| 3. Stock-Based Compensation |
There were 20,000 option awards granted
to employees and no option awards granted to non-employees in the three months ended September 30, 2014 and 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. There
were 21,000 option awards granted to employees and no option awards granted to non-employees in the nine months ended September
30, 2014 and 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. The fair values of option awards granted in the three months and nine months ended September
30, 2014 and 2013 were estimated using the Black-Scholes option pricing model using the following assumptions:
| |
|
Three Months ended
September 30,
|
|
Nine Months ended
September 30,
|
| |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
| Risk free interest rate |
|
1.78% |
|
1.36% |
|
1.77 - 1.78% |
|
0.70 1.36% |
| Dividend yield |
|
0% |
|
0% |
|
0% |
|
0% |
| Expected term |
|
5 years |
|
5 years |
|
5 years |
|
5 years |
| Expected volatility |
|
43.3% |
|
57.3% |
|
43.3 - 47.3% |
|
57.3 - 62.8% |
The status of the options issued as of
September 30, 2014 and changes during the nine months ended September 30, 2014 and 2013, were as follows:
| |
|
Options outstanding |
|
| |
|
Number of shares
|
|
|
Weighted average price per share |
|
| Balance at December 31, 2013 |
|
|
1,187,000 |
|
|
$ |
0.26 |
|
| Options granted, exercised, expired or forfeited |
|
|
-- |
|
|
|
-- |
|
| Balance at March 31, 2014 |
|
|
1,187,000 |
|
|
$ |
0.26 |
|
| Options granted |
|
|
1,000 |
|
|
|
0.24 |
|
| Options exercised, 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, expired or forfeited |
|
|
-- |
|
|
|
-- |
|
| Balance at September 30, 2014 |
|
|
1,205,000 |
|
|
$ |
0.26 |
|
| |
|
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 |
|
The following table summarizes information
about options at September 30, 2014:
| 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 |
|
| |
1,205,000 |
|
|
$ |
0.26 |
|
|
|
5.58 |
|
|
$ |
11,238 |
|
|
|
955,000 |
|
|
$ |
0.29 |
|
|
|
4.67 |
|
|
$ |
5,989 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested stock awards as of September
30, 2014 and changes during the nine months ended September 30, 2014 were as follows:
| |
|
Nonvested |
|
| |
|
Number of shares |
|
|
Weighted average grant date fair value |
|
| Balance at December 31, 2013 |
|
|
431,250 |
|
|
$ |
0.08 |
|
| Vested |
|
|
(155,000 |
) |
|
|
0.08 |
|
| Balance at March 31, 2014 |
|
|
276,250 |
|
|
$ |
0.08 |
|
| Granted |
|
|
1,000 |
|
|
|
0.10 |
|
| Vested |
|
|
(31,250 |
) |
|
|
0.08 |
|
| Balance at June 30, 2014 |
|
|
246,000 |
|
|
$ |
0.08 |
|
| Granted |
|
|
20,000 |
|
|
|
0.07 |
|
| Vested |
|
|
(16,000 |
) |
|
|
0.08 |
|
| Balance at September 30, 2014 |
|
|
250,000 |
|
|
$ |
0.08 |
|
As of September 30, 2014 and 2013, unrecognized
compensation cost associated with non-vested share-based employee and non-employee compensation totaled $6,156 and $8,806, respectively,
which are expected to be recognized over weighted average periods of seven months and five months, respectively.
|