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Stockholders' Deficit
 12 Months Ended
Dec. 31, 2011
Stockholders' Deficit [Abstract]  
Stockholders' Deficit

NOTE R – STOCKHOLDERS' DEFICIT

Common Stock

During June 2011, we completed a public offering of 5,520,000 shares of our common stock at $3.05 per share, before underwriting discounts and commissions. This offering was conducted pursuant to an effective shelf registration statement, which is on file with the Securities and Exchange Commission.

During the three-month period ended June 30, 2011, we issued 46,000 shares of common stock to two accredited investors upon conversion of 46,000 outstanding warrants.

During our annual meeting of stockholders on June 1, 2011, an amendment to our Articles of Incorporation to increase the number of authorized shares of common stock from 100,000,000 to 150,000,000 was approved by the stockholders.

During the three-month period ended March 31, 2011, we issued 56,000 shares of common stock to two accredited investors upon exercise of 56,000 outstanding warrants.

On May 6, 2010, we issued 1,300,000 shares of common stock to one institutional investor upon conversion of 13 outstanding shares of our Series E Convertible Preferred Stock. This conversion was completed in accordance with the original terms of the Series E Convertible Preferred Stock.

On April 20, 2010, we issued 600,000 shares of common stock to one institutional investor upon conversion of 600,000 outstanding shares of our Series D Convertible Preferred Stock. This conversion was completed in accordance with the original terms of the Series D Convertible Preferred Stock.

On March 18, 2010, we issued 600,000 shares of common stock to one institutional investor upon conversion of 600,000 outstanding shares of our Series D Convertible Preferred Stock. This conversion was completed in accordance with the original terms of the Series D Convertible Preferred Stock.

On February 12, 2010, we issued 500,000 shares of common stock to one institutional investor upon conversion of 500,000 outstanding shares of our Series D Convertible Preferred Stock. This conversion was completed in accordance with the original terms of the Series D Convertible Preferred Stock.

During January 2010, we entered into individual purchase agreements with certain investors pursuant to which we sold an aggregate of 4,000,000 shares of Odyssey's common stock and warrants to purchase up to 2,400,000 shares of common stock to such investors. The common stock and warrants were sold as units, with each unit consisting of one share of common stock and a warrant to purchase 0.6 shares of common stock. The purchase price for each unit was $1.565. The warrants have an exercise price of $2.25 per share of common stock and are exercisable in accordance with their terms at any time on or before the close of business on January 29, 2013. The net proceeds to us from the registered direct public offering, after deducting placement agent fees and offering expenses were approximately $6.1 million.

 

Convertible Preferred Stock

We have 206,400 shares of Series D Convertible Preferred Stock issued and outstanding as well as the 1 share of Series G Preferred Stock described in Note Q. Series D is convertible into common stock at a ratio of 1 to 1. The liquidation preference for Series D is $3.50 per share of common stock into which the Series D could then be converted. There are no other rights attached to these convertible instruments.

Stock-Based Compensation

We have two active stock incentive plans, the 1997 Stock Incentive Plan and the 2005 Stock Incentive Plan. The 1997 Stock Incentive Plan expired on August 17, 2007. As of that date, options cannot be granted from that Plan but any granted and unexercised options will continue to exist until exercised or they expire. The 2005 Stock Incentive Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units and stock appreciation rights. We initially reserved 2,500,000 of our authorized but unissued shares of common stock for issuance under the Plan, and, at the time the Plan was adopted, not more than 500,000 of these shares could be used for restricted stock awards and restricted stock units. On January 16, 2008, the Board of Directors approved amendments to the Plan to add 2,500,000 shares of common stock to the Plan, to allow any number of shares to be used for restricted stock awards, to clarify certain other provisions in the Plan and to submit the amended Plan for stockholder approval. The amended Plan was approved at the annual meeting of stockholders on May 7, 2008. On June 3, 2010, the shareholders' approved an amendment to the 2005 Stock Incentive Plan which resulted in the addition of 3,000,000 shares of common stock to the Plan. Any incentive option and non-qualified option granted under the Plan must provide for an exercise price of not less than the fair market value of the underlying shares on the date of grant, but the exercise price of any incentive option granted to an officer, director or eligible employee owning more than 10% of our outstanding common stock must not be less than 110% of fair market value on the date of the grant.

Share-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest. As share-based compensation expense recognized in the statement of operations is based on awards ultimately expected to vest, it can be reduced for estimated forfeitures. The ASC topic Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The share based compensation charged against income for the periods ended December 31, 2011, 2010 and 2009 was $1,796,628, $2,137,136 and $2,027,340, respectively.

The weighted average estimated fair value of stock options granted during the fiscal years ended December 31, 2011, 2010 and 2009 were $2.74, $0.92 and $1.53, respectively. These amounts were determined using the Black-Scholes option-pricing model, which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, the expected dividend payments, and the risk-free interest rate over the life of the option. The assumptions used in the Black-Scholes model were as follows for stock options granted in the years ended December 31, 2011, 2010 and 2009:

 

     2011   2010   2009

Risk-free interest rate

    1.51-1.89%   .56-.67%   1.1-2.0%

Expected volatility of common stock

    69.0-70.0%   68.8-70.5%   61-63%

Dividend yield

    0%   0%   0%

Expected life of options

    3.0-4.1 years   3-3.3 years   3-4 years

The Black-Scholes option valuation model was developed for estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Because option valuation models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. Our options do not have the characteristics of traded options; therefore, the option valuation models do not necessarily provide a reliable measure of the fair value of our options.

Additional information with respect to both plans stock option activity is as follows:

 

     Number of
Shares		     Weighted Average
Exercise Price		  

Outstanding at December 31, 2008

      2,528,666      $ 4.25   

Granted

      1,546,420      $ 3.53   

Exercised

      (2,500 )    $ 2.50   

Cancelled

      (340,750 )    $ 4.86   
  

 

 

    

Outstanding at December 31, 2009

      3,731,836      $ 3.89   

Granted

      271,500      $ 2.12   

Exercised

      —        $ —     

Cancelled

      (466,100 )    $ 3.87   
  

 

 

    

Outstanding at December 31, 2010

      3,537,236      $ 3.78   

Granted

      633,835      $ 2.74   

Exercised

      —        $ —     

Cancelled

      (771,666 )    $ 3.50   
  

 

 

    

Outstanding at December 31, 2011

      3,399,405      $ 3.65   
  

 

 

    

Options exercisable at December 31, 2009

      2,669,844      $ 3.87   
  

 

 

    

Options exercisable at December 31, 2010

      3,032,194      $ 3.78   
  

 

 

    

Options exercisable at December 31, 2011

      2,926,930      $ 3.79   
  

 

 

    

 

The aggregate intrinsic values of options exercisable for the fiscal years ended December 31, 2011, 2010 and 2009 were $133,750, $106,000 and $0, respectively. The aggregate intrinsic values of options outstanding for the fiscal years ended December 31, 2011, 2010 and 2009 were $169,500, $180,360 and $0, respectively. The aggregate intrinsic values of options exercised during the fiscal years ended December 31, 2011, 2010 and 2009 are $0, $0 and $4,625, respectively, determined as of the date of the option exercise. Aggregate intrinsic value represents the positive difference between our closing stock price at the end of a respective period and the exercise price multiplied by the number of relative options. The total fair value of shares vested during the fiscal years ended December 31, 2011, 2010 and 2009 was $1,145,112, $1,286,522 and $1,914,702, respectively.

As of December 31, 2011, there was $711,574 of total unrecognized compensation cost related to unvested share-based compensation awards granted to employees under the option plans. That cost is expected to be recognized over a weighted-average period of 1.86 years.

The following table summarizes information about stock options outstanding at December 31, 2011:

Stock Options Outstanding

 

Range of Exercise Prices

    Number of
Shares
Outstanding		      Weighted  Average
Remaining
Contractual
Life  in Years		      Weighted
Average
Exercise
Price		  

$1.00 - $3.00

      905,335         3.49       $ 2.55   

$3.01 - $4.00

      1,744,070         1.77       $ 3.52   

$4.01 - $7.00

      750,000         .91       $ 5.27   
  

 

 

     

 

 

     

 

 

  
     3,399,405         2.04       $ 3.65   
  

 

 

     

 

 

     

 

 

  

The estimated fair value of each restricted stock award is calculated using the share price at the date of the grant. A summary of the status of the restricted stock awards as of December 31, 2011 and changes during the year ended December 31, 2011 is presented as follows:

 

     Number of
Shares		     Weighted Average
Grant Date Fair
Value		  

Unvested at December 31, 2010

      279,799      $ 1.50   

Granted

      338,277      $ 2.67   

Vested

      (508,536 )    $ 2.03   

Cancelled

      —        $ —     
  

 

 

    

Unvested at December 31, 2011

      109,540      $ 2.65   
  

 

 

    

 

The fair value of restricted stock awards vested during the years ended December 31 2011, 2010 and 2009 was $1,329,573, $1,234,465 and $178,290, respectively. The fair value of unvested restricted stock awards remaining at the periods ended December 31, 2011, 2010 and 2009 is $300,139, $777,839 and $115,143, respectively. The weighted-average grant date fair value of restricted stock awards granted during the periods ended December 31, 2011, 2010 and 2009 were $2.67, $1.45 and $2.72, respectively. The weighted-average remaining contractual term of these restricted stock awards at the periods ended December 31, 2011, 2010 and 2009 are 1.0, .98 and 1.0 years, respectively. As of December 31, 2011, there was a total of $290,281 unrecognized compensation cost related to unvested restricted stock awards.

The following table summarizes our common stock warrants outstanding at December 31, 2011:

 

Common Stock
Warrants		      Exercise
Price		      Termination
Date		  
  100,000       $ 5.25         —    (A) 
  2,298,000       $ 2.25         1/31/2013   
  270,000       $ 2.25         8/20/2013   
  1,800,000       $ 2.50         10/11/2013  (B) 
  525,000       $ 2.75         4/13/2014   
  1,302,083       $ 4.32         11/9/2016   

 

 

        
  6,295,083         

 

 

        

 

(A): There were 100,000 Common Stock Warrants outstanding at December 31, 2009. These warrants were issued during the quarter ended September 30, 2005 at an exercise price of $5.25 per share to a vendor for services relating to a marketing program. These warrants become vested and earned based upon future performance of the program, and may not be exercised until vested and earned, therefore expense will not be recorded until the warrants are vested and earned. The warrants have a two-year exercise period commencing on the date when the warrants would be vested and earned. At December 31, 2010 these warrants have not been earned nor have they commenced with vesting.
(B): See NOTE Q.