Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

3. Stock-Based Compensation

2005 Stock Plan

The Company has one stock-based compensation plan, the 2005 Stock Plan (the “2005 Plan").  Under the 2005 Plan, 3,000,000 shares of stock are reserved for issuance to eligible employees, non-employee directors and certain consultants.  The 2005 Plan is administered by the board of directors or committee of the board of directors, who have sole discretion to set vesting, expiration and other terms of awards under the 2005 Plan.  As of September 30, 2011, the 2005 Plan had a total of 340,000 options outstanding and 2,560,000 shares available for future grants.

Non-Plan Options

Prior to approval of the 2005 Plan, the Company granted stock options out-of-plan.  These non-plan options provided for the periodic issuance of stock options to employees and non-employee members of the board of directors.  The vesting period for the non-plan stock options was over a three-year term, commencing on the first anniversary of the date of grant.  The maximum contractual term of stock options granted under these out-of-plan options was eight years.  As of September 30, 2011, there were 850,000 non-plan options outstanding.

Stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period.  The fair value is determined using the Black-Scholes Option pricing model.

No options were granted during the three or nine months ended September 30, 2011 or 2010.

For the three months ended September 30, 2011 and 2010, the Company recognized $0 and $18,925, respectively, of stock-based compensation costs.  During the nine months ended September 30, 2011 and 2010, the Company recognized $0 and $91,865, respectively, of stock-based compensation costs.  The 2010 compensation cost includes a one-time charge of $28,812 for the true-up of stock options that became fully vested during the first quarter of 2010 quarter.  These costs are reflected in operating expenses.

Stock option activity was as follows for the nine months ended September 30, 2011:

	Number of Options			Weighted- Average Exercise Price		Weighted-Average Remaining Contract Term (Years)	Aggregate Intrinsic Value
Outstanding, January 1, 2011		1,462,000		$	1.21	2.79
Granted		-			-
Forfeited / Expired		(272,000	)	$	0.88
Exercised		-			-
Outstanding, September 30, 2011		1,190,000		$	0.91	1.67	$	-
Exercisable, September 30, 2011		1,190,000		$	0.91	1.67	$	-

As of January 1, 2011, all stock options had vested and, accordingly, all stock-based compensation cost was recognized.