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Stock Option Plans (Tables)
12 Months Ended
Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of Assumptions Used to Estimate Share-Based Compensation Expense Using Black-Scholes Model
Except for the certain grants of restricted common stock and common stock options containing market conditions as described below, the Company estimated share-based compensation expense for the years ended December 31, 2012 and 2013 using the Black-Scholes model with the following weighted average assumptions:
 
 
 
Year Ended December 31,
 
 
 
2012
 
 
2013
 
Risk free interest rate
 
0.79-1.32
%
 
0.90-1.77
%
Expected dividend yield
 
 
 
 
Expected volatility
 
71.9-101.2
%
 
102.2-107.4
%
Expected term **(in years)
 
6.0-6.25
 
 
5.0-6.0
 
Forfeiture rate
 
7.0
%
 
7.0
%
 
** Expected term is calculated using SAB 107, Simplified Formula. Management has concluded that the use of the simplified method for calculating the expected term of its common stock option grants is appropriate given the lack of historical exercises and the standard terms of the employee option grants, including options are granted at-the-money, exercise is conditional only on performing service through the vesting dates, termination of service causes forfeiture of options, employees have a limited number of days to exercise options after termination of service, and options are non-transferable.
Summary of Stock Option Activity
The following table summarizes the stock option activity for the 2000 Stock Plan and the 2006 Stock Plan for the year ended December 31, 2013:
 
 
 
 
 
 
Weighted
 
 
 
 
 
 
 
 
 
 
 
 
Average
 
Remaining
 
Aggregate
 
 
 
Number of
 
Exercise
 
Contractual
 
Intrinsic
 
 
 
Shares
 
Price
 
Life (Years)
 
Value
 
Outstanding, December 31, 2011
 
 
1,870,846
 
$
3.67
 
 
7.40
 
$
66,976
 
Granted
 
 
1,039,200
 
 
1.35
 
 
 
 
 
 
 
Exercised
 
 
 
 
 
 
 
 
 
 
 
Expired
 
 
(824,023)
 
 
4.77
 
 
 
 
 
 
 
Forfeited
 
 
(336,713)
 
 
1.84
 
 
 
 
 
 
 
Outstanding, December 31, 2012
 
 
1,749,310
 
$
2.12
 
 
8.32
 
$
151,919
 
Granted
 
 
1,115,750
 
 
1.33
 
 
 
 
 
 
 
Exercised
 
 
(18,023)
 
 
1.33
 
 
 
 
 
 
 
Expired
 
 
(253,060)
 
 
2.30
 
 
 
 
 
 
 
Forfeited
 
 
(305,901)
 
 
1.39
 
 
 
 
 
 
 
Outstanding, December 31, 2013
 
 
2,288,076
 
$
1.83
 
 
8.41
 
$
1,082
 
Exercisable, December 31, 2013
 
 
925,759
 
$
2.55
 
 
6.86
 
$
316
 
Schedule of Options Outstanding
The following table provides additional information in regards to options outstanding as of December 31, 2013:
 
 
 
 
Options Outstanding
 
Options Exercisable
 
 
 
 
 
 
Weighted Average
 
 
 
Weighted Average
 
 
 
 
 
 
Remaining
 
 
 
Remaining
 
 
 
 
Number of
 
Contractual
 
Number of
 
Contractual
 
Exercise Price
 
Options
 
Term
 
Options
 
Term
 
$
1.00 to 1.99
 
1,783,076
 
9.1
 
488,913
 
8.0
 
 
2.00 to 2.99
 
287,500
 
7.6
 
219,346
 
7.4
 
 
3.00 to 3.99
 
71,000
 
4.6
 
71,000
 
4.6
 
 
4.29
 
11,500
 
3.6
 
11,500
 
3.6
 
 
7.00
 
135,000
 
3.4
 
135,000
 
3.4
 
 
 
 
2,288,076
 
8.4
 
925,759
 
6.9
 
Schedule of Stock Based Compensation Included in Results of Operations
Stock-based compensation expense was classified in the results of operation as follows:
 
 
 
Year Ended December 31,
 
 
 
2012
 
2013
 
Cost of revenue
 
$
57,999
 
$
30,527
 
Selling and marketing expense
 
 
54,527
 
 
29,791
 
General and administrative expense
 
 
672,869
 
 
372,158
 
Research and development expense
 
 
32,642
 
 
41,625
 
Totals
 
$
818,037
 
$
474,101
 
Schedule of Awards to Mr. Bologna
The following table summarizes these awards to Mr. Bologna:
 
 
 
 
 
 
 
Intrinsic
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Value as of
 
 
 
 
 
Remaining
 
 
 
 
 
 
 
December 31,
 
 
 
Options
 
Contractual
 
Type
 
Grant Date
 
Number of Awards
 
2013
 
Exercise Price
 
Exercisable
 
Term
 
Restricted Shares of Common Stock
 
12/21/2011
 
270,000
 
$
313,200
 
$
 
 
8.0
 
Options
 
12/21/2011
 
600,000
 
$
 
$
1.20
 
400,000
 
8.0
 
Options
 
12/21/2011
 
300,000
 
$
 
$
1.20
 
300,000
 
8.0