6,375
Series B	10%	Quarterly in Arrears	$ 1.50	$ 0.0433	12,554	289,722
Series C		Quarterly in Arrears	$ 1.50	$ 0.0225	5,097	226,555
Series D-1	10%	Quarterly in Arrears	$ 1.00	$ 0.0225	7,178	319,033
Series D-2	10%	Quarterly in Arrears	$ 1.00	$ 0.0500	5,921	118,428

Information with respect to dividends issued on the Company's Preferred stock for the period ended March 31 is as follows:

	March 31,		March 31,
	2015	2014	2015	2014
	Dividends		Beneficial Conversion Feature Related to dividends
	$ 17	$ 20	$ -	$ -
Series B	302	274	-	-
Series C	123	111	13	37
Series D-1	145	93	16	31
Series D-2	143	123	-	-
Total	$ 730	$ 621	$ 29	$ 68

Series D Preferred Stock

On February 7, 2014, the Company sold for $733 in cash, net of a $47 administrative fee paid in cash to SG Phoenix and a nonrelated third party, 520 Shares of Series D-1 preferred Stock and 260 shares of Series D-2 Preferred Stock. The investors received one hundred percent (100%) warrant coverage. These warrants are immediately exercisable and expire December 31, 2016. The warrants are exercisable in whole or in part and contain a cashless exercise provision.

On March 6, 2014, the Company sold for $406 in cash, net of $4 in administrative fees paid in cash to an unrelated third party, 273 Shares of Series D-1 preferred Stock and 137 shares of Series D-2 Preferred Stock. The investors received one hundred percent (100%) warrant coverage. These warrants are immediately exercisable and expire December 31, 2016. The warrants are exercisable in whole or in part and contain a cashless exercise provision.

SG Phoenix received warrants to purchase 3,000 shares of Common stock, and two unrelated parties received warrants to purchase an aggregate of 1,600 shares of Common Stock in payment of administrative and finder's fees associated with the financings, in addition to the cash payments discussed above. These warrants are immediately exercisable and expire three (3) years from the date of issuance. The warrants are exercisable in whole or in part and contain a cashless exercise provision.

On March 24, 2015, the Company sold for $1,200 in cash, net of $33 in administrative fees paid in cash to SG Phoenix, 1,233 Shares of Series D-1 preferred Stock. The investors received 27,400 warrants, immediately exercisable into Common Stock of the Company at $0.0225 per share. The warrants expire March 23, 2018. The Company ascribed a value of $366 to the warrants using the Black Scholes Merton pricing model. See the warrant table below for more detail. The warrants are exercisable in whole or in part and contain a cashless exercise provision.

Warrants

On February 23, 2015, the Company and Venture Champion Asia Limited, an affiliate of IGC Global Limited, mutually agreed to terminate the $2,000 Credit Agreement signed in May 2014. At the time of the termination of the Credit Agreement, no amount was owed by the Company under the Credit Agreement, and contemporaneously with the termination of the Credit Agreement, the 10,909 warrants were likewise terminated.

A summary of the warrant activity is as follows:

	March 31, 2015		December 31, 2014
	Warrants	Weighted Average Exercise Price	Warrants	Weighted Average Exercise Price
Outstanding at beginning of period	213,521	$ 0.0289	77,155	$ 0.0289
Issued	27,400	$ 0.0225	21,418	$ 0.0225
Expired/Canceled	(10,909)	$ -	(4,333)	$ 0.0225
Outstanding at end of period	230,012	$ 0.0277	94,240	$ 0.0289
Exercisable at end of period	230,012	$ 0.0277	94,240	$ 0.0289

A summary of the status of the warrants outstanding and exercisable as of March 31, 2015 is as follows:

Number of Warrants	Weighted Average Remaining Life	Weighted Average Exercise Price per share
27,400	3.00	$ 0.0225
193,968	1.77	$ 0.0275
8,644	0.28	$ 0.0500
230,012	1.87	$ 0.0277