Equity-Based Compensation

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity-Based Compensation

Equity-Based Compensation

The fair value of each option and equity warrant award is estimated on the date of grant using a Black-Scholes-Merton option pricing valuation model. Expected volatility is based on the historical volatility of the price of the Company’s stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option and equity warrant. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. There were no options or equity warrants granted in the three months ended March 31, 2015 and 2014.

Stock option for employees' activity during the three months ended March 31, 2015 is as follows:

Stock option activity for employees:

	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding January 1, 2015	11,287,888	$	1.64	4.61	$	—
Granted	—	—		—	—
Forfeited	—	—		—	—
Outstanding March 31, 2015	11,287,888	$	1.64	4.36	$	—
Vested and expected to vest March 31, 2015	11,287,888	$	1.64	4.36	$	—
Exercisable March 31, 2015	10,893,365	$	1.63	4.06	$	—

Unvested stock option activity for employees:

	Number of Options		Weighted Average Exercise  Price		Average  Remaining Contractual  Term  (Years)	Aggregate  Intrinsic Value
Outstanding January 1, 2015	710,594		$	1.38	8.76	$	—
Granted	—		—		—	—
Vested	(316,071	)	0.97			—
Forfeited	—		—		—	—
Outstanding March 31, 2015	394,523		$	1.71	7.87	$	—

Stock option activity for non-employees:

	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding January 1, 2015	3,800,000	$	1.36	4.75	$	—
Granted	—	—		—	—
Exercised	—	—		—	—
Forfeited	—	—		—	—
Outstanding March 31, 2015	3,800,000	$	1.36	4.50	$	—
Vested and expected to vest March 31, 2015	3,800,000	$	1.36	4.50	$	—
Exercisable March 31, 2015	3,779,167	$	1.35	4.15	$	—

Unvested stock option activity for non-employees during the year:

	Number of Options		Weighted Average Exercise  Price		Weighted  Average Remaining  Contractual Term  (Years)	Aggregate  Intrinsic Value
Outstanding January 1, 2015	33,333		$	2.60	9.08	$	—
Options granted	—		—		—	—
Options vested	(12,500	)	2.60			—
Options forfeited	—		—		—	—
Outstanding March 31, 2015	20,833		$	2.60	8.83	$	—

The impact on the Company’s results of operations of recording equity-based compensation for the three months ended March 31, 2015 and 2014 was to increase general and administrative expenses by approximately $58,000 and $88,000, respectively, which had no impact on earnings per share.

As of March 31, 2015 and 2014, respectively, there was $200,000 and $261,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.