STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2015

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

5. STOCKHOLDERS’ EQUITY

In May 2006, our stockholders approved the 2005 Equity Incentive Plan (the “2005 Plan”) and reserved 2,000,000 shares of our common stock for issuance. Our stockholders approved the reservation of an additional 1,750,000 shares of common stock for issuance under the 2005 Plan, which increased the total shares available for grant under the 2005 Plan to 3,750,000 shares. The 2005 Plan expired in April 2015. In June 2015, our stockholders approved the 2015 Equity Incentive Plan (the “2015 Plan”) and reserved 1,000,000 shares of our common stock for issuance. At December 31, 2015, 280,000 shares remained available to grant under the 2015 Plan (the 2005 plan and the 2015 plan are collectively referred to as “The Plans”). Two types of options may be granted under the Plans: options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code (the “Code”) and other options not specifically authorized or qualified for favorable income tax treatment by the Code. All eligible employees may receive more than one type of option. Any director or consultant who is not an employee of the Company shall be eligible to receive only nonqualified stock options under the Plans.

The Plans provide that in the event of a takeover or merger of the Company in which 100% of the equity of the Company is purchased or a sale of all or substantially all of the Company’s assets, 75% of all unvested employee options will vest immediately and the remaining 25% will vest over the following twelve month period. If an employee or holder of stock options is terminated as a result of or subsequent to the acquisition, 100% of that individual’s stock option will vest immediately upon employment termination.

We used the Black-Scholes model with the following assumptions to determine the total fair value of $174,000 and $53,000 for options to purchase 1,210,000 and 223,000 shares of our common stock issued during 2015 and 2014, respectively.

	2015			2014
Risk free interest rate		1.6	%		1.7	%
Volatility		100	%		100	%
Expected term from vesting		4.4 Years			4.2 Years
Dividend yield		0	%		0	%

Summary

Non-cash stock compensation cost for the year ended December 31, 2015 and 2014 totaled $174,000 and $53,000, respectively, and was recorded as a general and administrative expense in the Statement of Operations.

No options were exercised in the years ended December 31, 2015 and 2014.

At December 31, 2015, the remaining unamortized non-cash stock compensation costs totaled less than $3,000.

A summary of option activity under our stock option plans for the years ended December 31, 2015 and 2014 is as follows:

	2015				2014
									Weighted
			Weighted				Weighted		average
			average				average		remaining
	Number of		exercise		Number of		exercise		contractual term
	Options		price		Options		price		(years)
Options outstanding at the beginning of the year:		3,022,706	$	1.06		3,225,806	$	1.52
Granted		1,210,000	$	0.22		223,000	$	0.27
Exercised		-	$	-		-	$	-
Expired / Forfeited		(70,000)	$	1.31		(426,100)	$	4.17
Outstanding at end of year		4,162,706	$	0.81		3,022,706	$	1.06		5.41
Options exercisable at year-end		4,031,039	$	0.83		3,015,374	$	1.06		5.28
Options vested and expected to vest at year end		4,075,808	$	0.82		3,017,685	$	1.06		5.29

The Company had no unvested common stock share awards as of December 31, 2015 or December 31, 2014, and no common stock awards were made in 2015 or 2014.

It is the Company’s policy to issue options from stockholder approved incentive plans. However, if the options are issued as an inducement for an individual to join the Company, the Company may issue stock options outside of stockholder approved plans. The options granted to employees under stockholder approved incentive plans have a ten-year term and normally vest over a two to four-year period of service. All stock options are granted with an exercise price equal to the current market value on the date of grant and, accordingly, stock options have no intrinsic value on the date of grant. Based on the closing market price of the Company’s common stock at December 31, 2015 of $0.12, stock options exercisable or expected to vest at December 31, 2015, have no intrinsic value.

Warrants

At December 31, 2015, the Company has fully vested warrants outstanding to purchase 46,706 shares of the Company’s common stock with an exercise price of $6.39 per share, which expire in February 2016, and fully vested warrants outstanding to purchase 117,423 shares of the Company’s common stock with an exercise price of $1.91 per share, which expire in July 2016. No warrants were exercised during the years ended December 31, 2015 or 2014.