Note 3 – Stock-based Compensation

Options

At September 30, 2017 the Company had four stock-based compensation plans, which are described more fully in Note 15 to the audited consolidated financial statements for the year ended December 31, 2016, contained in the Company’s most recently filed Annual Report on Form 10-K.

During the nine months ended September 30, 2017, the Company issued options to purchase a total of 50,000 shares of common stock to the Company’s independent directors as part of their annual compensation. During the same period, the Company cancelled options to purchase 149,850 shares of common stock as a result of employee resignations. Pursuant to the exercise of common stock options 10,000 shares of common stock were issued during the nine months ended September 30, 2017.

The following summarizes the changes in common stock options for the nine months ended September 30, 2017:

	Options			Weighted Average Exercise Price
Outstanding at December 31, 2016		5,169,200		$	0.96
Granted		50,000		$	0.48
Exercised		(10,000	)	$	0.08
Forfeited		(149,850	)	$	0.45
Outstanding at September 30, 2017		5,059,350		$	0.95

Options exercisable at September 30, 2017		1,912,500		$	1.82

The Company recognized stock-based compensation expense related to stock options of $0.1 million and $0.2 million, respectively, for the three and nine months ended September 30, 2017. As of September 30, 2017, there is approximately $0.7 million of unrecognized stock-based compensation expense related to unvested option awards outstanding, which is expected to be recognized over a weighted average period of 3.2 years.

Restricted Stock

Restricted stock awards represent a right to receive shares of common stock at a future date determined in accordance with the participant’s award agreement. There is no exercise price and no monetary payment required for receipt of restricted stock awards or the shares issued in settlement of the award. Instead, consideration is furnished in the form of the participant’s services to the Company. Compensation cost for these awards is based on the fair value on the date of grant and recognized as compensation expense on a straight-line basis over the requisite service period.

The following summarizes the changes in restricted stock awards for the nine months ended September 30, 2017:

	Restricted Stock Awards			Weighted Average Grant Date Fair Value Per Share
Unvested awards at December 31, 2016		37,500		$	0.38
Vested		(37,500	)	$	0.38
Unvested awards at September 30, 2017		—			—

Vested awards at September 30, 2017		262,500		$	0.38

Stock-based compensation expense related to restricted stock awards was not material for the three and nine months ended September 30, 2017 and 2016.