Stockholders' Equity

6 Months Ended

Jun. 30, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity

STOCKHOLDERS’ EQUITY

Warrants

A summary of warrant activity for the six months ended June 30, 2015 is shown as follows:

	Warrants Outstanding		Weighted Average Exercise Price During Period
Outstanding at December 31, 2014	969,549		$	4.61
Exercised	(582,549	)	4.30
Canceled/forfeited	(55,000	)	4.30
Expired	(240,000	)	5.34
Outstanding at June 30, 2015	92,000		$	4.86

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 indicated (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
Cost of sales	$	15	$	4	$	18	$	6
Product development	13		3		16		2
Selling, general, and administrative	144		128		250		250
Total stock-based compensation	$	172	$	135	$	284	$	258

Total unearned stock-based compensation was $1.1 million at June 30, 2015, compared to $494.5 thousand at June 30, 2014. These costs will be charged to expense and amortized on a straight-line basis in subsequent periods. The weighted average period over which the unearned compensation at June 30, 2015 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:

	Six months ended June 30,
	2015			2014
Fair value of options issued	$	4.11		$	3.34
Exercise price	$	5.54		$	4.34
Expected life of option (in years)	5.8 years			5.6 years
Risk-free interest rate	1.7		%	1.8		%
Expected volatility	88.3		%	98.1		%
Dividend yield	0.0		%	0.0		%

A summary of option activity under all plans for the six months ended June 30, 2015 is shown as follows:

	Number of Option		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)
Outstanding at December 31, 2014	459,271		$	8.95
Granted	223,500		5.54
Exercised	(10,393	)	3.71
Canceled/forfeited	(78,008	)	6.02
Expired	(5,900	)	96.00
Outstanding at June 30, 2015	588,470		$	7.26	8.3 years
Vested and expected to vest at June 30, 2015	531,671		$	7.45	8.2 years
Exercisable at June 30, 2015	303,011		$	9.00	7.4 years

Restricted stock units

A summary of restricted stock unit activity under all plans for the six months ended June 30, 2015 is shown as follows:

	Restricted Stock Units		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Life (in years)
Outstanding at December 31, 2014	—		$	—
Granted	62,750		5.50
Canceled/forfeited	(5,500	)	5.47
Outstanding at June 30, 2015	57,250		$	5.51	1.7 years