Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

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

Note 4 – Stock-Based Compensation

On April 2, 2012 and April 25, 2012, the Board approved and issued two option agreements for a total of 25,000 shares and 50,000 shares, respectively, of our common stock from our 2011 Stock Incentive Plan at an exercise price of $0.03 per share and $0.01 per share, respectively. Each of these grantees’ options vest over four years from the grant date.  

We used the following assumptions to value the stock options granted during the six months ended June 30, 2012:

	June 30,
	2012
Volatility		156%-169%
Expected dividends		-
Expected term (in years)		5.79
Risk-free rate		2.7%-2.89%

Total stock-based compensation expense recorded in the statement of operations was $6,500 and $25,000 for the three months ended June 30, 2012 and 2011, respectively and $13,700 and $52,000 for the six months ended June 30, 2012 and 2011, respectively.

A summary of the transactions and status of our granted, vested and exercisable options during the six months ended June 30, 2012 follows:

								Weighted-
								Average
				Weighted-				Contractual
				Average		Aggregate		Life
				Exercise		Intrinsic		Remaining
	Shares			Price		Value		in Years
	(in thousands)					(in thousands)
Outstanding at December 31, 2011		1,127		$	0.02
Granted		75		$	0.02
Exercised		-		$	-
Forfeited		(102	)	$	0.03
Outstanding at June 30, 2012		1,100		$	0.02	$	-		9.6
Exercisable at June 30, 2012		689		$	0.02	$	-		8.4

A summary of the status of our non-vested options as of June 30, 2012 and changes during the six months ended is presented below:

				Weighted
				Average
				Grant Date
Nonvested Shares	Shares			Fair Value
	(in thousands)
Nonvested at December 31, 2011		667		$	0.01
Granted		75		$	0.14
Vested		(229	)	$	0.04
Forfeited		(102	)	$	0.03
Nonvested at June 30, 2012		411		$	0.01

The following table summarizes information about our stock options outstanding at June 30, 2012:

Options Outstanding								Options Exercisable
Exercise Prices		Number of Shares		Weighted- Average Remaining Life		Weighted- Average Exercise Price		Number of Shares		Weighted- Average Exercise Price
		(in thousands)		(in years)				(in thousands)
	$0.014 to $0.03		990		9.0	$	0.02		601	$	0.02
	$0.05		100		8.7	$	0.05		83	$	0.05
	$0.14		10		8.4	$	0.14		5	$	0.14
			1,100		9.1	$	0.02		689	$	0.02

There were no stock options exercised during the three and six months ended June 30, 2012. 

Subsequent Events:

On July 23, 2012, the Board approved the issuance, under our 2011 Stock Incentive Plan, of four option agreements (each for 25,000 shares of our common stock) to each member of the Board of Directors, at an exercise price of $0.008 per share. Each of these grantees’ options vest over four years from the date of the grant.