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STOCKHOLDERS' EQUITY
 12 Months Ended
Dec. 31, 2013
Stockholders Equity Note [Abstract]  
Stockholders Equity Note Disclosure [Text Block]
9. STOCKHOLDERS’ EQUITY
 
Series A Convertible Preferred Stock
 
In January 1997, the Board of Directors authorized the creation of a class of Series A Convertible Preferred Stock with a par value of $.01.  The Series A Convertible Preferred Stock is convertible into an equal number of common shares at the holder’s option, subject to adjustment for anti-dilution.  The holders of Series A Convertible Preferred Stock are entitled to receive dividends as and if declared by the Board of Directors.  In the event of liquidation or dissolution of the Company, the holders of Series A Convertible Preferred Stock are entitled to receive all accrued dividends, if applicable, plus the liquidation price of $1.00 per share.  As of December 31, 2013 and 2012, there were no outstanding shares of Series A Convertible Preferred Stock.
 
Stock Options and Share Based Compensation
 
In order to retain and attract qualified personnel necessary for the success of the Company, the Company adopted several Stock Option Plans from 1998 through 2004 (and an amendment to the 2004 plan in 2006 pursuant to which the plan was renamed the “2006 Equity Incentive Plan” and amended to provide for the issuance of other types of equity incentives such as restricted stock grants) (collectively, the “Plans”) covering up to 6,250,000 of the Company’s common shares, pursuant to which officers, directors, key employees and consultants to the Company are eligible to receive incentive stock options and nonqualified stock options. The Compensation Committee of the Board of Directors administers these Plans and determines the terms and conditions of options granted, including the exercise price.  These Plans generally provide that all stock options will expire within ten years of the date of grant.  Incentive stock options granted under these Plans must be granted at an exercise price that is not less than the fair market value per share at the date of the grant and the exercise price must not be less than 110% of the fair market value per share at the date of the grant for grants to persons owning more than 10% of the voting stock of the Company.  These Plans also entitle non-employee directors to receive grants of non-qualified stock options as approved by the Board of Directors. 
 
Stock option activity under the 1998, 1999, 2001, 2003 and 2006 Stock Option Plans during the periods indicated below is as follows:
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
Number of
 
Weighted-
 
average
 
 
 
 
 
Shares
 
average
 
Remaining
 
Aggregate
 
 
 
Subject to
 
Exercise
 
Contractual
 
Intrinsic
 
 
 
Issuance
 
Price
 
Term
 
Value
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at December 31, 2011
 
1,244,260
 
$
1.93
 
2.29 years
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted
 
-
 
 
-
 
 
 
 
 
 
Forfeited or expired
 
(235,862)
 
 
3.10
 
 
 
 
 
 
Exercised
 
(261,763)
 
 
0.50
 
 
 
$
348,352
 
Outstanding at December 31, 2012
 
746,635
 
$
2.06
 
1.66 years
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted
 
135,000
 
 
0.39
 
 
 
 
 
 
Forfeited or expired
 
(400,949)
 
 
1.89
 
 
 
 
 
 
Exercised
 
(153,200)
 
 
0.46
 
 
 
 
 
 
Outstanding at December 31, 2013
 
327,486
 
$
2.31
 
2.42 years
 
$
12,100
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at December 31, 2013
 
212,236
 
$
3.33
 
1.52 years
 
$
-
 
 
There were 135,000 and no options granted in the years ended December 31, 2013 and 2012.
 
The following is a summary of stock options as of December 31, 2013: 
 
 
 
Options Outstanding
 
Options Exercisable
 
 
 
 
 
 
 
Weighted
 
 
 
 
Weighted-
 
 
 
 
 
Weighted-
 
average
 
 
 
 
average
 
 
 
Number of
 
average
 
Exercise
 
Number of
 
 
Exercise
 
Range of  Exercise Prices
 
Options
 
Remaining Life
 
Price
 
Options
 
 
Price
 
$0.39 to $1.00
 
110,000
 
1.42
 
years
 
$
0.13
 
-
 
 
$
-
 
$1.01 to $3.00
 
110,636
 
0.27
 
years
 
$
0.50
 
105,386
 
 
$
0.73
 
$3.01 to $5.00
 
25,000
 
0.32
 
years
 
$
0.28
 
25,000
 
 
$
0.43
 
$5.01 to $5.64
 
81,850
 
0.40
 
years
 
$
1.41
 
81,850
 
 
$
2.17
 
 
 
327,486
 
2.42
 
years
 
$
2.31
 
212,236
 
 
$
3.33
 
 
The weighted-average fair value of the options granted during the years ended December 31, 2013 and 2012 is $0.39 and $0 respectively.
 
As of December 31, 2013, the Company had 2,548,087 options available for future grant under the existing Stock Option and Equity Incentive Plans.
 
As of December 31, 2013, there was $41,700 of total unrecognized compensation cost, net of estimated forfeitures, related to all unvested stock options and restricted stock, which is expected to be recognized over a weighted average period of approximately 3.17 years.
 
Share based compensation expense for the years ended December 31, 2013 and 2012 is as follows:
 
 
 
Years Ended December 31,
 
 
 
2013
 
2012
 
Compensation cost recognized:
 
 
 
 
 
 
 
Stock options
 
$
19,053
 
$
52,677
 
Restricted stock
 
 
0
 
 
0
 
 
 
$
19,053
 
$
52,677
 
 
Share based compensation is included in operating expenses as follows:
 
 
 
Years Ended December 31,
 
 
 
2013
 
2012
 
Selling
 
$
499
 
$
9,216
 
General and administrative
 
 
6,467
 
 
16,788
 
Research and development
 
 
12,087
 
 
26,673
 
 
 
$
19,053
 
$
52,677
 
 
The Company capitalized $0 in share-based compensation cost in both years 2013 and 2012. 
 
The Company has a net operating loss carry-forward as of December 31, 2013, and no excess tax benefits for the tax deductions related to share based awards were recognized in the statements of operations. Additionally, no incremental tax benefits were recognized from stock options exercised in 2013 that would have resulted in a reclassification to reduce net cash provided by operating activities with an offsetting increase in net cash provided by financing activities.
 
All stock options have been issued with an exercise price that is equal or above the fair market value of the Company’s Common Stock on the date of grant.
 
Warrants
 
All previously granted warrants were issued with an exercise price that was equal to or above the fair market value of the Company’s common stock on the date of grant.  As of December 31, 2013, the Company had no remaining warrants outstanding.  No warrants were exercised in 2013 or 2012.