During the three months ended March 31, 2017, the Company had two shareholder–approved stock-based compensation plans. The 2006 Stock Incentive Plan was adopted in 2006 (“2006 Plan”) and had options granted under it through April 12, 2016. On June 1, 2016, the shareholders ratified the IAI 2016 Stock Incentive Plan (“2016 Plan”), which had been approved by the Board of Directors on April 4, 2016.

2016 Stock Incentive Plan

The 2016 Plan became effective June 1, 2016, and expires April 4, 2026. The 2016 Plan provides for the granting of equity awards to key employees, including officers and directors. Options under the 2016 Plan are generally granted at-the-money or above, expire no later than ten years from the date of grant or within three months of when employment ceases, whichever comes first, and vest over periods determined by the Board of Directors. The number of shares subject to options available for issuance under the 2016 Plan cannot exceed 1,000,000. At March 31, 2017, there were no options yet issued under the 2016 Plan.

2006 Stock Incentive Plan

The 2006 Plan became effective May 18, 2006, and expired April 12, 2016. The 2006 Plan provides for the granting of equity awards to key employees, including officers and directors. Options under the 2016 Plan were generally granted at-the-money or above, expire no later than ten years from the date of grant or within three months of when employment ceases, whichever comes first, and vest over periods determined by the Board of Directors. The number of shares subject to options available for issuance under the 2006 Plan could not exceed 1,950,000. There were 1,289,500 and 1,240,000 unexpired options remaining from the 2006 Plan at March 31, 2017 and 2016, respectively.

The Company estimates the fair value of options granted using a Black-Scholes valuation model to establish the expense. When stock-based compensation is awarded to employees, the expense is recognized ratably over the vesting period. When stock-based compensation is awarded to non-employees, the expense is recognized over the period of performance. The fair values of option awards granted in the three months ended March 31, 2017 and 2016, were estimated using the Black-Scholes option pricing model using the following assumptions:

A summary of the activity under the stock incentive plans as of March 31, 2017, and changes during the quarter then ended is presented below.

There were no options granted during the three months ended March 31, 2017, and the weighted-average grant date fair value of options granted during the three months ended March 31, 2016, was $0.04. There were no options exercised during the three months ended March 31, 2017 and 2016. As of March 31, 2017, there was $250 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the stock incentive plans; that cost is expected to be recognized over a weighted-average period of four months.

Total compensation expense related to these plans was $259 and $666 for the quarters ended March 31, 2017 and 2016, respectively, none of which related to options awarded to non-employees. Compensation expense relating to prior periods of $612 were reversed in the quarter ended March 31, 2017, from options that were forfeited prior to vesting.

Nonvested option awards as of March 31, 2017 and changes during the three months ended March 31, 2017 were as follows: