Stock Options and Warrants

6 Months Ended

Jun. 30, 2015

Stockholders Equity Note [Abstract]

Stockholders Equity Note Disclosure [Text Block]

Note F – Stock Options and Warrants

The Company currently has three non-statutory stock option plans, the Fiscal 2000 Non-statutory Stock Option Plan (the “2000 Plan”), the Fiscal 2001 Non-statutory Stock Option Plan (the “2001 Plan”) and the 2013 Equity Compensation Plan (the “2013 Plan”).

During the three months ended June 30, 2015, the Company issued options to purchase 20,000 shares of common stock to each of its four non-employee board members as an annual stock option grant (for a total of 80,000 options), under the 2001 Plan. The Company also issued the Waterhouse VG Option Grant. During the three months ended June 30, 2014, the Company issued options to purchase 20,000 shares of common stock to each of its four non-employee board members as an annual stock option grant (for a total of 80,000 options), under the 2001 Plan.

Stock option activity for the six months ended June 30, 2015 and the six months ended June 30, 2014 is summarized as follows (the figures contained within the tables below have been rounded to the nearest thousand):

	Six months ended June 30, 2015						Six months ended June 30, 2014
	Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of June 30, 2015		Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of June 30, 2014
Options outstanding at beginning of period		1,295,000	$	0.23				3,316,000	$	0.43
Granted		340,000	$	0.12				80,000	$	0.12
Exercised		0		NA				0		NA
Cancelled/expired		(88,000)	$	0.95				(817,000)	$	1.07
Options outstanding at end of period		1,547,000	$	0.19	$	9,000		2,579,000	$	0.23	$	9,000
Options exercisable at end of period		1,105,000	$	0.22				2,197,000	$	0.24

The following table summarizes weighted-average assumptions using the Black-Scholes option-pricing model used on the date of the grants issued during the six months ended June 30, 2015 and the six months ended June 30, 2014:

	Six months ended
	2015	2014
Volatility	63% - 64%	73%
Expected term (years)	10	10
Risk-free interest rate	1.92% - 2.33%	2.64%
Dividend yield	0%	0%

The Company recognized $18,000 in share based payment expense in the six months ended June 30, 2015, and $19,000 in share based payment expense in the six months ended June 30, 2014. The Company recognized $8,000 in share based payment expense in the three months ended June 30, 2015, and $12,000 in share based payment expense in the three months ended June 30, 2014. As of June 30, 2015, there was approximately $49,000 of total unrecognized compensation expense related to vested, and non-vested stock options. This cost is expected to be recognized over a period ranging from 2 to 35 months.

 

Warrants

Warrant activity for the six months ended June 30, 2015 and the six months ended June 30, 2014 is summarized as follows (the figures contained within the tables below have been rounded to the nearest thousand):

	Six months ended June 30, 2015						Six months ended June 30, 2014
	Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of March 31, 2015		Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of March 31, 2014
Warrants outstanding at beginning of period		3,303,000	$	0.17				3,224,000	$	0.17
Granted		0		NA				0		NA
Exercised		0		NA				0		NA
Cancelled/expired		0		NA				0		NA
Warrants outstanding at end of period		3,303,000	$	0.17	$	0		3,224,000	$	0.17	$	0
Warrants exercisable at end of period		3,303,000	$	0.17				3,224,000	$	0.17

The Company recognized $100,000 and $20,000 in debt issuance and deferred finance costs related to the issuance of the above warrants outstanding in the six months ended June 30, 2015 and June 30, 2014, respectively. The Company recognized $75,000 and $8,000 in debt issuance and deferred finance costs related to the issuance of the above warrants outstanding in the three months ended June 30, 2015 and June 30, 2014, respectively. The increase in costs from an annual comparison perspective is related to the accelerated amortization of the expense due to the early termination of the Imperium Line of Credit. As of June 30, 2015, there is $0 in total unrecognized expense associated with the issuance of the above warrants outstanding.