Stock Options

6 Months Ended

Jun. 30, 2013

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

Stock Options

NOTE 12 – STOCK OPTIONS

Employee Stock Options

The following table summarizes the changes in the options outstanding at June 30, 2013, and the related prices for the shares of the Company’s common stock issued to employees of the Company under a non-qualified employee stock option plan.

Range of Exercise Prices	Number Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Number Exercisable		Weighted Average Exercise Price
4.50		195,000	$	4.50		3.34		195,000	$	4.50
		195,000				3.34		195,000

A summary of the Company’s stock awards for options as of June 30, 2013 and changes for the six months ended June 30, 2013 is presented below:

	Stock Options			Weighted Average Exercise Price
Outstanding, December 31, 2012		211,000		$	4.50
Granted		—			—
Exercised		—			—
Expired/Cancelled		(16,000	)		—
Outstanding, June 30, 2013		195,000		$	4.50
Exercisable, June 30, 2013		195,000		$	4.50

The weighted-average fair value of stock options granted to employees during the period ended June 30, 2013 and 2012 and the weighted-average significant assumptions used to determine those fair values, using a Black-Scholes-Merton (“Black-Scholes”) option pricing model are as follows:

	June 30, 2013			June 30, 2012
Significant assumptions (weighted-average):
Risk-free interest rate at grant date		-	%		0.78	%
Expected stock price volatility		-	%		139	%
Expected dividend payout		-			-
Expected option life (in years)		-			5.00-
Expected forfeiture rate		-	%		0	%
Fair value per share of options granted	$	-		$	3.96

The expected life of awards granted represents the period of time that they are expected to be outstanding. The Company has no historical experience with which to establish a basis for determining an expected life of these awards. Therefore, the Company only gave consideration to the contractual terms and did not consider the vesting schedules, exercise patterns and pre-vesting and post-vesting forfeitures significant to the expected life of the option award.

We estimate the volatility of our common stock based on the calculated historical volatility of similar entities in industry, in size and in financial leverage whose share prices are publicly available. We base the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. We have not paid any cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future. Consequently, we use an expected dividend yield of zero in the Black-Scholes option valuation model.

There were no options granted during the quarter ended June 30, 2013.

Total stock-based compensation expense in connection with options granted to employees recognized in the consolidated statement of operations for the six months ended June 30, 2013 and 2012 was $0 and $891,383, respectively.