Stock Options, Restricted Stock and Warrants (Tables)

3 Months Ended

Mar. 31, 2015

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 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 three months ended March 31, 2015* using the Black-Scholes model with the following weighted average assumptions:

	Three Months Ended March 31, 2015
Risk free interest rate		1.68	%
Expected dividend yield		—	%
Expected volatility		99.2	%
Expected term **(in years)		6.25
Forfeiture rate ***		7.0	%

*     There were no stock options issued for the three months ended March 31, 2014.

** 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.

*** Forfeiture range represents 0% for directors and 21% for employees

Summary of Stock Option Activity

The following table summarizes the stock option activity for the 2006 Plan for the three months ended March 31, 2015:

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2014		2,833,604	$	1.62		7.9	$	-
Granted (Unaudited)		15,000	$	0.43		10.0	$	150
Exercised (Unaudited)		-	$	-		-		-
Expired (Unaudited)		(177,566)		2.86		4.9		—
Forfeited (Unaudited)		(209,960)	$	1.22		—		—
Outstanding, March 31, 2015 (Unaudited)		2,461,078	$	1.56		7.8	$	150
Exercisable, March 31, 2015 (Unaudited)		1,433,086	$	1.91		7.0	$	—

Schedule of Options Outstanding

The following table provides additional information regarding options outstanding under the 2006 Plan as of March 31, 2015 (unaudited):

	Options Outstanding				Options Exercisable
Exercise Price	Number of Options		WA Remaining Contractual Term		Number of Options		WA Remaining Contractual Term
$0.43 to 0.99		655,890		9.3		111,050		9.3
1.00 to 1.99		1,441,980		7.9		956,536		7.7
2.00 to 2.99		201,708		6.4		204,000		6.4
3.00 to 3.99		51,500		3.3		51,500		3.3
7.00		110,000		2.2		110,000		2.2
		2,461,078		7.8		1,433,086		7.0

Schedule of Stock Based Compensation Included in Results of Operations

Stock-based compensation expense – employees, was classified as follows in the results of operation:

	Three Months Ended March 31,
	2014		2015
Cost of revenue	$	11,256	$	9,327
Research and development		13,197		11,546
Sales and marketing		15,749		10,544
General and administrative		144,567		75,833
Totals	$	184,769	$	107,250

Schedule of Awards to Mr. Bologna

The following table summarizes these awards to Mr. Bologna:

Type	Grant Date	Number of Awards	Intrinsic Value as of March 31, 2015		Exercise Price		Options Exercisable	Remaining Contractual Term
Restricted Shares of Common Stock	12/21/2011	270,000	$	—	$	1.20	—	6.75
Options	12/21/2011	600,000	$	—	$	1.20	600,000	6.75
Options	12/21/2011	300,000	$	—	$	1.20	300,000	6.75