Stock Option Plans

12 Months Ended

Dec. 31, 2011

Disclosure Text Block Supplement [Abstract]

Shareholders' Equity and Share-based Payments [Text Block]

13.  Stock Option Plans

During September 1993, the Company adopted the 1993 Stock Option Plan (the “1993 Plan”). The 1993 Plan provides for the issuance of up to 315,000 shares of common stock upon exercise of the options. The Company has reserved 315,000 shares of common stock to satisfy the requirements of the 1993 Plan. The options are non-qualified stock options and are not transferable by the recipient. The 1993 Plan is administered by the Compensation Committee (the “Committee”) of the Board of Directors, which may grant options to employees, directors and consultants to the Company. The term of each option may not exceed fifteen years from the date of grant. Options are exercisable over either a 10 or 15 year period and exercise prices are not less than the market value of the shares on the date of grant.

In December 1999, the Company’s stockholders approved the 1999 Stock Option Plan (the “1999 Plan”) providing for the granting of incentive stock options or nonqualified stock options to directors, officers, or employees of the Company. Under the 1999 Plan, 7,500,000 shares of common stock are reserved for issuance. Incentive stock options and nonqualified options have terms which are determined by the Committee with exercise prices not less than the market value of the shares on the date of grant. The options generally expire five to ten years from the date of grant and are exercisable based upon graduated vesting schedules as determined by the Committee.

As of December 31, 2011, 3,273,165 options have been granted and currently outstanding under the 1993 and 1999 Plans including 3,262,665 nonqualified stock options.

Activity with respect to these plans is as follows:

	2011					2010
				Weighted					Weighted
				Average					Average
				Exercise					Exercise
	Number			Price		Number			Price
Options outstanding beginning of period		3,152,374		$	2.07		3,205,208		$	2.18
Options granted		300,000		$	0.16		130,000		$	0.74
Options exercised		-		$	-		-		$	-
Options forfeited		(37,000	)	$	0.60		(80,333	)	$	1.14
Options expired		(142,209	)	$	1.38		(102,501	)	$	4.58
Options outstanding end of period		3,273,165		$	1.94		3,152,374		$	2.07
Options exercisable		2,978,833					2,873,708
Shares available for granting of options		3,803,996					3,924,787

Stock options outstanding at December 31, 2011 under both plans are summarized as follows:

		Options Outstanding						Options Exercisable
				Weighted Avg.		Weighted				Weighted Avg.		Weighted
Range of		Number		Remaining		Avg. Exercise		Number		Remaining		Avg. Exercise
Exercise Prices		Outstanding		Contractual Life		Price		Exercisable		Contractual Life		Price
$	0.16		300,000		4.8	$	0.16		74,000		4.8	$	0.16
$	0.79-$0.85		202,000		2.7	$	0.77		175,335		6.9	$	0.79
$	0.90-$1.32		808,334		4.2	$	1.16		766,667		4.0	$	1.17
$	1.38-$2.06		645,292		5.2	$	1.64		645,292		5.2	$	1.64
$	2.08-$3.10		997,206		3.6	$	2.60		997,206		3.6	$	2.60
$	3.18-$4.45		79,834		2.5	$	4.30		79,834		2.5	$	4.30
$	5.00-$5.59		240,499		2.9	$	5.31		240,499		2.9	$	5.31

During 2011, the Company granted a total of 300,000 stock options at a weighted average fair value of $0.07. Also, during the year ended December 31, 2011, a total of 247,300 shares vested at a weighted average fair value of $0.72. As of December 31, 2011, there are a total of 294,300 options that remain non-vested at a weighted average fair value of $0.32.

In 2010, the Company issued warrants to purchase a total of 314,715 shares of the Company’s stock at an exercise price of $0.20 per share in connection with a Promissory Note with Merlin Partners, LP. The warrants were accounted for under the equity method at a Black-Scholes’ fair value of $0.20 per share or a total value of $63,274 and are classified in equity. No warrants to purchase common stock related to the note have been exercised through December 31, 2011. These warrants were issued with an expiration date of December 28, 2015.

In 2011, the Company issued additional warrants to purchase a total of 1,428,535 shares of the Company’s stock at an exercise price of $0.20 per share in connection with the December 2010 Promissory Note with Merlin Partners, LP and a March 2011 Debenture Agreement with Merlin Partners, LLP. The 1,428,535 warrants issued in 2011 included 1,271,178 warrants issued on August 2, 2011 upon completion of the Company’s Rights Offering under anti-dilution provisions contained in the original issued warrants. See Note 19. Related Party Transactions. The warrants issued in March 2011 in connection with the Debenture Agreement were accounted for under the equity method at a Black-Scholes’ fair value of $0.20 per share or a total value of $47,420. No warrants to purchase common stock related to the note or debenture have been exercised through December 31, 2011.

During the exercise period, the Company will reserve a sufficient number of shares of its common stock to provide for the exercise of the rights represented by option holders.