(4) STOCK-BASED COMPENSATION PLANS

In June 2017, our stockholders approved the 2017 Stock Incentive Plan (the “2017 Stock Plan”) with a maximum of 5,000,000 shares reserved for issuance. Awards permitted under the 2017 Stock Plan include: Stock Options and Restricted Stock. Awards issued under the 2017 Stock Plan are at the discretion of the Board of Directors. As applicable, awards are granted with an exercise price equal to the closing price of our common stock on the date of grant and generally vest over four years. At March 31, 2018, 0.6 million remain issued and outstanding.

During the three months ended March 31, 2018, no Stock Option awards were granted under the 2017 Stock Plan.

During the three months ended March 31, 2018, 65,000 shares of restricted stock were granted to the Board of Directors and management under the 2017 Stock Plan. There were no restricted shares issued during the three months ended March 31, 2017. During the three months ended March 31, 2018, no shares of restricted stock vested. No shares of restricted stock were forfeited during the three months ended March 31, 2018. The fair market value of restricted shares for share-based compensation expensing is equal to the closing price of our common stock on the date of grant. The restrictions on the stock awards are typically released quarterly or annually over four years

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 of the expired plan were to be determined by the Board of Directors. All stock options under the Option Plan expire no later than ten years from the date of grant. Options granted in 2016 and through May 2017 prior to the approval of the 2017 Stock Incentive Plan were approved by and certified by the board of directors on September 6, 2017 under the existing 2005 stock option plan. At March 31, 2018, 1.3 million remain issued and outstanding under the 2005 Stock Option Plan.

The following summarizes stock-based compensation expenses recorded in the condensed consolidated statements of operations:

During the three months ended March 31, 2018 and 2017, the Company recorded compensation expense related to stock options of approximately $63,000 and $24,000, respectively, all of which was recorded in selling, general and administrative expense on the accompanying condensed consolidated statements of operations.

During the three months ended March 31, 2018, there were no options granted, only the aforementioned restricted stock grants.

During the three months ended March 31, 2017, the Company granted options to purchase up to 0.2 million shares of common stock to employees at a weighted average exercise price of $0.21 per share. The weighted-average grant date fair value of options granted during the three months ended March 31, 2017 were $0.28.

The Company received proceeds of $0.1 million related to option exercises during the three months ended March 31, 2018. No options were exercised during the three months March 31, 2017

The Company used the Black Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions for 2017. There were no options granted during the three months ended March 31,2018:

	For the Three Months Ended March 31,
	2018			2017
Expected term (years)		-			6.25
Risk-free interest rate		-	%		1.64	%
Expected volatility		-	%		129.04	%
Expected dividend yield		-	%		0.00	%

A summary of stock option and restricted stock activity under all equity compensation plans for the three months ended March 31, 2018, is presented below:

					Weighted-
					Average
			Weighted-		Remaining		Aggregate
	Number of		Average		Contractual		Intrinsic
	Shares		Exercise		Term		Value
	(in thousands)		Price		(Years)		(in thousands)
Outstanding at December 31, 2017		2,136	$	0.54		6.31	$	5,645
Granted		65		0.00
Forfeited		(6)		1.28
Exercised		(237)		0.36
Outstanding at March 31, 2018		1,958	$	0.54		6.27	$	5,579

Exercisable at March 31, 2018		1,261	$	0.40		4.99	$	3,720

As of March 31, 2018, the Company had approximately $0.6 million of unrecognized compensation expense related to stock options that will be recognized over a weighted average period of approximately 2.97 years.