Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

11. Stock-Based Compensation

The Company has various stock-based employee compensation plans, which are described more fully in Note 10 of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, as amended by Amendment No. 1 thereto.

Stock-based compensation expense was $115,005 and $92,721 for the nine months ended September 30, 2010 and September 30, 2011, respectively. There were 2,220,000 new options granted by the Company during the nine months ended September 30, 2011. Stock-based compensation expense is based on awards ultimately expected to vest and has been reduced for estimated forfeitures.

The Company uses the Black-Scholes option-pricing model (“Black-Scholes”) as its method of valuation of stock options granted. This fair value is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair value of share-based payment awards on the date of grant as determined by the Black-Scholes model is affected by our stock price as well as other assumptions. These assumptions include, but are not limited to the expected stock price volatility over the term of the awards and the actual and projected employee stock option exercise behaviors.

At September 30, 2011, the balance of unearned stock-based compensation to be expensed in future periods related to unvested share-based awards, as adjusted for expected forfeitures, is approximately $471,000. The weighted-average grant date fair value for options granted during the nine months ended September 30, 2011 was $0.34 per share. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is approximately two years.

The following is a summary of stock option activity from January 1, 2011 through September 30, 2011:

	Stock Options
					Weighted-
					Average
	Number			Price Per	Exercise Price
	of Shares			Share	Per Share
Outstanding at December 31, 2010		4,787,085		$0.17 – $1.09	$	0.41
Granted		2,220,000		0.29 – 0.36		0.34
Exercised		(3,333	)	0.17		0.17
Canceled/forfeited		(875,417	)	0.17 – 1.09		0.76
Outstanding at September 30, 2011		6,128,335		$0.17 – $0.71	$	0.34

The following information applies to options outstanding at September 30, 2011:

			Weighted-
			Average		Weighted-				Weighted-
Range of	Outstanding at		Remaining		Average		Exercisable at		Average
Exercise	September 30,		Contractual		Exercise		September 30,		Exercise
Prices	2011		Life		Price		2011		Price
$0.01 – 1.00		6,128,335		5.7	$	0.34		3,172,990	$	0.36