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2. Stock Option Plan
 3 Months Ended
Mar. 31, 2017
Notes  
2. Stock Option Plan

2.     STOCK OPTION PLAN

As of March 31, 2017, options to purchase 989,381 shares of common stock under the Company’s stock option plan were authorized and reserved for future grant.  A summary of activity in the stock option plan for the three months ended March 31, 2017 follows (shares in thousands):

 

 

 

 

Weighted-

 

 

 

Average

 

Number

 

Exercise

 

of Shares

 

Price

 

 

 

 

Outstanding as of beginning of the period

              1,625 

   $            0.88

Granted

                  140 

                  1.39

Exercised

                       - 

Forfeited or expired

                (156)

                  3.62

Outstanding as of end of the period

              1,609 

                  0.66

 

Exercisable as of end of the period

              1,145 

   $            0.51

 

 

As of March 31, 2017, options exercisable and options outstanding had a weighted average remaining contractual term of 5.14 and 6.50 years, respectively, and had an aggregate intrinsic value of $1,145 and 1,441, respectively.

 

The Black-Scholes option-pricing model is used to estimate the fair value of options under the Company’s stock option plan. The weighted average values of employee stock options granted under the stock option plan, as well as the weighted average assumptions used in calculating these values during the first three months of 2017, were based on estimates as of the date of grant as follows:

 

Risk-free interest rate

 

       1.47%

Dividend yield

 

       0.00%

Volatility

 

   176%

Expected life

 

        3.5 years

 

Expected option life and volatility are based on historical data of the Company.   The risk-free interest rate is calculated based on the average US Treasury bill rate that corresponds with the option life.  Historically, the Company has not declared dividends and there are no foreseeable plans to do so.

 

As of March 31, 2017, there was approximately $277 of total unrecognized share-based compensation cost related to grants under the stock option plan that will be recognized over a weighted-average period of 3.07 years.

 

Share-based compensation expense included in selling, general and administrative expense in the statements of operations for each of the three-month periods ended March 31, 2017 and April 1, 2016 was $39 and $25, respectively.