Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

12. Stock-Based Compensation

The Company has various stock-based employee compensation plans, which are described more fully in Note 11 of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, as amended by Amendment No. 1 thereto.

Stock-based compensation expense was $92,721 and $57,392 for the nine months ended September 30, 2011 and September 30, 2012, respectively. There were 1,625,000 new options granted by the Company during the nine months ended September 30, 2012. 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, 2012, 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 $212,000. The weighted-average grant date fair value for options granted during the nine months ended September 30, 2012 was $0.11 per share. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is approximately three years.

The following is a summary of stock option activity from January 1, 2012 through September 30, 2012:

	Stock Options
	Number of Shares			Exercise Price Per Share		Weighted- Average Exercise Price Per Share
Outstanding at December 31, 2011		4,423,335		$	0.13 - $0.62	$	0.31
Granted		1,625,000			0.11 - 0.21		0.11
Canceled/forfeited		(822,000	)		0.13 - 0.49		0.32
Outstanding at June 30, 2012		5,226,335		$	0.11 - $0.62	$	0.25

The following information applies to options outstanding at September 30, 2012:

Range of Exercise Prices	Outstanding at September 30, 2012		Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Exercisable at September 30, 2012		Weighted- Average Exercise Price
$0.01 - 0.19		2,180,000	6.3	$	0.12		439,722	$	0.17
0.20 - 0.29		1,131,335	4.8	$	0.26		795,363	$	0.26
0.30 - 0.39		1,207,500	4.9	$	0.35		818,611	$	0.35
0.40-0.49		697,500	5.3	$	0.46		697,500	$	0.46
0.60-0.69		10,000	1.0	$	0.62		10,000	$	0.62
		5,226,335	5.5	$	0.25		2,761,196	$	0.32