Stock Options / Warrant Grants

9 Months Ended

Sep. 30, 2015

Stockholders Equity Note [Abstract]

Stockholders Equity Note Disclosure [Text Block]

Note F - Stock Options / Warrant Grants

Stock Options

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 nine months ended September 30, 2015, the Company issued options (all under the 2001 Plan) to purchase 90,000 shares of common stock to its board members and an option to purchase 250,000 common shares to stock to the Company’s CEO Melissa Waterhouse as compensation for her execution of a Validity Guarantee (“VG”) required under the Crestmark Line of Credit. All options were issued with an exercise price based on the closing price of the Company’s common shares on the date of grant. The Board member options vest 100% on the 1-year anniversary of the date of the grant and the Waterhouse VG stock option vests over the terms of the Crestmark Line of Credit, or over 3 years. During the nine months ended September 30, 2014, the Company issued options to purchase 80,000 shares of common stock to employees and directors under the 2001 Plan.

During the three months ended September 30, 2015, the Company issued 0 stock options. During the three months ended September 30, 2014, the Company issued 0 stock options.

Stock option activity for the nine months ended September 30, 2015, and the nine months ended September 30, 2014 is summarized as follows:

Nine months ended September 30, 2015							Nine months ended September 30, 2014
											Aggregate
					Aggregate						Intrinsic
			Weighted		Intrinsic				Weighted		Value as of
			Average		Value as of				Average		September
			Exercise		September				Exercise		30,
	Shares		Price		30, 2015		Shares		Price		2014
Options outstanding at beginning of period		1,295,000	$	0.27				3,316,000	$	0.69
Granted		340,000	$	0.12				80,000	$	0.12
Exercised		0		NA				0		NA
Cancelled/expired		(200,000)	$	0.90				(838,000)	$	1.07
Options outstanding at end of period		1,435,000		0.14	$	16,300		2,558,000	$	0.22	$	6,150
Options exercisable at end of period		1,027,000	$	0.15				2,209,000	$	0.23

The following table summarizes weighted-average assumptions using the Black-Scholes option-pricing model used on the date of the grants issued during the nine months ended September 30, 2014 and 2013:

	Nine months ended September 30,
	2015	2014
Volatility	63% - 64%	197%
Expected term (years)	10	7.5 yrs
Risk-free interest rate	1.92% - 2.33%	0.87%
Dividend yield	0%	0%

As of September 30, 2015, there was approximately $40,000 of total unrecognized compensation cost related to vested and non-vested stock options, which vest over time. That cost is expected to be recognized over a period ranging from 5 to 32 months.

Warrants

Warrant activity for the nine months ended September 30, 2015 and the nine months ended September 30, 2014 is summarized as follows:

Nine months ended September 30, 2015							Nine months ended September 30, 2014
					Aggregate						Aggregate
			Weighted		Intrinsic				Weighted		Intrinsic
			Average		Value as of				Average		Value as of
			Exercise		September				Exercise		September
	Shares		Price		30, 2015		Shares		Price		30, 2014
Warrants outstanding at beginning of period		3,303,000	$	0.17				3,303,000	$	0.17
Granted		0		NA				0		NA
Exercised		0		NA				0		NA
Cancelled/expired		(918,000)	$	0.15				0	$	0.14
Warrants outstanding at end of period		2,385,000	$	0.17	$	0		3,303,000	$	0.17	$	0
Warrants exercisable at end of period		2,385,000	$	0.17				3,303,000	$	0.17

The Company recognized $100,000 and $50,000 in debt issuance and deferred finance costs related to the issuance of the above warrants outstanding in the nine months ended September 30, 2015 and September 30, 2014, respectively. The Company recognized $0 and $25,000 in debt issuance and deferred finance costs related to the issuance of the above warrants outstanding in the three months ended September 30, 2015 and September 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 September 30, 2015, there is $0 in total unrecognized expense associated with the issuance of the above warrants outstanding.