Quarterly report pursuant to Section 13 or 15(d)

3. Stock-Based Compensation

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3. Stock-Based Compensation
3 Months Ended
Mar. 31, 2015
Stock-based Compensation  
3. Stock-Based Compensation

At March 31, 2015, the Company had the stock-based compensation plans described below.  Total compensation expense related to these plans was $2,871 and $5,254 for the quarters ended March 31, 2015 and 2014, respectively, of which $0 and $564, respectively, related to options awarded to non-employees.  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.

 

There were 20,000 option awards granted to employees and members of the Board of Directors in the three months ended March 31, 2015 and there were no option awards granted to employees and no option awards granted to non-employees in the three months ended March 31, 2014.  The fair values of option awards granted in the three months ended March 31, 2015 were estimated using the Black-Scholes option pricing model using the following assumptions:

 

    2015  
Risk free interest rate     1.61 – 1.97 %
Dividend yield     0 %
Expected term   5-10 years  
Expected volatility     41.2 – 54.2 %

 

The status of the options issued as of March 31, 2015 and changes during the three months ended March 31, 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 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  

 

The following table summarizes information about options at March 31, 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  
  1,283,000     $ 0.26       5.36     $ 42,258       1,059,500     $ 0.28       4.56     $ 30,602  
                                                             

 

Nonvested stock awards as of March 31, 2015 and changes during the three months ended March 31, 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  

 

As of March 31, 2015 and 2014, unrecognized compensation cost associated with non-vested share-based employee and non-employee compensation totaled $6,801 and $11,469, respectively, which are expected to be recognized over weighted average periods of 6 months and 7 months, respectively.