| 3. Stock-Based Compensation |
At September 30, 2015, the Company had two stock-based
compensation plans described in Note 9 of the Annual Report. Total compensation expense related to these plans was $2,112
and $3,262 for the quarters ended September 30, 2015 and 2014, respectively, none of which related to options awarded to non-employees. Total
compensation expense related to these plans was $7,826 and $12,067 for the nine months ended September 30, 2015 and 2014, 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 and nine months ended September 30, 2015 and 2014, were estimated using the Black-Scholes
option pricing model using the following assumptions:
| |
|
Three Months ended
September 30,
|
|
Nine Months ended
September 30,
|
| |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| Risk free interest rate |
|
n/a |
|
1.78% |
|
1.61 - 1.97% |
|
1.77-1.78% |
| Dividend yield |
|
n/a |
|
0% |
|
0% |
|
0% |
| Expected term |
|
n/a |
|
5 years |
|
5-10 years |
|
5 years |
| Expected volatility |
|
n/a |
|
43.3% |
|
41.2 - 54.2% |
|
43.3 - 47.3% |
The status of the options issued as of September 30, 2015 and changes
during the nine months ended September 30, 2015 and 2014 were as follows:
| |
|
Options outstanding |
|
| |
|
Number of shares
|
|
|
Weighted average exercise price per share |
|
| Balance at December 31, 2014 |
|
|
1,264,000 |
|
|
$ |
0.26 |
|
| Options granted |
|
|
20,000 |
|
|
|
0.20 |
|
| Options exercised |
|
|
-- |
|
|
|
-- |
|
| Options expired or forfeited |
|
|
(1,000 |
) |
|
|
0.24 |
|
| Balance at March 31, 2015 |
|
|
1,283,000 |
|
|
$ |
0.26 |
|
| Options granted |
|
|
-- |
|
|
|
-- |
|
| Options exercised |
|
|
-- |
|
|
|
-- |
|
| Options expired or forfeited |
|
|
(5,000 |
) |
|
|
0.52 |
|
| Balance at June 30, 2015 |
|
|
1,278,000 |
|
|
$ |
0.25 |
|
| Options granted |
|
|
-- |
|
|
|
-- |
|
| Options exercised |
|
|
-- |
|
|
|
-- |
|
| Options expired or forfeited |
|
|
(10,000 |
) |
|
|
0.38 |
|
| Balance at September 30, 2015 |
|
|
1,268,000 |
|
|
$ |
0.25 |
|
| |
|
Options outstanding |
|
| |
|
Number of shares
|
|
|
Weighted average exercise price per share |
|
| Balance at December 31, 2013 |
|
|
1,187,000 |
|
|
$ |
0.26 |
|
| Options granted |
|
|
-- |
|
|
|
-- |
|
| Options exercised |
|
|
-- |
|
|
|
-- |
|
| Options expired or forfeited |
|
|
-- |
|
|
|
-- |
|
| Balance at March 31, 2014 |
|
|
1,187,000 |
|
|
$ |
0.26 |
|
| Options granted |
|
|
1,000 |
|
|
|
0.24 |
|
| Options exercised |
|
|
-- |
|
|
|
-- |
|
| Options expired or forfeited |
|
|
(3,000 |
) |
|
|
0.11 |
|
| Balance at June 30, 2014 |
|
|
1,185,000 |
|
|
$ |
0.26 |
|
| Options granted |
|
|
20,000 |
|
|
|
0.17 |
|
| Options exercised |
|
|
-- |
|
|
|
-- |
|
| Options expired or forfeited |
|
|
-- |
|
|
|
-- |
|
| Balance at September 30, 2014 |
|
|
1,205,000 |
|
|
$ |
0.26 |
|
The following table summarizes information about
options at September 30, 2015:
| Options outstanding |
|
|
Options exercisable |
|
| Total shares |
|
|
Weighted average exercise price |
|
|
Weighted average remaining contractual life in years |
|
|
Aggregate intrinsic value |
|
|
Total shares |
|
|
Weighted average exercise price |
|
|
Weighted average remaining contractual life in years |
|
|
Aggregate intrinsic value |
|
| |
1,268,000 |
|
|
$ |
0.25 |
|
|
|
4.92 |
|
|
$ |
11,968 |
|
|
|
1,090,500 |
|
|
$ |
0.27 |
|
|
|
4.33 |
|
|
$ |
8,776 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested stock awards as of September 30, 2015
and changes during the nine months ended September 30, 2015 were as follows:
| |
|
Nonvested |
|
| |
|
Number of shares |
|
|
Weighted average grant date fair value |
|
| Balance at December 31, 2014 |
|
|
209,500 |
|
|
$ |
0.07 |
|
| Granted |
|
|
20,000 |
|
|
|
0.11 |
|
| Vested |
|
|
(5,000 |
) |
|
|
0.08 |
|
| Expired before vesting |
|
|
(1,000 |
) |
|
|
0.10 |
|
| Balance at March 31, 2015 |
|
|
223,500 |
|
|
$ |
0.08 |
|
| Granted |
|
|
-- |
|
|
|
-- |
|
| Vested |
|
|
(10,000 |
) |
|
|
0.09 |
|
| Expired before vesting |
|
|
-- |
|
|
|
-- |
|
| Balance at June 30, 2015 |
|
|
213,500 |
|
|
$ |
0.07 |
|
| Granted |
|
|
-- |
|
|
|
-- |
|
| Vested |
|
|
(36,000 |
) |
|
|
0.09 |
|
| Expired before vesting |
|
|
-- |
|
|
|
-- |
|
| Balance at September 30, 2015 |
|
|
177,500 |
|
|
$ |
0.07 |
|
As of September 30, 2015 and 2014, unrecognized
compensation cost associated with non-vested share-based compensation totaled $1,846 and $6,156, respectively, which are expected
to be recognized over weighted average periods of six months and seven months, respectively.
|