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STOCK-BASED COMPENSATION PLANS
 6 Months Ended
Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION PLANS
(5) 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 and 2016 have not been approved by the Company’s shareholders and were issued as non-qualified stock options.
 
In the six months ended June 30, 2016 and 2015, the Company recorded compensation expense related to stock options of $159 and $15, respectively. Stock-based compensation recorded in the accompanying condensed consolidated statement of operations for the six months ended June 30, 2016 and 2015, included $0 and $2, respectively, in cost of revenue and $159 and $13, respectively, in selling, general and administrative expenses.
 
During the six months ended June 30, 2016, the Company granted options to purchase up to 754,000 shares of common stock to employees at a weighted average exercise of $0.27 per share. The 2016 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 three months ended June 30, 2016:
 
 
 
 
2016
 
Weighted average expected term
 
 
6.25 years
 
Weighted average volatility
 
 
122.61
%
Weighted average risk-free interest rate
 
 
1.54
%
Dividend yield
 
 
0
%
 
A summary of stock option activity under all equity compensation plans for the six months ended June 30, 2016, is presented below:
 
 
 
Shares 
Under 
Option
 
Weighted 
Average 
Exercise 
Price
 
Weighted 
Average 
Remaining 
Contractual 
Life
 
Aggregate 
Intrinsic 
Value
 
Outstanding at January 1, 2016
 
 
1,685,250
 
$
0.46
 
 
 
 
 
 
 
Granted
 
 
754,000
 
$
0.27
 
 
 
 
 
 
 
Exercised
 
 
-
 
 
 
 
 
 
 
 
 
 
Forfeited
 
 
(1,000)
 
$
0.43
 
 
 
 
 
 
 
Outstanding at June 30, 2016
 
 
2,438,250
 
$
0.41
 
 
7.37 years
 
$
-
 
Exercisable at June 30, 2016
 
 
1,469,599
 
$
0.47
 
 
6.37 years
 
$
-
 
 
A summary of status of the Company’s non-vested share awards as of and for the six months ended June 30, 2016, is presented below:
 
 
 
Non-vested Shares
Under Option
 
Weighted Average
Grant Date Fair Value
 
Non-vested at January 1, 2016
 
 
672,155
 
$
0.31
 
Granted
 
 
754,000
 
$
0.27
 
Vested
 
 
(456,504)
 
$
0.27
 
Forfeited
 
 
(1,000)
 
$
0.43
 
Non-vested at June 30, 2016
 
 
968,651
 
$
0.30
 
 
As of June 30, 2016, the Company had approximately $304 of unrecognized compensation expense related to stock options that will be recognized over a weighted average period of approximately 5 years.