2. Stock Option Plan

6 Months Ended

Jun. 30, 2017

Notes

2. Stock Option Plan

As of June 30, 2017, options to purchase 989,281 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 six months ended June 30, 2017 follows (shares in thousands): 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 six 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 June 30, 2017, there was approximately $232 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 2.85 years.

Share-based compensation expense included in selling, general and administrative expense in the statements of operations for each of the six-month periods ended June 30, 2017 and July 1, 2016 was $86 and $72, respectively. Share-based compensation expense included in selling, general and administrative expense in the statements of operations for each of the three-month periods ended June 30, 2017 and July 1, 2016 was $46 and $48, respectively.