| 3. Stock-Based Compensation |
There were 32,000 option awards granted
to employees and no option awards granted to non-employees in the three months ended September 30, 2013 and there were no option
awards granted to employees and no option awards granted to non-employees in the three months ended September 30, 2012. There were
212,000 option awards granted to employees and no option awards granted to non-employees in the nine months ended September 30,
2013 and there were 102,500 option awards granted to employees and 5,000 option awards granted to non-employees in the nine months
ended September 30, 2012. The fair values of option awards granted in the three months and nine months ended September 30, 2013
and 2012 were estimated using the Black-Scholes option pricing model using the following assumptions:
| |
|
Three Months ended
September 30,
|
|
|
Nine Months ended
September 30,
|
|
| |
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
| Risk free interest rate |
|
|
1.36 |
% |
|
|
n/a |
|
|
|
0.70 1.36 |
% |
|
|
0.75 2.31 |
% |
| Dividend yield |
|
|
0 |
% |
|
|
n/a |
|
|
|
0 |
% |
|
|
0 |
% |
| Expected term |
|
5 years |
|
|
|
n/a |
|
|
5 years |
|
|
5-10 years |
|
| Expected volatility |
|
|
57.3 |
% |
|
|
n/a |
|
|
|
57.3 - 62.8 |
% |
|
|
62.8 67.9 |
% |
The status of the options issued as of
September 30, 2013 and changes during the nine months ended September 30, 2013 and 2012 were as follows:
| |
|
Options outstanding |
|
| |
|
Number of
shares
|
|
|
Weighted average price per share |
|
| Balance at December 31, 2012 |
|
|
1,032,500 |
|
|
$ |
0.29 |
|
| Options granted |
|
|
160,000 |
|
|
|
0.16 |
|
| Options exercised, expired or forfeited |
|
|
(10,000 |
) |
|
|
0.15 |
|
| Balance at March 31, 2013 |
|
|
1,182,500 |
|
|
$ |
0.28 |
|
| Options granted |
|
|
20,000 |
|
|
|
0.18 |
|
| Options exercised, expired or forfeited |
|
|
(226,000 |
) |
|
|
0.22 |
|
| Balance at June 30, 2013 |
|
|
976,500 |
|
|
$ |
0.29 |
|
| Options granted |
|
|
32,000 |
|
|
|
0.16 |
|
| Options exercised, expired or forfeited |
|
|
(7,500 |
) |
|
|
0.19 |
|
| Balance at September 30, 2013 |
|
|
1,001,000 |
|
|
$ |
0.29 |
|
| |
|
Options outstanding |
|
| |
|
Number of
shares
|
|
|
Weighted average price per share |
|
| Balance at December 31, 2011 |
|
|
1,003,000 |
|
|
$ |
0.31 |
|
| Options granted |
|
|
65,000 |
|
|
|
0.15 |
|
| Options exercised, expired or forfeited |
|
|
(28,000 |
) |
|
|
0.36 |
|
| Balance at March 31, 2012 |
|
|
1,040,000 |
|
|
$ |
0.30 |
|
| Options granted |
|
|
42,500 |
|
|
|
0.15 |
|
| Options exercised |
|
|
(5,000 |
) |
|
|
0.07 |
|
| Options expired or forfeited |
|
|
(20,000 |
) |
|
|
0.20 |
|
| Balance at June 30, 2012 |
|
|
1,057,500 |
|
|
$ |
0.29 |
|
| Options exercised, expired or forfeited |
|
|
(27,000 |
) |
|
|
0.30 |
|
| Balance at September 30, 2012 |
|
|
1,030,500 |
|
|
$ |
0.29 |
|
The following table summarizes information
about options at September 30, 2013:
| 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
|
|
| |
1,001,000 |
|
|
$ |
0.29 |
|
|
|
5.73 |
|
|
$ |
3,148 |
|
|
|
765,750 |
|
|
$ |
0.32 |
|
|
|
4.61 |
|
|
$ |
2,708 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested stock awards as of September
30, 2013 and changes during the nine months ended September 30, 2013 were as follows:
| |
|
Nonvested |
|
| |
|
Number of
shares
|
|
|
Weighted average grant date fair value |
|
| Balance at December 31, 2012 |
|
|
112,250 |
|
|
$ |
0.08 |
|
| Granted |
|
|
160,000 |
|
|
|
0.08 |
|
| Vested |
|
|
(50,000 |
) |
|
|
0.08 |
|
| Balance at March 31, 2013 |
|
|
222,250 |
|
|
$ |
0.08 |
|
| Granted |
|
|
20,000 |
|
|
|
0.09 |
|
| Vested |
|
|
(39,000 |
) |
|
|
0.08 |
|
| Balance at June 30, 2013 |
|
|
203,250 |
|
|
$ |
0.08 |
|
| Granted |
|
|
32,000 |
|
|
|
0.08 |
|
| Balance at September 30, 2013 |
|
|
235,250 |
|
|
$ |
0.08 |
|
As of September 30, 2013 and 2012, unrecognized
compensation cost associated with non-vested share-based employee and non-employee compensation totaled $8,806 and $4,765, respectively,
which are expected to be recognized over weighted average periods of 5 months and 6 months, respectively.
|