Stock Based Compensation

12 Months Ended

Dec. 31, 2012

Stock Based Compensation [Abstract]

Stock Based Compensation [Text Block]

11. Stock Based Compensation

The Company issued warrants and options to purchase common shares of the Company as compensation for consulting and Board of Directors services. The value of warrants and options issued for compensation are accounted for as a non-cash expense to the Company at the fair value of the warrants and options issued. The Company values the warrants and options at fair value as calculated by using the Black-Scholes option-pricing model. As of December 31, 2012 the Company has $0 in unamortized stock based compensation related to outstanding options and warrants.

The Company has adopted FASB ASC Topic No. 718 (ASC 718) which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, directors and consultants based on estimated fair values. ASC 718 requires companies to estimate the fair value of the award that is ultimately expected to vest to be recognized as expense. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of the grant using an option-pricing model. The value of the award that is ultimately expected to vest is recognized as expense over the requisite service periods.

The Company's determination of fair value of share-based payment awards on the date of grant uses the Black-Scholes model, which is affected by the Company's stock price as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the expected term of the awards, and actual and projected option exercise behaviors. The Company estimated expected volatility using historical data. The fair value of each warrant was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Risk-free interest rate		1.19	%
Expected term (years)		2.0
Volatility		135	%
Expected annual dividends		-
Stock price at November 13, 2008	$	3.96

The following table summarizes the warrant and option activity for the twelve months ended December 31, 2012:

	Number of
	Warrants and Options			Weighted-Average Exercise Price
Outstanding, December 31, 2011		25,000		$	4.08
Granted		0			0
Exercised		(15,000	)		4.46
Cancelled		—			0
Outstanding, December 31, 2012		10,000		$	5.40

The following summarizes the warrants issued, outstanding and exercisable as of December 31, 2011:

Grant Date	November, 2008
Strike Price	$3.20
Expiration Date	October 31, 2012
Warrants Remaining	15,000
Proceeds if Exercised	$48,000
Call Feature	None

During 2010, the Company's Board of Directors approved the extension of the expiration date of the warrants from November of 2010 to November of 2011. The Company recorded stock based compensation of $9,783 for the period ended December 31, 2010 as a result of the extension of the expiration date of the warrants. During 2011, the Company's Board of Directors approved the extension of the expiration date of the warrants from November of 2011 to October 31 of 2012. There was no additional stock based compensation recorded for this extension. On July 2, 2012 and September 20, 2012 consultants exercised the remaining 15,000 warrants under “cash-less” exercise provisions of the warrant agreement. As a result, 4,232 share of common stock were delivered to the warrant holders.

The following summarizes the options issued, outstanding and exercisable as of December 31, 2012:

Grant Date	June 2, 2011
Strike Price	$5.40
Expiration Date	June 1, 2016
Options Remaining	10,000
Proceeds if Exercised	$54,000
Call Feature	None