STOCK OPTIONS

12 Months Ended

Dec. 31, 2012

Stock Option [Abstract]

Stock Option [Text Block]

NOTE 8:  STOCK OPTIONS

The Company has a 1995 Incentive Stock Option Plan for U.S. employees (the “1995 Plan”), which provide for the issuance of stock options to employees and outside consultants of the Company to purchase shares of Common Stock. As of the date of this report, no shares are available for issuance under the 1995 Plan. The Company does not contemplate any future issuances or activity with respect to the 1995 Plan.

The Company maintains a 2009 Long Term Incentive Compensation Plan (the “2009 Plan”), which provide for the issuance of stock options to employees and outside consultants of the Company to purchase shares of Common Stock. As of the date of this report, 2,000,000 shares were authorized for issuance under the 2009 Plan.  Stock options are generally granted at prices of not less than 100% of the fair market value of the common stock on the date of grant. Options granted under our option plans generally vest over a four year period. Options are exercisable until the tenth anniversary of the date of grant unless they lapse before that date.

On January 13, 2012, the Company granted 141,000 stock options at a strike price of $0.15 to certain officers and employees. The grant date fair value of the awards was $8,219 (net of estimated forfeitures of 10%), which was determined using a Black Scholes option pricing model using the following assumptions: volatility of 72%, risk-free rate of return of .36%, stock price of $0.15 and expected term of 2.5 years. The options expire in 2016. The Company is expensing these awards on a straight line basis over the vesting period.

On May 17, 2012, the Company granted 210,000 stock options at a strike price of $0.17 to the members of its Board of Directors. The grant date fair value of the awards was $13,465, which was determined using a Black Scholes option pricing model using the following assumptions: volatility of 62%, risk-free rate of return of .35%, stock price of $0.17 and expected term of 2.5 years. The options expire in 2017. As these awards vested immediately, the Company expensed the entire fair value of the award on the grant date.

No other awards were granted during the year ended December 31, 2012. The following sets forth a summary of stock options:

	Number of Units			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2011		1,022,685		$	0.81		2.6	$	-
Grants		351,000			0.16
Forfeitures		(375,099	)		1.72
Exercises		-			-
Outstanding at December 31, 2012		998,586		$	0.24		3.3	$	43,083
Vested and exerciseable at December 31, 2012		747,760		$	0.27		3.3	$	29,918
Vested and exerciseable at December 31, 2012 and expected to vest thereafter		938,447		$	0.24		3.3	$	40,574

The following sets forth exercise price information for options outstanding at December 31, 2012:

Exercise	Number of Shares
Price	Outstanding		Exerciseable
$0.15-$0.20		991,086		740,260
$1.70 - $7.50		6,500		6,500
$26.80		1,000		1,000
		998,586		747,760

The Company recognized expense of $23,714 and $26,107 related to all options for the years ended December 31, 2012 and 2011, respectively. The future expense relating to unvested option awards (net of estimated forfeitures) is $8,912 at December 31, 2012 which will be recognized over a weighted average period of 1.3 years.