Stock Option Plans and Agreements

3 Months Ended

Mar. 31, 2013

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

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

Note 3. Stock Option Plans and Agreements

The Company has approved stock options plans and agreements covering up to an aggregate of 10,096,333 shares of common stock. Such options may be designated at the time of grant as either incentive stock options or nonqualified stock options. Stock based compensation includes expense charges related to all stock-based awards to employees, directors and consultants. Such awards include common stock options.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were used for the three months ended March 31, 2013:

Risk-free interest rate	1.00% - 1.14%
Expected dividend yield	0%
Expected stock price volatility	75%
Expected life of options	5.75 years

The Company recorded expense for options and warrants issued to employees and independent service providers of $36,399 and $20,072 for the three months ended March 31, 2013 and 2012, respectively.

At March 31, 2013, there was approximately $35,000 of total unrecognized compensation cost related to non-vested options. That cost is expected to be recognized over a weighted average period of approximately one year. The total fair value of shares that vested during the three months ended March 31, 2013 was approximately $20,000.

A summary of all stock option activity for the three months ended March 31, 2013 follows:

	Number of  Options			Weighted Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2012		6,884,500		$	.20
Options granted		1,500,000		$	.15
Options expired		(170,000	)	$	.11
Options forfeited		(90,000	)	$	.11
Outstanding at March 31, 2013		8,124,500		$	.20	6.0 years	$	407,000
Exercisable at March 31, 2013		5,745,500		$	.21	4.8 years	$	291,000

During the three months ended March 31, 2013, the Company issued 1,500,000 common stock options to independent consultants with an average exercise price of $.15 per share. At issuance, 200,000 options immediately vested. The balance of the options vest based on each independent consultant meeting specific sales performance criteria.