v3.4.0.3
Stock-Based Compensation
 3 Months Ended
Mar. 31, 2016
Equity [Abstract]  
Stock-Based Compensation

NOTE 2. Stock-Based Compensation

The Company has two stock-based compensation plans: the 2006 Equity Incentive Plan (“2006 Plan”) and the 2015 Equity Incentive Plan (“2015 Plan”), both of which were approved by our stockholders. As of March 31, 2016, options to purchase 942,000 and 315,000 shares were outstanding under the 2006 Plan and the 2015 Plan, respectively, and a total of 899,000 shares were available for grant under the 2015 Plan. No options are available for grant under the 2006 Plan.

The Company’s stock options vest on an annual or a monthly basis. Stock options generally are exercisable for up to seven years after grant, subject to continued employment or service. The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. Such amount may change as a result of additional grants, forfeitures, modifications in assumptions and other factors. Income tax effects of share-based payments are recognized in the financial statements for those awards which will normally result in tax deductions under existing tax law. During the three months ended March 31, 2016 and 2015, we recorded an expense of $77,000 and $51,000, respectively, related to options previously granted. Under current U.S. federal tax law, we receive a compensation expense deduction related to non-qualified stock options only when those options are exercised and vested shares are received. Accordingly, the financial statement recognition of compensation expense for non-qualified stock options creates a deductible temporary difference that results in a deferred tax asset and a corresponding deferred tax benefit in our consolidated statements of operations.

During the three months ended March 31, 2016 and 2015, the Company did not grant any stock options. As of March 31, 2016, there was $341,000 of total unrecognized compensation expense related to non-vested stock options. That expense is expected to be recognized over the remaining weighted-average period of 1.51 years.

 

A summary of option activity under both the 2006 Plan and the 2015 Plan as of March 31, 2016 and changes during the three months then ended is presented in the table below (shares in thousands):

 

     Shares      Wtd. Avg.
Exercise Price		      Wtd. Avg.
Remaining
Contractual
Life in Years		  

Outstanding at December 31, 2015

      1,257       $ 1.04         4.51   

Granted

      —        $ —       

Exercised

      —        $ —       

Forfeited

      —        $ —       
  

 

 

        

Outstanding at March 31, 2016

      1,257       $ 1.04         4.26   
  

 

 

        

Vested and expected to vest

      1,190       $ 1.01         4.17   

Exercisable at March 31, 2016

      876       $ 0.82         3.37   

A summary of the status of the Company’s non-vested options at March 31, 2016 and changes during the three months then ended is presented below (shares in thousands):

 

     Shares      Weighted-average
grant-date fair value		  

Non-vested at December 31, 2015

      450       $ 1.16   

Granted

      —        $ —    

Vested

      (69 )     $ 1.07   

Forfeited

      —        $ —    
  

 

 

     

 

 

  

Non-vested at March 31, 2016

      381       $ 1.17   
  

 

 

     

 

 

  

The Company’s share-based compensation is classified in the same expense line item as cash compensation. Information about share-based compensation included in the unaudited results of operations for the three months ended March 31, 2016 and 2015 is as follows (in thousands):

 

     For the Three Months Ended
March 31,		  
     2016      2015  

Officer compensation

    $ 33       $ 23   

Non-employee directors

      16         11   

Sales, general and administrative

      28         17   
  

 

 

     

 

 

  

Total share-based compensation expense

    $ 77       $ 51