Stock-Based Compensation

3 Months Ended

12 Months Ended

Mar. 31, 2013

Dec. 31, 2012

Share-based Compensation [Abstract]

Stock-Based Compensation

Note 6:  Stock-Based Compensation

The Company has historically granted stock options to certain vendors and employees.  

On April 29, 2011, the Company increased the number of shares of the Company’s common stock available for issuance under the plan from 1,360,000 to 2,500,000.

Stock option awards are expensed on a straight-line basis over the requisite service period.  The Company recognized expense of $36,029 and $30,028, for the three months ended March 31, 2013 and March 31, 2012, respectively. At March 31, 2013, future stock compensation expense (net of estimated forfeitures) not yet recognized was $489,112 and will be recognized over a weighted average remaining vesting period of 3.34 years.  The following summarizes stock option activity for the three months ended March 31, 2013:

								Weighted
				Weighted		Weighted		Average
				Average		Average		Remaining
	Number of			Exercise		Fair		Contractual
	Shares			Price		Value		Life
Outstanding at December 31, 2012		1,695,250		$	1.08	$	0.58
Granted at market price		-
Exercised		(14,500	)
Forfeited		(425,500	)
Outstanding at March 31, 2013		1,255,250			1.02		0.59		9.1
Exercisable		189,250		$	1.09	$	0.58		8.5

The following table summarizes information about the Company’s stock options at March 31, 2013:

	Exercisable				Unexercisable				Total
			Weighted				Weighted				Weighted
			Average				Average				Average
	Number		Exercise		Number		Exercise		Number		Exercise
Range of Exercise Prices	Outstanding		Price		Outstanding		Price		Outstanding		Price
$.25 per share		70,000	$	0.25		107,000		0.25		177,000	$	0.25
$1.59 per share		119,250		1.59		169,000		1.59		288,250	$	1.59
$0.99 per share		-		-		790,000		0.99		790,000	$	0.99

Note 8:  Stock-Based Compensation

The Company has historically granted stock options to certain vendors and employees.  On January 26, 2011, the Company granted 384,000 stock options at a strike price of $0.25 that vest equally over a four year period.  The grant date fair value of the awards was $54,736 (net of estimated forfeitures of 10%) which was determined using a Black Scholes option pricing model using the following assumptions:  volatility of 68%, risk-free rate of return of 2.4%, stock price of $0.25 and expected term of 6.25 years.  The options expire in 2021.

On April 29, 2011, the Company increased the number of shares of the Company’s common stock available for issuance under the plan from 1,360,000 to 2,500,000.

On January 23, 2012, the Company granted 533,000 stock options at a strike price of $1.59 that vest equally over a four year period.  The grant date fair value of the awards was $394,625 (net of estimated forfeitures of 10%) which was determined using a Black Scholes option pricing model using the following assumptions:  volatility of 54%, risk-free rate of return of 1.2%, stock price of $1.59 and expected term of 6.25 years.  The options expire in 2022.

On October 5, 2012, the Company granted 1,010,000 stock options at a strike price of $0.99 that vest equally over a four year period. The grant date fair value of the awards was $510,982 (net of estimated forfeitures of 15%) which was determined using a Black Scholes option pricing model using the following assumptions: volatility of 66%, risk-free rate of return of .90%, stock price of $0.99 and expected term of 6.25 years. The options expire in 2022.

Awards are valued based on the grant date fair value of the instruments, net of estimated forfeitures, using a Black-Scholes option pricing model with the following assumptions:

	Year Ended December 31,
	2012			2011
Volatility		54%-68	%		68	%
Risk-free interest rate		.90%-1.22	%		2.40	%
Expected term	6.3 years			6.3 years
Forfeiture rate		15	%		10	%
Dividend yield rate		0	%		0	%

The volatility used was based on historical volatility of similar sized companies due to lack of historical data of the Company’s stock price. The risk free interest rate was determined based on treasury securities with maturities equal to the expected term of the underlying award.  The expected term was determined based on the simplified method outlined in Staff Accounting Bulletin No. 110.

Stock option awards are expensed on a straight-line basis over the requisite service period.  During the years ended December 31, 2012 and 2011, the Company recognized expense of $153,376 and $46,737, respectively. At December 31, 2012, future stock compensation expense (net of estimated forfeitures) not yet recognized was $717,864 and will be recognized over a weighted average remaining vesting period of 1.82 years.  The following summarizes stock option activity for the year ended December 31, 2012:

								Weighted
				Weighted		Weighted		Average
				Average		Average		Remaining
	Number of			Exercise		Fair		Contractual
	Shares			Price		Value		Life
Outstanding at December 31, 2011		1,318,000		$	0.25	$	0.16
Granted at market price		1,543,000			1.19		0.63
Exercised		(125,750	)
Forfeited		(1,040,000	)
Outstanding at December 31, 2012		1,695,250			1.08		0.58		9.4
Exercisable		23,750		$	0.25	$	0.16		8.1

The following summarizes information about the Company’s stock options at December 31, 2012:

	Exercisable				Unexercisable				Total
			Weighted				Weighted				Weighted
	Number		Average		Number		Average		Number		Average
Range of Exercise Prices	Outstanding		Exercise Price		Outstanding		Exercise Price		Outstanding		Exercise Price
$.25 per share		23,750	$	0.25		169,500		0.25		193,250	$	0.25
$1.59 per share		-		-		492,000		1.59		492,000	$	1.59
$0.99 per share		-		-		1,010,000		0.99		1,010,000	$	0.99

The intrinsic value of the Company’s stock options outstanding was $636,338 at December 31, 2012.