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Stock-Based Compensation
 6 Months Ended
Jun. 30, 2013
Stock-Based Compensation

12. 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, 2012, as amended by Amendment No. 1 thereto.

Stock-based compensation expense was $56,544 and $51,407 for the six months ended June 30, 2012 and June 30, 2013, respectively. There were 2,025,000 new options granted by the Company during the six months ended June 30, 2013. 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 June 30, 2013, the balance of unearned stock-based compensation to be expensed in future periods related to unvested share-based awards, as adjusted for expected forfeitures, was approximately $187,000. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is approximately three years.

The following table is a summary of stock option activity from January 1, 2013 through June 30, 2013:

 

 

Stock Options

 

 

Number
of Shares

 

  

Exercise Price
Per Share

 

  

Weighted-
Average
Exercise Price
Per Share

 

Outstanding at December 31, 2012             

 

  3,530,085

  

  

$

0.11 - $0.62

  

  

$

  0.24

  

Granted             

 

  2,025,000

  

  

$

  0.05

  

  

 

  0.05

  

Canceled/forfeited             

 

(618,335

) 

  

$

0.05 - $0.62

  

  

 

  0.27

  

Outstanding at June 30, 2013             

 

  4,936,750

  

  

$

0.05 - $0.62

  

  

$

  0.16

  

The following information applies to options outstanding at June 30, 2013:

 

Range of Exercise Prices

 

Outstanding at
June 30,
2013

 

  

Weighted-

Average

Remaining

Contractual

Life

 

  

Weighted-

Average

Exercise

Price

 

  

Exercisable at

June 30,

2013

 

  

Weighted-

Average

Exercise

Price

 

$0.01 - 0.19             

 

  3,330,000

  

  

 

  6.3

  

  

$

  0.08

  

  

 

  261,945

  

  

$

  0.16

  

0.20 - 0.29             

 

  663,000

  

  

 

  3.9

  

  

$

  0.26

  

  

 

  580,776

  

  

$

  0.26

  

0.30 - 0.39             

 

  717,500

  

  

 

  3.9

  

  

$

  0.35

  

  

 

  593,750

  

  

$

  0.35

  

0.40 - 0.49             

 

  226,250

  

  

 

  1.5

  

  

$

  0.47

  

  

 

  226,250

  

  

$

  0.47

  

 

 

  4,936,750

  

  

 

  5.4

  

  

$

  0.16

  

  

 

  1,662,721

  

  

$

  0.30