Note 5 – Stock-based compensation
 

The Company recorded approximately $738,000 and $2,049,000 of stock-based compensation related to employee and non-employee stock options for the three and nine months ended September 30, 2015 and $5,000 and $25,000 for the three and nine months ended September 30, 2014, respectively. As of September 30, 2015, there was $3,111,000 of unrecognized compensation cost related to outstanding options that is expected to be recognized as a component of the Company’s operating expenses over a weighted average period of 3.2 years.

On June 29, 2015, the shareholders adopted the 2015 Equity Incentive Plan.  The Plan provides for the grant of incentive stock options, qualified stock options, restricted stock awards, restricted stock units, stock appreciation rights, and performance shares or units and cash awards.  Awards may be granted under the Plan to Company employees, directors and independent contractors.   The Company will no longer be issuing shares under the 2007 Equity Incentive Plan.

As of September 30, 2015, there were 24,613,880 shares subject to outstanding common stock options granted under the 2007 and 2015 plans and 77,687,135 shares available for future grants. The administrator of the plan determines the times when an option may become exercisable at the time of grant. Vesting periods of options granted to date have not exceeded five years.  The options generally will expire, unless previously exercised, no later than ten years from the grant date. The Company is using unissued shares for all shares issued for options

The following schedule presents activity in the Company’s outstanding stock options for the nine months ended September 30, 2015 (in thousands, except per share amounts): 

As of September 30, 2015 options to purchase 24,613,880 shares of common stock, with an aggregate intrinsic value of $8,234,000, were outstanding that were fully vested or expected to vest with a weighted average remaining contractual term of 5.2 years. As of September 30, 2015, options to purchase 19,917,064 shares of common stock, with an aggregate intrinsic value of $8,897,000, were exercisable with a weighted-average exercise price of $0.19 per share and a weighted-average remaining contractual term of 4.3 years. The aggregate intrinsic value of outstanding and exercisable options at September 30, 2015 was calculated based on the closing price of the Company’s common stock as reported on the OTCQB markets on September 30, 2015 of $0.64 per share less the exercise price of the options. The aggregate intrinsic value is calculated based on the positive difference between the closing fair market value of the Company’s common stock and the exercise price of the underlying options.