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STOCK-BASED COMPENSATION PLANS
 12 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based 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 and 2016 have not been approved by the Company’s shareholders and were issued as non-qualified stock options.
 
For the years ended December 31, 2016 and 2015, the Company recorded compensation expense related to stock options of $200 and $130, respectively, in selling, general and administrative expenses.
 
During the years ended December 31, 2016 and 2015, the Company granted options to purchase up to 879,000 and 629,000 shares of common stock, respectively, to employees at a weighted average exercise that ranged from $0.14 to $0.39 per share in 2016 and $0.17 to $0.45 per share in 2015. 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 years ended December 31, 2016 and 2015:
 
 
 
2016
 
 
2015
 
Weighted average expected term
 
 
6.25 years
 
 
 
4.71 years
 
Weighted average volatility
 
 
122
%
 
 
132
%
Weighted average risk-free interest rate
 
 
1.48
%
 
 
1.25
%
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.
 
A summary of stock option activity under the Option Plan for the years ended December 31, 2016 and 2015 are presented below:
 
 
 
 
 
 
 
Weighted
 
 
 
 
 
 
 
Weighted
 
Average
 
 
 
 
 
Shares
 
Average
 
Remaining
 
Aggregate
 
 
 
Under
 
Exercise
 
Contractual
 
Intrinsic
 
 
 
Option
 
Price
 
Life
 
Value
 
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
 
$
—
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at January 1, 2016
 
 
1,685,250
 
$
0.46
 
 
 
 
 
 
Granted
 
 
879,000
 
$
0.26
 
 
 
 
 
 
Exercised
 
 
(1,000)
 
$
0.15
 
 
 
 
 
 
Forfeited
 
 
(373,000)
 
$
0.33
 
 
 
 
 
 
Outstanding at December 31, 2016
 
 
2,190,250
 
$
0.40
 
6.7 Years
 
$
—
 
Exercisable at December 31, 2016
 
 
1,617,797
 
$
0.45
 
6.1 Years
 
$
—
 
 
A summary of status of the Company’s non-vested share awards as of and for the years ended December 31, 2016 are presented below:
 
 
 
Non-vested
 
Weighted
 
 
 
Shares
 
Average
 
 
 
Under
 
Grant Date
 
 
 
Option
 
Fair Value
 
Non-vested at January 1, 2016
 
 
672,155
 
$
0.31
 
Granted
 
 
879,000
 
$
0.26
 
Vested
 
 
(652,702)
 
$
0.26
 
Exercised
 
 
(1,000)
 
$
0.15
 
Forfeited
 
 
(326,000)
 
$
0.36
 
Non-vested at December 31, 2016
 
 
571,453
 
$
0.27
 
 
As of December 31, 2016, the Company had approximately $79 of unrecognized compensation expense related to stock options that will be recognized over a weighted average period of approximately three years.