Stock-Based Compensation Plans and Awards

12 Months Ended

Dec. 31, 2015

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

Stock-Based Compensation Plans and Awards

NOTE 10 – STOCK-BASED COMPENSATION PLANS AND AWARDS

The Company’s 2012 Long Term Incentive Plan (the “2012 Plan”) provides for the issuance of stock options, restricted stock units and other stock-based awards to members of management and key employees. The 2012 Plan is administered by the compensation committee of the Board of Directors of the Company, or in the absence of a committee, the full Board of Directors of the Company. The Plan was enacted in July 2012, and prior to this time, no plan and consequently, no stock options or shares of restricted stock were granted under an equity compensation plan.

Valuation of Awards

The per-share fair value of each stock option granted during the year ended December 31, 2014 was determined on the date of grant using the Black-Scholes option pricing model using the following assumptions:

	2015
Expected life (in years)		7.00
Risk-free interest rate		0.02	%
Expected volatility		193.57
Expected dividend yield		0	%

Stock Options

There were no options granted during the year ended December 31, 2015. For years ended December 31, 2015 and 2014, the Company recorded stock-based compensation expense, net of estimated forfeitures, (included in selling, general and administrative expense) of $959 and $44,310, respectively, related to stock options. As of December 31, 2015, 1,628,000 options are vested (1,040,000 at $1.50 per share, 538,000 at $0.38 per share, and 50,000 at $.005 per share.

For year ended December 31, 2014, 650,000 options at an exercise price of $1.50 were cancelled and 902,666 options at $0.38 expired. For year ended December and 3,210,000 options at an exercise price of $1.50 and 465,334 options at $0.38 expired and were cancelled.

A summary of stock option activity for the years ended December 31, 2015 and 2014 is as follows:

	Outstanding			Weighted-Average		Aggregate
	Stock Options			Exercise Price		Intrinsic Value (1)
Balance as of December 31, 2013		6,806,000		$	1.21	$	-
Cancelled		(650,000	)		1.50		-
Granted		50,000			0.05		2,000.00
Exercised		-			-		-
Expired		(902,666	)		0.38		-
Balance as of December 31, 2014		5,303,334		$	1.30	$	-
Expired		(3,675,334	)		0.74		-
Balance as of December 31, 2015		1,628,000		$	1.09	$	-
Equity awards available for grant, net of restricted stock (811,576) at December 31, 2015		7,560,424

(1)  Amounts represent the difference between the exercise price and the fair value of common stock at period end for all in the money options outstanding based on the fair value per share of common stock. As of December 31, 2014, 50,000 options that had been granted were “in the money.”

Restricted Stock

The fair value of the restricted stock is expensed ratably over the vesting period. During the years ended December 31, 2015 and 2014, the Company recorded stock-based compensation expense related to restricted stock of approximately $0 and $33,983, respectively. During the years ended December 31, 2015 634,626 shares of restricted stock vested and the expenses related to the 634,626 restricted shares were accrued at December 31, 2014.