Stock-Based Compensation

9 Months Ended

Sep. 30, 2013

Share-based Compensation [Abstract]

Stock-Based Compensation

Note 6:  Stock-Based Compensation

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

In November 2010, the board of directors authorized the 2010 Stock Incentive Plan ("the Plan") which provides us with the ability to issue options on up to 1,360,000 common shares.

In April 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.

In August 2013, the Company increased the number of shares of the Company’s common stock available for issuance under the Plan from 2,500,000 to 5,000,000. The Company’s stockholders approved this increase on October 22, 2013 pursuant to a written consent of stockholders owning a majority of the shares of outstanding common stock.

Stock option awards are expensed on a straight-line basis over the requisite service period.  During the three and nine months ended September 30, 2013, the Company recognized expense of $71,237 and $131,381, respectively, associated with stock option awards. During the three and nine months ended September 30, 2012, the Company recognized expense of $50,314 and $116,584, respectively, associated with stock option awards. At September 30, 2013, future stock compensation expense (net of estimated forfeitures) not yet recognized was $1,331,541 and will be recognized over a weighted average remaining vesting period of 3.89 years.  The following summarizes stock option activity for the nine months ended September 30, 2013:

								Weighted
				Weighted		Weighted		Average
				Average		Average		Remaining
	Number of			Exercise		Fair		Contractual
	Shares			Price		Value		Life
Outstanding at December 31, 2012		2,184,583		$	0.89	$	0.48
Granted at market price		1,768,449			1.01
Exercised		(94,500	)	$	0.25
Forfeited		(474,000	)	$	1.26
Outstanding at September 30, 2013		3,384,532			0.92		0.23		9.1
Exercisable at September 30, 2013		619,446		$	0.51	$	0.29		7.2

The outstanding shares at December 31, 2012 were adjusted to reflect options that were issued but not included in the prior periods tables.  This does not impact stock compensation expense.

The following table summarizes information about the Company’s stock options at September 30, 2013:

	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		487,333	$	0.25		102,250		0.25		589,583	$	0.25
$0.99 per share		-		-		765,000		0.99		765,000	$	0.99
$1.00 per share		31,113		1.00		1,462,336		1.00		1,493,449	$	1.00
$1.03 per share		-	$	-		125,000		1.03		125,000	$	1.03
$1.11 per share		-	$	-		150,000		1.11		150,000	$	1.11
$1.59 per share		101,000	$	1.59		160,500		1.59		261,500	$	1.59