Stock Options and Warrants

3 Months Ended

Mar. 31, 2016

Stockholders Equity Note [Abstract]

Stockholders Equity Note Disclosure [Text Block]

NOTE F – Stock Options and Warrants

The Company currently has two non-statutory stock option plans, the Fiscal 2001 Non-statutory Stock Option Plan (the “2001 Plan”) and the 2013 Equity Compensation Plan (the “2013 Plan”). Both plans have been adopted by our Board of Directors and approved by our shareholders. Both the 2001 Plan and the 2013 Plan have options available for future issuance. Any common shares issued as a result of the exercise of stock options would be new common shares issued from our authorized issued shares.

During the First Quarter 2016, the Company issued options to purchase 750,000 shares of common stock under the Fiscal 2001 Plan to its Chief Executive Officer/Principal Financial Officer Melissa A. Waterhouse. During the First Quarter 2015, the Company issued options to purchase 10,000 shares of common stock under the 2001 Plan to its President and former Chairman of the Board.

Stock option activity for the First Quarter 2016 and the First Quarter 2015 is summarized as follows (the figures contained within the tables below have been rounded to the nearest thousand):

	First Quarter 2016						First Quarter 2015
	Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of March 31, 2016		Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of March 31, 2015
Options outstanding at beginning of period		1,435,000	$	0.14				1,295,000	$	0.31
Granted		750,000	$	0.11				10,000	$	0.13
Exercised		0		NA				0		NA
Cancelled/expired		0		NA				(57,000)	$	1.01
Options outstanding at end of period		2,185,000	$	0.13	$	9,000		1,248,000	$	0.23	$	13,000
Options exercisable at end of period		1,037,000	$	0.15				889,000	$	0.26

The following table summarizes weighted-average assumptions using the Black-Scholes option-pricing model used on the date of the grants issued during the First Quarter 2016 and the First Quarter 2015:

	First Quarter
	2016			2015
Volatility		62	%		64	%
Expected term (years)		10 yrs			10 yrs
Risk-free interest rate		1.94	%		1.92	%
Dividend yield		0	%		0	%

The Company recognized $19,000 in share based payment expense in the First Quarter 2016, and $11,000 in share based payment expense in the First Quarter 2015. As of March 31, 2016, there was approximately $104,000 of total unrecognized compensation cost related to non-vested stock options, which vest over time. That cost is expected to be recognized over a period ranging from 2 to 26 months.

 

Warrants

Warrant activity for the First Quarter 2016 and the First Quarter 2015 is summarized as follows:

	First Quarter 2016						First Quarter 2015
	Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of March 31, 2016		Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of March 31, 2015
Warrants outstanding at beginning of period		2,385,000	$	0.17				3,303,000	$	0.17
Granted		0		NA				0		NA
Exercised		0		NA				0		NA
Cancelled/expired		0		NA				0		NA
Warrants outstanding at end of period		2,385,000	$	0.17		None		3,303,000	$	0.17	$	0
Warrants exercisable at end of period		2,385,000	$	0.17				3,303,000	$	0.17

In the First Quarter 2016, the Company recognized $0 in debt issuance and deferred finance costs related to the issuance of the above warrants outstanding. In the First Quarter 2015, the Company recognized $25,000 in debt issuance and deferred finance costs related to the above warrants outstanding. As of March 31, 2016, there was $0 of total unrecognized expense due to acceleration of the expense when the Imperium line of credit was refinanced in June 2015.