Stockholders' Equity

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Stockholders' Equity

10. Stockholders’ Equity

Common Stock

During 2016, we awarded 35,000 shares of restricted common stock to seven members of our board of advisors. The valuation of the restricted common stock awards was based on the closing fair market value of our common stock on the grant date. For the awards made to board of advisors, such fair market value was $1.65 per share. These shares were canceled in the three-month period ended September 2016 and we did not recognize additional stock compensation expense on the unvested awards upon cancellation.

On July 24, 2015 we entered into a securities purchase agreement and subscription agreement, pursuant to which we issued and sold for cash an aggregate of 2,105,919 shares of our common stock at a purchase price of $1.21 per share. We derived gross proceeds of $2,550,500 from this placement (the “2015 Transaction”).

During 2015, we granted 57,911 options to purchase common stock to our Chief Financial Officer at a weighted average exercise price of $1.80 per share.

During 2015, we awarded 15,000 shares of restricted common stock to employees. The valuation of the restricted common stock awards was based on the closing fair market value of our common stock on the grant date. For the awards made to employees, such fair market value ranged from $1.95 to $2.40 per share.

Stock-Based Compensation Plans

Active Plans

2012 Equity Incentive Plan. In November 2012, the Company’s 2012 Equity Incentive Plan (the “12 Plan”) was approved by the stockholders. Pursuant to the terms of the 12 Plan, stock options, stock appreciation rights, restricted stock and restricted stock units (sometimes referred to individually or collectively as “awards”) may be granted to officers and other employees, non-employee directors and independent consultants and advisors who render services to the Company. The Company is authorized to issue options to purchase up to 643,797 shares of common stock, stock appreciation rights, or restricted stock in accordance with the terms of the 12 Plan.

In the case of a restricted stock award, the entire number of shares subject to such award would be issued at the time of the grant and subject to vesting provisions based on time or other conditions specified by the Board or an authorized committee of the Board. For awards based on time, should the grantee’s service to the Company end before full vesting occurred, all unvested shares would be forfeited and returned to the Company. In the case of awards granted with vesting provisions based on specific performance conditions, if those conditions were not met, then all shares would be forfeited and returned to the Company. Until forfeited, all shares issued under a restricted stock award would be considered outstanding for dividend, voting and other purposes.

Under the 12 Plan, the exercise price of non-qualified stock options granted is to be no less than 100% of the fair market value of the Company’s common stock on the date the option is granted. The exercise price of incentive stock options granted is to be no less than 100% of the fair market value of the Company’s common stock on the date the option is granted provided, however, that if the recipient of the incentive stock option owns greater than 10% of the voting power of all shares of the Company’s capital stock then the exercise price will be no less than 110% of the fair market value of the Company’s common stock on the date the option is granted. The purchase price of the restricted stock issued under the 12 Plan shall also not be less than 100% of the fair market value of the Company’s common stock on the date the restricted stock is granted.

All options granted under the 12 Plan are immediately exercisable by the optionee; however, there is a vesting period for the options. The options (and the shares of common stock issuable upon exercise of such options) vest, ratably, over a 33-month period; however, no options (and the underlying shares of common stock) vest until after three months from the date of the option grant. The exercise price is immediately due upon exercise of the option. The maximum term of options issued under the 12 Plan is ten years. Shares issued upon exercise of options are subject to the Company’s repurchase, which right lapses as the shares vest. The 12 Plan will terminate no later than November 7, 2022.

During the year ended December 31, 2016, no options were granted under the 12 Plan. There were 35,000 shares of restricted common stock, with a weighted average grant date fair value of $1.65, granted, no options had been exercised and 229,369 shares of common stock remained available for issuance under the 12 Plan.

No options previously issued under the 12 Plan were exercised during the year ended December 31, 2016.

Inactive Plans

The following table summarizes options outstanding as of December 31, 2016 and 2015 that were granted from stock based compensation plans that are inactive. As of December 31, 2016 no options can be granted under these plans.

			Options Outstanding
	Year		Beginning of Year		Granted		Exercised			Cancelled			End of Year
2008 Stock Option Plan		2016		395,545		—		(1,800	)		(13,134	)		380,611
2005 Equity Incentive Plan		2016		14,000		—		—			(6,334	)		7,666
Supplemental Stock Option Agreement		2016		333		—		—			—			333
				409,878		—		(1,800	)		(19,468	)		388,600
2008 Stock Option Plan		2015		430,000		—		(6,000	)		(28,455	)		395,545
2005 Equity Incentive Plan		2015		17,333		—		—			(3,333	)		14,000
Supplemental Stock Option Agreement		2015		333		—		—			—			333
				447,666		—		(6,000	)		(31,788	)		409,878

Summary – All Plans

A summary of the status of all of the options outstanding under all of the Company’s stock option plans, and non-plan grants to consultants, as of December 31, 2016 and 2015, and changes during the years then ended, is presented in the following table:

	2016					2015
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Beginning		705,990		$	2.63		685,867		$	2.70
Granted		—		$	—		57,911		$	1.80
Exercised		(1,800	)	$	0.81		(6,000	)	$	0.79
Forfeited or expired		(19,468	)	$	2.74		(31,788	)	$	3.26
Ending		684,722		$	2.64		705,990		$	2.63
Exercisable at year-end		684,722			2.64		705,990		$	2.63
Vested or expected to vest at year-end		684,571		$	2.64		704,763		$	2.64
Weighted average fair value of options granted during the period				$	2.64				$	2.63

As of December 31, 2016 and 2015, of the options exercisable, 615,172 and 526,648 were vested, respectively.

The following table summarizes information about stock options outstanding as of December 31, 2016:

	Options Outstanding						Options Exercisable
Range of Exercise Price	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$0.75-$1.80		100,842		6.25	$	1.37		85,734	$	1.30
$1.82-$1.82		93,334		7.43	$	1.82		77,778	$	1.83
$2.06-$2.40		70,001		5.78	$	2.28		68,889	$	2.29
$2.48-$2.48		7,332		0.04	$	2.48		7,332	$	2.48
$2.54-$2.54		113,335		7.93	$	2.54		75,554	$	2.54
$2.55-$3.00		74,001		5.05	$	2.71		74,001	$	2.71
$3.03-$3.30		40,601		4.97	$	3.07		40,601	$	3.07
$3.45-$3.45		103,083		5.02	$	3.45		103,083	$	3.45
$4.20-44.20		80,000		4.69	$	4.20		80,000	$	4.20
$5.70-$6.88		2,193		4.97	$	6.38		2,200	$	6.38
$0.75-$6.68		684,722		6.0	$	2.64		615,172	$	2.68

As of December 31, 2016, there were outstanding options to purchase 684,722 shares of common stock with a weighted average exercise price of $2.64 per share, a weighted average remaining contractual term of 6 years and an aggregate intrinsic value of $0. Of the options outstanding as of December 31, 2016, 615,172 were vested, 69,399 were estimated to vest in future periods and 151 were estimated to be forfeited or to expire in future periods.

As of December 31, 2016, there was approximately $48,100 of total unrecognized compensation cost, net of estimated forfeitures, related to unvested options. That cost is expected to be recognized over a weighted-average period of approximately twelve months.

During 2016, the Company awarded 35,000 shares of restricted common stock, which vest ratably, over a 12-month period; however, these shares were canceled in the three-month period ended September 30, 2016. The Company includes the common stock underlying the restricted stock award in shares outstanding once the common stock underlying the restricted stock award has vested and the restriction has been removed (“releases” or “released”).

A summary of the status of all of the Company’s unreleased restricted stock awards as of December 31, 2016 and 2015 and changes during the years then ended, is summarized in the following table.

	2016					2015
	Shares			Weighted Average Fair Value		Shares			Weighted Average Fair Value
Beginning unreleased		106,586		$	2.31		287,666		$	2.66
Awarded		35,000		$	1.65		15,000		$	2.35
Released		(71,429	)	$	2.32		(116,500	)	$	3.09
Forfeited		(70,157	)	$	1.91		(79,580	)	$	2.42
Ending unreleased		-					106,586		$	2.31

There are no unreleased restricted stock awards at December 31,2016.

As of December 31, 2016, there was approximately $0 of total unrecognized compensation cost, net of estimated forfeitures, related to unreleased restricted stock awards. During the year, we accelerated and released all of the remaining of employees’ unvested restricted award shares.