9. Stock Options and Warrants

12 Months Ended

Dec. 31, 2015

Stock Options And Warrants

9. Stock Options and Warrants

The Company granted stock options to certain employees under two plans. The 1996 Stock Option Plan was adopted in 1996 (“1996 Plan”) and had options granted under it through May 29, 2006. In 2006, the Board of Directors approved and the shareholders ratified the 2006 Stock Incentive Plan (“2006 Plan”).

The Company recognizes compensation costs only for those shares expected to vest on a straight-line basis over the requisite service period of the awards. Generally such options vest over periods of six months to two years.  The fair values of option awards granted in 2015 and 2014 were estimated using the Black-Sholes option pricing model under the following assumptions:

	2015	2014
Risk free interest rate	1.61% - 1.97%	1.52% - 1.78%
Dividend yield	0%	0%
Expected term	5-10 years	5 years
Expected volatility	41.2 – 54.2%	40.7 – 47.3%

2006 Stock Incentive Plan

The 2006 Plan became effective May 18, 2006, and expires April 12, 2016. The 2006 Plan provides for the granting of equity awards to key employees, including officers and directors. The maximum number of shares for which equity awards may be granted under the 2006 Plan is 1,950,000. Options under the 2006 Plan expire no later than ten years from the date of grant or when employment ceases, whichever comes first, and vest over periods determined by the Board of Directors. The exercise price of each option equals the quoted market price of the Company’s stock on the date of grant.

1996 Stock Option Plan

The 1996 Plan provided for the granting of options to purchase shares of our common stock to key employees, including officers and directors. The maximum number of shares for which options could be granted under the 1996 Plan was 3,075,000. Options expire no later than ten years from the date of grant or when employment ceases, whichever comes first, and vest over periods determined by the Board of Directors. There were 23,000 and 113,000 unexpired exercisable options remaining from the 1996 Plan at December 31, 2015 and 2014, respectively. 

The status of the options issued under the foregoing option plans as of December 31, 2015, and changes during the years ended December 31, 2015 and 2014, were as follows:

	Options outstanding
	Number of shares		Weighted average exercise price per share
Balance at December 31, 2013		1,187,000	$	0.26
Options granted		80,000		0.16
Options expired or forfeited		(3,000)		0.11
Balance at December 31, 2014		1,264,000		0.26
Options granted		20,000		0.20
Options expired or forfeited		(91,000)		0.42
Balance at December 31, 2015		1,193,000	$	0.24

The following table summarizes information about options at December 31, 2015:

Options outstanding								Options exercisable
Total shares		Weighted average exercise price		Weighted average remaining contractual life in years		Aggregate intrinsic value		Total shares		Weighted average exercise price		Weighted average remaining contractual life in years		Aggregate intrinsic value
	1,193,000	$	0.24		4.97	$	920		1,143,500	$	0.25		4.80	$	920

Nonvested stock awards as of December 31, 2015 and changes during the year ended December 31, 2015, were as follows:

	Nonvested
	Number of shares			Weighted average grant date fair value
Balance at December 31, 2014		209,500		$	0.07
Granted		20,000			0.11
Vested		(179,000	)		0.08
Expired before Vesting		(1,000	)		0.10
Balance at December 31, 2015		49,500		$	0.07

As of December 31, 2015 and 2014, unrecognized compensation cost associated with non-vested share based employee and non-employee compensation totaled $6,594 and $7,672, respectively, which is expected to be recognized over a weighted average period of 5 months and 7 months, respectively.