Equity-Based Compensation

3 Months Ended

Mar. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity-Based Compensation

Equity-Based Compensation

The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option valuation model. Expected volatility is based on the historical volatility of the price of the Company’s stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. Accordingly, the fair values of the options granted, were estimated based on the following weighted average assumptions:

	Three Months Ended March 31,
	2013	2012
Risk-free interest rate	0.14% - 0.38%	—
Expected dividend yield	—	—
Expected lives	1 year - 2.5 years	—
Expected volatility	89.727%-118.222%	—
Weighted average grant date fair value for options and warrants issued	$0.09 per warrant for 1,500,000 warrant	—

Stock option activity during the three months ended March 31, 2013 is as follows:

Stock option activity for employees:

	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding January 1, 2013	9,441,480	$	1.90	5.35	$	—
Granted	—	—		—	—
Forfeited	—	—		—	—
Outstanding March 31, 2013	9,441,480	$	1.90	5.10	$	—
Vested and expected to vest March 31, 2013	9,441,480	$	1.90	5.10	$	—
Exercisable March 31, 2013	9,231,522	$	1.93	5.01	$	—

No options to purchase shares were granted to employees during the three months ended March 31, 2013.

Unvested stock option activity for employees:

	Number of Options		Weighted Average Exercise  Price		Average  Remaining Contractual  Term  (Years)	Aggregate  Intrinsic Value
Outstanding January 1, 2013	516,373		$	0.45	9.4	$	—
Granted	—		—		—	—
Vested	(306,415	)	0.45		9.3	—
Forfeited	—		—		—	—
Outstanding March 31, 2013	209,958		$	0.45	9.1	$	—

Stock option activity for non-employees:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding January 1, 2013	3,428,432		$	1.73	4.71	$	—
Granted	—		—		—	—
Exercised	—		—		—	—
Forfeited	(150,000	)	2.00		—	—
Outstanding March 31, 2013	3,278,432		$	1.72	4.66	$	—
Vested and expected to vest March 31, 2013	3,278,432		$	1.72	4.66	$	—
Exercisable March 31, 2013	3,185,717		$	2.01	4.64	$	—

No options to purchase shares were granted to non-employees during the three months ended March 31, 2013.

Unvested stock option activity for non-employees during the year:

	Number of Options		Weighted Average Exercise  Price		Weighted  Average Remaining  Contractual Term  (Years)	Aggregate  Intrinsic Value
Outstanding January 1, 2013	210,422		$	0.40	9.68	$	—
Options granted	—		—		—	—
Options vested	(117,707	)	0.47		8.87	—
Options forfeited	—		—		—	—
Outstanding March 31, 2013	92,715		$	0.31	8.77	$	—

The impact on the Company’s results of operations of recording equity-based compensation for the three months ended March 31, 2013 and 2012 was to increase general and administrative expenses by approximately $121,000 and $36,000 respectively. The impact on basic and fully diluted earnings per share for the three months ended March 31, 2013 and 2012 was $0.00 and $0.00, respectively.

As of March 31, 2013 and 2012, respectively, there was $208,000 and $121,000 of unrecognized equity-based compensation cost related to options granted under the Equity Incentive Plan.