STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2015

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

Preferred Stock

The Company has 2,000,000 authorized preferred shares of which none were issued and outstanding at December 31, 2015 and 2014.

Common Stock, Options and Stock Grants

Year Ended December 31, 2015

During the year ended December 31, 2015, 135,136 restricted common shares were granted to Directors with an aggregate grant date fair value of approximately $100,000.  During the year ended December 31, 2015, approximately 108,064 restricted common shares with an aggregate grant date fair value of approximately $87,000 vested.

During the year ended December 31, 2015, the Company issued 111,602 shares of restricted common stock pursuant to the Company’s Directors’ Deferred Compensation Plan dated January 1, 2008.  These shares were issued to settle approximately $103,175 of accrued directors’ fees to two former directors for past services.

During the year ended December 31, 2015, 90,000 options were awarded to an officer. These options vest over three years with one-third vesting at the end of each of the three years. These options expire after a five year term.  The Company estimated the grant date fair value of the stock options using the Black-Scholes-Merton option model and the following assumptions:  volatility of 90%, risk free rate of 0.89%, dividend rate of zero, and expected term of 3.75 years.  The grant date fair value of the stock options issued was determined to be approximately $44,100.  During the year ended December 31, 2015, the Company recognized approximately $126,000 of expense related to the vesting of outstanding stock options.  For the year ended December 31, 2015, options to acquire 20,980 shares of common stock with a weighted average exercise price of $1.16 expired unexercised, and options to acquire 18,020 shares of common stock with a weighted average exercise price of $1.34 were forfeited.

Year Ended December 31, 2014

During the year ended December 31, 2014, 114,058 restricted common shares were granted to Directors with an aggregate grant date fair value of approximately $115,000.  During the year ended December 31, 2014, approximately 71,950 restricted common shares with an aggregate grant date fair value of approximately $66,872 vested and 40,398 restricted common shares with an aggregate grant date fair value of approximately $43,332 were forfeited.

During the year ended December 31, 2014, the Company granted, to an employee of the Company, an option to acquire 10,000 shares of common stock with an exercise price of $1.50, exercisable over a term of five years from the date of grant. The options vest over a four year period, with 25% vesting on the first anniversary of the grant date and the remaining 75% vesting in equal monthly amounts through the fourth anniversary of the grant date. The grant date fair value of the stock options issued was determined to be approximately $7,500. During the year ended December 31, 2014, the Company recognized approximately $112,000 of expense related to the vesting of outstanding stock options. For the year ended December 31, 2014, options to acquire 97,157 shares of common stock with a weighted average exercise price of $1.18 expired unexercised, and options to acquire 163,878 shares of common stock with a weighted average exercise price of $1.43 were forfeited.

Stock Option Plans

The Company has granted options under multiple stock-based compensation plans that do not differ substantially in the characteristics of the awards.  Nonqualified and incentive stock options have been granted to directors, officers and employees of the Company under the Company’s stock option plans.  Options generally vest over three to four years and expire five years from the date of the grant.  On June 3, 2014, the Company’s stockholders approved the adoption of the 2014 Stock Incentive Plan (the “2014 Plan”).  The 2014 Plan replaces the 2004 Stock Option/Stock Issuance Plan which expired on August 20, 2014.  The 2014 Plan provides for the grant of non-qualified stock options, incentive stock options, and stock appreciation rights, shares of restricted stock, stock units and shares of unrestricted stock.  Eligible participants include officers, employees and directors.  The aggregate number of shares authorized for issuance under the 2014 Plan is 1,200,000, and is subject to adjustment as described in the 2014 Plan.  There are 848,740 shares available for issue under the 2014 plan.  Awards that expire or are cancelled without delivery of shares generally become available for issuance under the plans.

The following is a summary of stock option activity for the year ended December 31, 2015, relating to all of the Company’s common stock option plans (share amounts are in thousands):

	Shares (in thousands)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2015		549		$	1.30		2.72	$	--
Granted		90		$	0.90		--	$	--
Expired		(21	)	$	1.16		--	$	--
Forfeited		(18	)	$	1.34		--	$	--
Outstanding at December 31, 2015		600		$	1.24		2.10	$	--
Exercisable at December 31, 2015		414		$	1.25		1.49	$	--

The fair values of the stock options granted were estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses the following weighted-average assumptions for the years ended December 31, 2015 and 2014:

	2015	2014
Expected term	3.75 years	3.75 years
Expected volatility	90%	95%
Expected dividend yield	--	--
Risk-free interest rate	0.9%	0.8%

The following table summarizes stock option information as of December 31, 2015:

				Weighted Average
		Number Outstanding		Remaining	Options Exercisable
Exercise Prices		(in thousands)		Contractual Life	(in thousands)
$	0.90		90	4.25 years		--
$	1.15		310	1.13 years		300
$	1.20		20	0.48 years		20
$	1.50		80	2.97 years		40
$	1.65		100	2.79 years		54
Total			600	2.10 years		414

As of December 31, 2015, there was approximately $106,000 of unrecognized compensation costs related to stock options outstanding that will be recognized as expense over a weighted average period of 2.17 years.

Restricted Stock Grant

A summary of activity related to the Company’s non-vested stock grants for the year ended December 31, 2015 is presented below:

Non-Vested Shares	Shares (in thousands)			Weighted-Average Grant Date Fair Value
Non-Vested at January 1, 2015		51		$	0.89
Granted		135		$	0.74
Vested		(108	)	$	0.81
Non-Vested at December 31, 2015		78		$	0.74

The future expected expense for non-vested shares is approximately $57,000 and will be recognized on a straight-line basis over the period from January 1, 2016 through December 31, 2016.