Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2015

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation Plans

(6) STOCK-BASED COMPENSATION PLANS

The Company previously reserved 3,000,000 shares of common stock for issuance under its 2005 Stock Option Plan (the “Option Plan”). The Option Plan expired as of December 31, 2014. Vesting provisions are determined by the Board of Directors. All stock options under the Option Plan expire no later than ten years from the date of grant. Since the Option Plan expired, the options granted in 2015 have not been approved by the Company’s shareholders and were issued as non-qualified stock options.

For the years ended December 31, 2015 and 2014, the Company recorded compensation expense related to stock options of $130 and $ 93, respectively. Stock-based compensation recorded in the accompanying consolidated statement of operations for the years ended December 31, 2015 and 2014, included none and $ 8, respectively, in cost of goods sold and $130 and $ 85, respectively, in selling, general and administrative expenses.

During the years ended December 31, 2015 and 2014, the Company granted options to purchase up to 629,000 and 518,750 shares of common stock, respectively, to employees at a weighted average exercise that ranged from $0.17 to $0.45 per share in 2015 and $0.18 to $0.26 per share in 2014. The 2015 grants were issued as non-qualified stock options.

The Company used the Black Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions during the years ended December 31, 2015 and 2014:

	2015			2014
Weighted average expected term	4.71 years			6.25 years
Weighted average volatility		132	%		121	%
Weighted average risk-free interest rate		1.25	%		1.67	%
Dividend yield		0	%		0	%

The weighted average expected term of stock options represents the period of time that the stock options granted are expected to be outstanding based on historical exercise trends. The weighted average expected volatility is based on the historical price volatility of the Company’s common stock. The weighted average risk-free interest rate represents the U.S. Treasury bill rate for the expected term of the related stock options. The dividend yield represents the Company’s anticipated cash dividend over the expected term of the stock options.

Forfeitures of share-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 average forfeiture rate for the years ended December 31, 2015 and 2014 was 44% and 40%, respectively.

A summary of stock option activity under the Option Plan for the years ended December 31, 2015 and 2014 are presented below:

	Shares Under Option			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at January 1, 2014		2,469,716		$	0.57
Granted		518,750		$	0.25
Exercised		—
Forfeited		(1,146,697	)	$	0.45
Outstanding at December 31, 2014		1,841,769		$	0.59	7.2 Years	$	—
Exercisable at December 31, 2014		895,829		$	0.93	5.5 Years	$	—
Outstanding at January 1, 2015		1,841,769		$	0.59
Granted		629,000		$	0.43
Exercised		—
Forfeited		(785,519	)	$	0.74
Outstanding at December 31, 2015		1,685,250		$	0.46	6.8 Years	$	—
Exercisable at December 31, 2015		1,013,095		$	0.55	6.2 Years	$	—

A summary of status of the Company’s non-vested share awards as of and for the years ended December 31, 2015 and 2014 are presented below:

	Non-vested Shares Under Option			Weighted Average Grant Date Fair Value
Non-vested at January 1, 2015		945,940		$	0.29
Granted		629,000		$	0.43
Vested		(619,052	)	$	0.40
Forfeited		(283,733	)	$	0.74
Non-vested at December 31, 2015		672,155		$	0.31

As of December 31, 2015, the Company had approximately $ 94 of unrecognized compensation expense related to stock options that will be recognized over a weighted average period of approximately three years.