STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2016

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

Preferred Stock

The Company is authorized to issue 2,000,000 shares of preferred stock, of which none were issued and outstanding as of September 30, 2016 and December 31, 2015.

Common Stock, Options and Stock Grants

Nine Months Ended September 30, 2016

During the nine months ended September 30, 2016, 162,000 restricted common shares were granted with an aggregate grant date fair value of approximately $100,000. During the nine months ended September 30, 2016, approximately 121,000 restricted common shares with an aggregate grant date fair value of approximately $82,000 vested. During the nine months ended September 30, 2016, the Company recognized approximately $30,000 of stock based compensation expense related to the expected vesting of stock options.

Nine Months Ended September 30, 2015

During the nine months ended September 30, 2015, 135,000 restricted common shares were granted with an aggregate grant date fair value of approximately $100,000. During this time, approximately 81,000 restricted common shares with an aggregate grant date fair value of approximately $65,000 vested. During the nine months ended September 30, 2015, the Company issued 111,602 shares of restricted common stock pursuant to the Company’s Directors’ Deferred Compensation Plan dated January 1, 2008 (the “Directors’ Deferred Compensation Plan”). These shares were issued to settle approximately $103,175 of accrued directors’ fees to two former directors for past services. During the nine months ended September 30, 2015, the Company recognized $92,000 of stock based compensation expense related to the expected vesting of 124,000 options. Outstanding 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. In March 2015, 90,000 options were awarded to employees. These options vest over three years with 33% vesting at the end of each of the three years. These options expire after a five-year term.

The Company estimates the grant date fair value of the stock option 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.

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. As of September 30, 2016, 622,808 shares were available for issuance 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 nine months ended September 30, 2016, relating to all of the Company’s common stock plans:

	Shares			Weighted Average Exercise		Weighted AverageRemaining Contractual Term	Weighted Average	Aggregate Intrinsic Value
	(in thousands)			Price		(in years)		(in thousands)
Outstanding at January 1, 2016		600		$	1.24		2.10	$	--
Expired		(20	)	$	1.20		--	$	--
Forfeited…………………………		(100	)	$	1.65		--	$	--
Outstanding at September 30, 2016		480		$	1.16		1.27	$	--
Exercisable at September 30, 2016		395		$	1.18		0.61	$	--

The following table summarizes stock option information as of September 30, 2016:

				Weighted Average
		Number Outstanding		Remaining	Options Exercisable
Exercise Prices		(in thousands)		Contractual Term	(in thousands)
$	0.90		90	3.5 years		30
$	1.15		310	0.4 years		310
$	1.50		80	2.2 years		55
	Total		480	1.27 years		395

As of September 30, 2016, there was approximately $38,000 of unrecognized compensation costs related to stock options outstanding.

Restricted Stock Grants

A summary of the status of the Company’s non-vested stock grants as of September 30, 2016 and changes during the nine months then ended is presented below:

Non-Vested Shares	Shares (in thousands)			Weighted-Average Grant Date Fair Value
Non-vested at January 1, 2016		78		$	0.74
Granted		161		$	0.62
Vested		(121	)	$	0.68
Non-vested at September 30, 2016		118		$	0.64

The future expected expense as of September 30, 2016 for non-vested shares is approximately $75,000 and will be recognized as expense through December 31, 2017.