Stock Options and Stock Grants

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock Options and Stock Grants

(11) Stock Options and Stock Grants

We have entered into stock option agreements with certain officers, employees and directors. The stock options granted prior to the adoption of the 2019 Equity Compensation Plan (the “2019 Plan”) on November 19, 2020 generally expire ten years from the date of grant. Future options to be granted under the 2019 Plan will expire seven years from the date of grant.

Employee Stock Options

We follow ASC Topic 718, Share-Based Payments, in which compensation expense is recognized only for share-based payments expected to vest. We recognized compensation expense related to stock options of $242 and $204 for the years ended December 31, 2019 and 2018, respectively.

As of December 31, 2019, there was approximately $352 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under our stock option plans. That cost is expected to be recognized over a remaining weighted-average period of 1.9 years.

The following table illustrates the various assumptions used to calculate the Black-Scholes option pricing model for options granted for all years presented:

	Years Ended December 31,
	2019			2018
Weighted-average risk-free interest rates:		2.3	%		2.9	%
Dividend yield:		0.00	%		0.00	%
Weighted-average expected life of the option:	6 years			6 years
Weighted-average expected stock price volatility:		94	%		94	%
Weighted-average fair value of the options granted:	$	0.41		$	0.64

We use the Black−Scholes option pricing model to determine the fair value of stock-based compensation. The Black−Scholes model requires us to make several assumptions, including the estimated length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of our common stock price over the expected term and estimated forfeitures. Expected price volatility of the fiscal 2019 and 2018 grants is based on the daily market rate changes of our stock going back to January 1, 2012. The shares granted in fiscal 2019 and 2018 had a vesting period of three years and a contractual life of 10 years. Forfeitures were estimated at 2% for the years ended December 31, 2019 and 2018, based on our historical experience. The Black−Scholes model also requires a risk-free interest rate, which is based on the U.S. Treasury yield curve in effect at the time of the grant, and the dividend yield on our common stock, which is assumed to be zero since we do not pay dividends and have no current plans to do so in the future. Changes in these assumptions can materially affect the estimate of fair value of stock-based compensation and consequently, the related expense recognized on the statement of operations. We recognize stock-based compensation expense on a straight-line basis.

The following table summarizes the option activity for our employees and directors during the year ended December 31, 2019:

						Weighted
				Weighted		Average
				Average		Remaining
				Exercise Price		Contractual		Aggregate
	Shares			per		Term		Intrinsic
Options	(Rounded)			Share		(Years)		Value (000s)
Outstanding on January 1, 2019		3,415,000		$	0.67
Granted		563,000		$	0.51
Exercised		(36,000	)	$	0.44
Forfeited or expired		(262,000	)	$	0.81
Outstanding on December 31, 2019		3,680,000		$	0.64		5.5	$	—
Exercisable on December 31, 2019		2,690,000		$	0.64		4.4	$	—
Shares available for grant		3,000,000

The aggregate intrinsic value in the table above is based on our closing stock price of $0.28 on the last business day for the year ended December 31, 2019.

During the years ended December 31, 2019 and 2018, the total intrinsic value of our stock options exercised was $2 and $25, respectively. Cash received for option exercises was $14 and $29 during the years ended December 31, 2019 and 2018, respectively. We had approximately 36,000 options exercised during the year ended December 31, 2019, compared to 64,000 in 2018. Based on our election of the “with and without” approach, no realized tax benefits from stock options were recognized for the years ended December 31, 2019 and 2018.