Note 7 — Equity

Stock Repurchase Program

In January 2016, the Board of Directors authorized a stock repurchase program under which shares, not to exceed $6.0 million in aggregate cost, of our outstanding common stock can be repurchased through June 30, 2016 at the discretion of management. We account for stock repurchases using the cost method. Cost includes fees charged in connection with acquiring the treasury stock. As of June 30, 2016, 673,700 shares, at an aggregate cost of $4.1 million, had been repurchased under this authorization. This authorization was replaced with a new authorization in May 2016.

In May 2016, the Board of Directors authorized a stock repurchase plan under which shares, not to exceed $10.0 million in aggregate cost, of our outstanding common stock could be repurchased through October 31, 2016 at the discretion of management. As of June 30, 2016, 454,100 shares, at an aggregate cost of $4.3 million, had been repurchased under this authorization.

Stock-based Compensation Expense

For the three and six months ended June 30, 2016 and 2015, we recognized stock-based compensation expense related to employees and consultants as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		201 5		2016		201 5
Cost of revenue	$	24	$	37	$	62	$	72
General and administrative		373		1,679		1,257		2,576
Sales and marketing		125		106		284		207
Research and development		155		91		262		198
Total stock-based compensation expense	$	677	$	1,913	$	1,865	$	3,053

Stock-based compensation in the three and six months ended June 30, 2015 included modification expenses in connection with the resignation of the former Chief Executive Officer related to the accelerated vesting, extended vesting, and extended exercise period of options previously granted of approximately $1.3 million.

In connection with the resignation of the former General Counsel, Chief Compliance Officer, and Secretary, additional stock based compensation of approximately $0.5 million was recorded in the first quarter of 2016 related to the continued vesting of awards granted prior to the resignation.

Stock Option Plan

On June 23, 2016, our stockholders approved the 2016 Incentive Plan (the “Plan”). Prior to June 23, 2016, we maintained an equity incentive plan, the Amended and Restated 2008 Equity Incentive Plan (the “Prior Plan”). Stock-based awards granted under the Plan generally vest over four years and expire no more than ten years after the date of grant. Subject to adjustments as provided in the Plan, the number of shares of common stock initially authorized for issuance under the Plan is 4,441,083, plus up to 7,635,410 shares subject to outstanding awards under the Prior Plan that subsequently cease to be subject to such awards (other than by reason of exercise or settlement of the awards in shares). On July 27, 2016, we filed a registration statement on Form S-8 with respect to 4,441,083 shares issuable under the Plan. The Plan supersedes all previously issued stock incentive plans and will be the only available plan from which stock related awards may be granted.

Stock Option Activity

The following table summarizes the stock option activity under the Plan and includes options granted under all previous plans:

	Options Outstanding
	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in Years)		Aggregate Intrinsic Value (2)
Balance December 31, 2015		7,198,479		$	3.97		7.0	$	22,875,000
Granted		872,017		$	8.49		—		—
Exercised		(783,042	)	$	3.21		—		—
Forfeited		(53,316	)	$	5.44		—		—
Balance June 30, 2016		7,234,138		$	4.58		7.2	$	31,185,000

Vested and exercisable as of June 30, 2016		4,439,757		$	4.20		6.1	$	20,838,000
Vested and exercisable as of June 30, 2016 and expected to vest thereafter (1)		6,780,263		$	4.53		7.0	$	29,888,000

(1)

Options that are expected to vest are net of estimated future option forfeitures in accordance with the provisions of ASC 718,

“

Compensation — Stock

Compensation.

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(2)

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of our common stock as of June 30, 2016 of $8.89 per share

As of June 30, 2016, total unrecognized compensation cost related to non-vested options, net of estimated forfeitures, was $6.8 million, which is expected to be recognized as an expense over a weighted average period of approximately 2.74 years.

Restricted Stock

Unit Activity

The following table summarizes the restricted stock unit activity under the Plan and includes restricted stock units granted under all previous plans:

	Units		Weighted Average Grant-Date Fair Value
			(Per unit)
Outstanding at December 31, 2015		—	$	—
Awarded		213,514	$	8.65
Vested		—	$	—
Forfeited		—	$	—
Outstanding at June 30, 2016		213,514	$	8.65

As of June 30, 2016, total unrecognized compensation cost related to non-vested restricted stock units, net of estimated forfeitures, was $1.3 million, which is expected to be recognized as an expense over a weighted average period of approximately 3.7 years.