STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2018

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

STOCK-BASED COMPENSATION

14. STOCK-BASED COMPENSATION

Under the Company's 2017 Stock Incentive Plan (the “2017 Plan”), 2016 Stock Incentive Plan (the “2016 Plan”) and the 2012 Stock Option Plan, as amended (the “2012 Plan”) (collectively, the “Plans”), options may be granted to employees, officers, consultants, service providers and directors of the Company. The Plans, as amended, provide for the issuance of a maximum of 7,372,630 shares of the Company’s common stock. The Company also has 196,000 outstanding options that were granted between 2009 and 2011 pursuant to the terms of the Company's 2002 Stock Option Plan (the “2002 Plan”). Options granted pursuant to the 2002 Plan expire between September 2008 and February 2021.

Options granted under the Plans have an exercise price equal to or greater than the fair value of the underlying common stock at the date of grant and become exercisable based on a vesting schedule determined at the date of grant. Typically, options granted generally become fully vested after four years. Any options that are forfeited or cancelled before expiration become available for future grants. The options expire between 5 and 10 years from the date of grant. Restricted stock awards granted under the Plans are subject to a vesting period determined at the date of grant. As of September 30, 2018, an aggregate of 55,773 of the Company's options are still available for future grant.

During the nine months ended September 30, 2018, the Company granted 1,000,000 options to its employees from the Plans and also granted 2,897,500 options outside of the Plans. During the nine months ended September 30, 2017, the Company granted 560,000 options from the Plans. These options become fully vested after four years. The Company estimated that the grant date fair value of options granted utilizing the Black-Scholes option pricing model during the nine months ended September 30, 2018 and 2017 was $514 and $251, respectively, which is being recognized as stock-based compensation expense over the requisite four-year service period. During the nine months ended September 30, 2018 and 2017, the Company also issued 1,583,059 and 1,336,798, respectively, shares of common stock to its consultants and service providers pursuant to the Plans. The Company estimated that the grant date fair value of these shares of common stock was $2,640 and $742, respectively, which was determined from the closing price of the Company’s common stock on the date of issuance.

The Company has valued the options at their date of grant utilizing the Black-Scholes option pricing model. This model is dependent upon several variables such as the options’ term, exercise price, current stock price, risk-free interest rate estimated over the expected term and estimated volatility of our stock over the expected term of the options. The risk-free interest rate used in the calculations is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options as calculated using the simplified method. The estimated volatility was determined based on the historical volatility of our common stock.

During the nine months ended September 30, 2018 and 2017, the Company estimated the fair value of stock options granted using the Black-Scholes option pricing model with the following weighted average assumptions:

	Nine Months Ended
	September 30, 2018	September 30, 2017
Weighted average risk-free interest rate	2.41% — 2.80%	1.73% — 2.14%
Weighted average life (in years)	4.75	5.0
Volatility	124.7% — 131.7%	98.4% — 107.2%
Expected dividend yield	0%	0%
Weighted average grant-date fair value per share of options granted	$                           0.92	$                           0.45

The options outstanding as of September 30, 2018, have been classified by exercise price, as follows:

Outstanding				Exercisable
		Weighted
		Average	Weighted		Weighted
		Remaining	Average		Average
Exercise	Number	Contractual	Exercise	Number	Exercise
Price	Outstanding	Life (Years)	Price	Exercisable	Price
$0.57 - $0.80	3,340,000	7.74	$0.67	1,817,499	$0.67
$1.00 - $1.38	170,000	8.78	$1.37	51,250	$1.36
$1.51 - $1.69	62,500	3.96	$1.64	62,500	$1.64
$0.57 - $1.69	3,572,500	7.72	$0.72	1,931,249	$0.71
Issuances outside of Plans
$0.80 - $2.32	3,997,500	7.65	$1.30	325,694	$1.61
Total Options
$0.57 - 2.32	7,570,000	7.68	$1.03	2,256,943	$0.84

The total stock-based compensation expense related to stock options and stock awards issued pursuant to the Plans to the Company’s employees, consultants and directors, included in reported net loss for the three and nine months ended September 30, 2018 and 2017, is comprised as follows:

	Three Months Ended		Nine Months Ended
	Sept. 30, 2018	Sept. 30, 2017	Sept. 30, 2018	Sept. 30, 2017
Cost of revenues	$                    —	$                      2	$                      5	$                      6
Engineering and product development	—	6	14	20
Selling and marketing	—	8	12	18
General and administrative	697	349	2,204	1,017
Stock-based compensation from Plans	$                  697	$                  365	$               2,235	$               1,061
Stock-based compensation from issuances outside of Plans	655	152	1,928	208
Total Stock-based compensation	$               1,352	$                  517	$               4,163	$               1,269

The combination of stock-based compensation of $2,235 from the issuances of equity-based awards pursuant to the Plans and stock-based compensation attributed to stock awards of $1,361 and warrants and options of $567, which were issued outside of the Plans, resulted in aggregate stock-based compensation of $1,352 and $4,163 during the three and nine months ended September 30, 2018. During the nine months ended September 30, 2018, the Company issued 2,897,500 options to purchase shares of common stock at an average exercise price of $1.30 per share to its directors and officers. These shares were issued outside of the Plans and are subject to shareholder approval. During the nine months ended September 30, 2017, stock-based compensation was comprised of $1,061 from the issuances of equity-based awards pursuant to the Plans and stock-based compensation attributed to stock awards of $130 and warrants and options of $78, which were issued outside of the Plans.

A summary of option activity under the Company's stock option plans as of September 30, 2018, and changes during the nine months ended are as follows:

			Weighted	Average
	Shares		Average	Remaining	Aggregate
	Available	Number	Exercise	Contractual	Intrinsic
	for Grant	of Shares	Price	Life (years)	Value
January 1, 2018	2,538,832	2,742,500	$0.77	8.80	$6,688
Restricted stock awards	(1,583,059)	—
Granted	(1,000,000)	1,000,000	$0.70
Forfeited 1	100,000	(110,000)	$1.33
Exercised	—	(60,000)	$1.63
September 30, 2018	55,773	3,572,500	$0.72	7.72	$0

¹ Includes 10,000 options that were issued pursuant to the Company’s 2002 Plan and are not available for future issuance.

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on September 30, 2018 of $0.42 and the exercise price, multiplied by the number of in-the-money-options).

As of September 30, 2018, there was $860 of unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted average period of 3.2 years.