Stockholders' Equity

3 Months Ended

Mar. 31, 2017

Stockholders' Equity Note [Abstract]

Stockholders' Equity

STOCKHOLDERS’ EQUITY

Warrants

A summary of warrant activity for the three months ended March 31, 2017 is presented as follows:

	Warrants Outstanding		Weighted Average Exercise Price During Period
Balance at December 31, 2016	6,750		$	4.30
Exercised	—		—
Canceled/forfeited	(6,750	)	4.30
Expired	—		—
Balance at March 31, 2017	—		$	4.30

Stock-based compensation

Stock-based compensation expense is attributable to stock options and restricted stock unit awards. For all stock-based awards, we recognize expense using a straight-line amortization method.

The following table summarizes stock-based compensation expense and the impact it had on operations for the periods presented (in thousands):

	Three months ended March 31,
	2017		2016
Cost of sales	$	18	$	14
Product development	13		16
Selling, general, and administrative	176		226
Total stock-based compensation	$	207	$	256

The table above excludes $0.3 million in stock-based compensation expense from prior periods that was reversed and included as a reduction to restructuring expenses due to the workforce reduction associated with our restructuring actions in the first quarter of 2017.

Total unearned stock-based compensation was $1.1 million at March 31, 2017, compared to $2.2 million at March 31, 2016. These costs will be charged to expense and amortized on a straight-line basis in future periods. The weighted average period over which the unearned compensation at March 31, 2017 is expected to be recognized is approximately 2.3 years.

Stock options

The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model. Estimates utilized in the calculation include the expected life of the option, risk-free interest rate, and expected volatility, and are further comparatively detailed as follows:

	Three months ended March 31,
	2017			2016
Fair value of options issued	$	2.79		$	5.59
Exercise price	$	3.71		$	7.42
Expected life of options (in years)	5.8			5.8
Risk-free interest rate	2.1		%	1.6		%
Expected volatility	92.2		%	93.3		%
Dividend yield	0.0		%	0.0		%

A summary of option activity under all plans for the three months ended March 31, 2017 is presented as follows:

	Number of Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)
Balance at December 31, 2016	530,734		$	7.48
Granted	151,963		3.71
Exercised	(33,300	)	2.30
Canceled/forfeited	(169,995	)	6.05
Expired	—		—
Balance at March 31, 2017	479,402		$	7.15	6.9
Vested and expected to vest at March 31, 2017	451,173		$	7.37	6.7
Exercisable at March 31, 2017	359,116		$	8.24	5.9

Restricted stock units

A summary of restricted stock unit activity under all plans for the three months ended March 31, 2017 is presented as follows:

	Restricted Stock Units		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Life (in years)
Balance at December 31, 2016	250,115		$	6.34
Granted	252,802		3.48
Released	(42,620	)	6.00
Canceled/forfeited	(123,937	)	6.30
Balance at March 31, 2017	336,360		$	4.24	3.3