15.	Stock-based Compensation

During 1997, we adopted the 1997 Stock Option and Stock Purchase Plan (the “1997 Plan”), which provides for the direct award or sale of shares and for the grant of incentive stock options (“ISOs”) and non-statutory options to employees, directors or consultants. The 1997 Plan, as amended, provides for the issuance of up to 7,000,000 shares of our common stock. The exercise price of ISOs cannot be less than the fair market value of the underlying shares on the date of grant. ISOs can be granted only to employees. The 1997 Plan expired in October 2007.

During 2004, we adopted the 2004 Equity Incentive Plan (the “2004 Plan”), which provides our employees, directors and consultants the opportunity to purchase our common stock through non-qualified stock options, stock appreciation rights, restricted stock units, or restricted stock and cash awards. The 2004 Plan initially provides for issuance of 3,000,000 shares of our common stock, which number may be cumulatively increased (subject to Board discretion) on an annual basis beginning January 1, 2005, which annual increase shall not exceed 2% of our then outstanding stock. The 2004 Plan expired in August 2014.

In August 2014, we adopted the 2014 Equity Incentive Plan (the “2014 Plan”), which provides our employees, directors and consultants the opportunity to purchase our common stock in the form of options (incentive or non-qualified), stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, restricted stock units, performance shares, performance units, cash-based awards other stock-based awards, and deferred compensation awards. The 2014 Plan initially provides for issuance of 3,975,000 shares of our common stock. On August 13, 2015 the Company amended the 2014 Plan to add 4,527,000 shares to its share pool. In addition, the amendment increased the number of “incentive stock options” which may be issued under the 2014 Plan by an identical amount.

On December 29, 2015, we adopted the 2015 New Employee Incentive Plan (the “2015 Plan”). Awards under the 2015 Plan may only be made to an employee who has not previously been an employee or member of the Board or any parent or subsidiary, or following a bona fide period of non-employment by the Company or a parent or subsidiary, if he or she is granted such award in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. The 2015 Plan provides for issuance of 1,000,000 shares, no issuance took place in 2015.

As of December 31, 2015, there are 5,576,623 shares of common stock remaining and available for future issuances under the 2014 Plan, which is exclusive of securities to be issued upon an exercise of outstanding options, warrants, and rights.

Stock Options

Generally, options issued under the 2014 Plan, 2004 Plan or the 1997 Plan are subject to four-year vesting, and have a contractual term of 10 years. Most options contain one of the following two vesting provisions:

12/48 of a granted award will vest after one year of service, while an additional 1/48 of the award will vest at the end of each month thereafter for 36 months, or

1/48 of the award will vest at the end of each month over a four-year period.

A summary of activity for the year ended December 31, 2015 is as follows:

	Options			Weighted Average Exercise Price
Balance as of January 1, 2015		9,115,348		$	3.93
Granted		2,168,000		$	0.46
Exercised		—		$	—
Expired		(445,151	)	$	3.85
Cancelled/forfeited		(2,232,292	)	$	4.23
Balance as of December 31, 2015		8,605,905		$	2.99

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Balance as of December 31, 2015		8,605,905	$	2.99		6.69	$	—
Vested and expected to vest at December 31, 2015		8,470,861	$	3.02		6.65	$	—
Exercisable at December 31, 2015		5,368,247	$	4.04		5.39	$	—

There were no stock options exercised in 2015. The total intrinsic value of stock options exercised was $200 and $3,500 for the years ended December 31, 2014 and 2013, respectively.

The fair value of each option awarded during the year ended December 31, 2015, 2014 and 2013 was estimated on the date of grant using the Black-Scholes-Merton option valuation model based on the following weighted-average assumptions:

	Years ended December 31,
	2015			2014			2013
Expected term	6.0 years			6.0 years			6.0 years
Risk-free interest rate		1.58	%		1.86	%		1.12	%
Volatility		75.07	%		77.52	%		75.27	%
Dividends		—			—			—
Resulting weighted average grant date fair value	$	0.30		$	1.35		$	1.72

We calculated the expected term of our stock options based on our historical data. The expected term is calculated for and applied to all employee awards as a single group as we do not expect (nor does historical data suggest) substantially different exercise or post-vesting termination behavior amongst our employee population.

We estimate volatility based on the historical volatility of our daily stock price over the period preceding grant date commensurate with the expected term of the option.

The weighted average risk-free interest rate represents the interest rate for treasury constant maturity instruments published by the Federal Reserve Board. If the term of available treasury constant maturity instruments is not equal to the expected term of an employee option, we use the weighted average of the two Federal Reserve securities closest to the expected term of the employee option.

The dividend yield has been assumed to be zero as we (a) have never declared or paid any dividends and (b) do not currently anticipate paying any cash dividends on our outstanding shares of common stock in the foreseeable future.

Restricted Stock Awards

Generally, restricted stock awards issued under the 2014 Plan and 2004 Plan are subject to a vesting period that coincides with the fulfillment of service requirements for each award and have a contractual term of 10 years. These awards are amortized to compensation expense over the estimated vesting period based upon the fair value of our common stock on the award date.

A summary of activity for the year ended December 31, 2015 is as follows:

	Restricted Stock Awards			Weighted Average Grant Date Fair Value
Balance as of January 1, 2015		199,223		$	3.09
Granted		541,377		$	0.68
Exercised/Released		(152,682	)	$	3.13
Expired		(108,877	)	$	0.73
Cancelled/forfeited		(11,100	)	$	1.84
Balance as of December 31, 2015		467,941		$	0.81

	Restricted Stock Awards		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (years)
Balance as of December 31, 2015		467,941	$	0.81		0.94
Vested and expected to vest at December 31, 2015		279,897	$	0.90		1.21
Outstanding at December 31, 2015		18,241	$	3.21		6.82

The following summarizes the total compensation cost recognized for the stock options and restricted stock awards in the accompanying financial statements:

	Years ended December 31,
	2015		2014		2013

Total compensation cost for share-based payment arrangements recognized in the statement of operations (net of tax of $0)	$	2,041,000	$	3,101,000	$	3,608,000

As of December 31, 2015, the total compensation cost related to non-vested stock options and stock awards not yet recognized for all our plans is approximately $2,358,000, which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 1.61 years.

Cash received from stock option and warrant exercises and employee stock purchase for the years ended December 31, 2015, 2014 and 2013 was approximately $4,997,000, $4,151,000 and $225,000, respectively. No income tax benefits have been recorded related to the stock option exercises as the benefits have not been realized in our income tax returns.

To settle stock options and restricted stock awards, we will issue new shares of our common stock. At December 31, 2015, we have an aggregate of 94,237,220 shares authorized and available to satisfy option exercises under our plans.