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Stockholders' Equity
 9 Months Ended
Sep. 30, 2015
Stockholders' Equity Note [Abstract]  
Stockholders' Equity
STOCKHOLDERS’ EQUITY

Common stock follow-on offering

On September 11, 2015, the Company announced the pricing of a registered underwritten follow-on offering of shares of its common stock by it and certain of its stockholders (the "Selling Stockholders"). The Company sold 1.5 million shares of its common stock and the Selling Stockholders sold an additional 1.5 million shares of the Company’s common stock on the same terms and conditions.

The offering closed on September 16, 2015 and we received $23.6 million in net proceeds from the transaction, after giving effect to underwriting discounts and commissions and estimated expenses. We expect to use the net proceeds from the offering to finance our growth efforts, for working capital, and other general corporate purposes.

Warrants

A summary of warrant activity for the nine months ended September 30, 2015 is presented as follows:

 
Warrants
Outstanding
 
Weighted
Average
Exercise
Price During
Period
Balance at December 31, 2014
969,549

 
$
4.61

Exercised
(638,189
)
 
4.58

Canceled/forfeited
(112,110
)
 
5.54

Expired
(205,000
)
 
4.20

Balance at September 30, 2015
14,250

 
$
4.30

 
 
 
 
Exercisable at September 30, 2015
—

 
$
—



Stock-based compensation

Stock-based compensation expense is attributable to stock options and restricted stock unit awards. For all stock-based awards, we recognize expense using a straight-line amortization method.

The following table summarizes stock-based compensation expense and the impact it had on operations for the periods presented (in thousands):

 
Three months ended
September 30,
 
Nine months ended
September 30,
 
2015
 
2014
 
2015
 
2014
Cost of sales
$
11

 
$
4

 
$
29

 
$
8

Product development
10

 
3

 
26

 
5

Selling, general, and administrative
294

 
140

 
544

 
380

Total stock-based compensation
$
315

 
$
147

 
$
599

 
$
393



Total unearned stock-based compensation was $1.4 million at September 30, 2015, compared to $485 thousand at September 30, 2014. These costs will be charged to expense and amortized on a straight-line basis in subsequent periods. The weighted average period over which the unearned compensation at September 30, 2015 is expected to be recognized is approximately 2.1 years.

Stock options

The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model. Estimates utilized in the calculation include the expected life of the option, risk-free interest rate, and expected volatility, and are further comparatively detailed as follows:

 
Nine months ended
September 30,
 
2015
 
2014
Fair value of options issued
$
5.18

 
$
3.44

Exercise price
$
7.04

 
$
4.48

Expected life of option (in years)
5.8

 
5.6

Risk-free interest rate
1.7
%
 
1.8
%
Expected volatility
90.7
%
 
97.9
%
Dividend yield
0.0
%
 
0.0
%


A summary of option activity under all plans for the nine months ended September 30, 2015 is presented as follows:

 
Number of
Option
 
Weighted
Average
Exercise
Price Per
Share
 
Weighted
Average
Remaining
Contractual
Life (in years)
Balance at December 31, 2014
459,271

 
$
8.95

 
 
Granted
326,000

 
8.35

 
 
Exercised
(45,361
)
 
4.63

 
 
Canceled/forfeited
(105,565
)
 
6.26

 
 
Expired
(5,900
)
 
96.00

 
 
Balance at September 30, 2015
628,445

 
$
8.58

 
8.4
 
 
 
 
 
 
Vested and expected to vest at September 30, 2015
575,974

 
$
8.71

 
8.3
 
 
 
 
 
 
Exercisable at September 30, 2015
282,583

 
$
9.18

 
7.2

Restricted stock units

A summary of restricted stock unit activity under all plans for the nine months ended September 30, 2015 is presented as follows:

 
Restricted
Stock Units
 
Weighted
Average
Grant
Date
Fair Value
 
Weighted
Average
Remaining
Contractual
Life (in years)
Balance at December 31, 2014
—

 
$
—

 
 
Granted
72,750

 
6.82

 
 
Canceled/forfeited
(14,250
)
 
5.55

 
 
Balance at September 30, 2015
58,500

 
$
7.13

 
1.1