STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2017

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

[1]            Stock option plans: The Company currently has two non-statutory stock option plans, the Fiscal 2001 Non-statutory Stock Option Plan (the “2001 Plan”) and the 2013 Equity Compensation Plan (the “2013 Plan”). Both plans have been adopted by our Board of Directors and approved by our shareholders. Both the 2001 Plan and the 2013 Plan have options available for future issuance. Any common shares issued as a result of the exercise of stock options would be new common shares issued from our authorized issued shares.

[2]           Stock options: During Fiscal 2017, the Company issued options to purchase 40,000 shares of common stock and, in Fiscal 2016, the Company issued options to purchase 830,000 shares of common stock. Option issues in Fiscal 2017 were all issued under the 2001 Plan and were issued to two non-employee members of our board of directors. Options issued in Fiscal 2016 were all issued under the 2001 Plan; 80,000 options were issued to non-employee members of our board of directors and 750,000 options were issued to our Chief Executive Officer, Melissa Waterhouse.

As of December 31, 2017, there were 2,147,000 options issued and outstanding under the 2001 Plan. There were no options issued under the 2013 Plan, making the total issued and outstanding options 2,147,000 as of December 31, 2017. Of the total options issued and outstanding, 1,647,000 were fully vested as of December 31, 2017. As of December 31, 2017, there were 1,570,000 options available for issuance under the 2001 Plan and 4,000,000 options available under the 2013 Plan.

Stock option activity for Fiscal 2017 and Fiscal 2016 is summarized as follows: (the figures contained within the tables below have been rounded to the nearest thousand)

	Year Ended December 31,2017						Year Ended December 31, 2016
	Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of December 31, 2017		Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value as of December 31, 2016
Options outstanding at beginning of year		2,107,000	$	0.13				1,435,000		$	0.14
Granted		40,000	$	0.13				830,000		$	0.11
Exercised		0	NA					0		NA
Cancelled/expired		0	NA					(158,000	)	$	0.17
Options outstanding at end of year		2,147,000	$	0.13	$	10,000		2,107,000		$	0.13	$	15,000
Options exercisable at end of year		1,647,000	$	0.13				1,109,000		$	0.14

The following table presents information relating to stock options outstanding as of December 31, 2017:

		Options Outstanding						Options Exercisable
				Weighted		Weighted				Weighted
				Average		Average				Average
Range of Exercise				Exercise		Remaining				Exercise
Price		Shares		Price		Life in Years		Shares		Price
$	0.07 - $0.11		955,000	$	0.1		6.97		580,000	$	0.1
$	0.12 - $0.15		815,000	$	0.13		6.78		690,000	$	0.13
$	0.16 - $0.26		377,000	$	0.19		4.3		377,000	$	0.19
			2,147,000		0.13		6.43		1,647,000		0.13
	TOTAL

The following table summarizes weighted-average assumptions using the Black-Scholes option-pricing model used on the date of the grants issued during Fiscal 2017 and Fiscal 2016:

	Year Ended December 31
	2017	2016
Volatility	81%	62%-66%
Expected term (years)	10 years	10 years
Risk-free interest rate	2.16%	1.57%-1.94%
Dividend yield	0%	0%

The Company recognized $43,000 in share based payment expense related to stock options in Fiscal 2017 and $61,000 in share based payment expense related to stock options in Fiscal 2016. As of December 31, 2017, there was approximately $6,000 of total unrecognized share based payment expense related to stock options. This cost is expected to be recognized over 5 months.

[3]       Warrants:

Warrant activity for Fiscal 2017 and Fiscal 2016 is summarized as follows. Any common shares issued as a result of the exercise of warrants would be new common shares issued from our authorized issued shares.

	Year Ended December 31,2017								Year Ended December 31, 2016
	Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of December 31, 2017	Shares				Weighted Average Exercise Price		Aggregate Intrinsic Value as of December 31, 2016
Warrants outstanding at beginning of year		2,060,000	$	0.18			2,385,000			$	0.16
Granted		0	NA				0			NA
Exercised		0	NA				0			NA
Cancelled/expired		0	NA				(325,000	)		$	0.14
Warrants outstanding at end of year		2,060,000	$	0.18	None		2,060,000			$	0.18	None
Warrants exercisable at end of year		2,060,000	$	0.18			2,060,000			$	0.18

The Company recognized $0 in debt issuance and deferred finance costs related to the issuance of these warrants outstanding in Fiscal 2017 and Fiscal 2016 due to accelerated amortization of expense in the second quarter of Fiscal 2015 (as a result of early termination of the Imperium line of credit). As of December 31, 2017, there was $0 of total unrecognized debt issuance costs associated with the issuance of the above warrants outstanding.