Stock Options, Awards and Warrants

9 Months Ended

Sep. 30, 2012

Stock Options Awards and Warrants [Abstract]

Stock Options Awards and Warrants [Text Block]

Note 6: Stock Options, Awards and Warrants

The Company initially raised $4,775,000 of capital by selling to its founders investment units consisting of one share of common stock and a fully detachable warrant equal to .25 shares of common stock per unit. The warrants were issued in recognition of the financial and organizational risk undertaken by the purchasers in the organizational offering. The warrants are immediately exercisable and will expire ten (10) years from the date of issuance on August 8, 2014. As of September 30, 2012 there have not been any exercises of these warrants and the Company has outstanding warrants to purchase 119,376 shares at the price of $10.00 per share.

The Company’s stock incentive plans provide for awards of nonqualified and incentive stock options as well as vested and non-vested common stock awards. Employee stock options can be granted with exercise prices at the fair market value (as defined within the plan) of the stock at the date of grant and with terms of up to ten years. Except as otherwise permitted in the plan, upon termination of employment for reasons other than retirement, permanent disability or death, the option exercise period is reduced or the options are canceled.

Stock options and stock awards may also be granted to non-employee members of the Board of Directors as compensation for attendance and participation at meetings of the Board of Directors and meetings of the various committees of the Board. The Company previously maintained an Advisory Board, for which non-employee members were compensated via stock options for meeting attendance. These nonqualified stock options can be granted with terms up to ten years, vest immediately, and are fully exercisable at time of grant. Stock awards granted to directors are based on the fair value of the awards, which is generally the market price of the common stock on the measurement date, and vest immediately. For the nine months ended September 30, 2012 the Company’s granted 6,211 shares of stock to directors as compensation for their service.

The following table summarizes the Company’s stock option activity and related information for the period ended:

	Unaudited
	September 30, 2012
			Weighted
			Average
			Exercise
	Shares		Price
Balance at January 1, 2012		395,351	$	11.16
Granted		-		-
Exercised		-		-
Forfeited
Balance at September 30, 2012		395,351	$	11.16
Exercisable at September 30, 2012		394,751	$	11.17
Weighted average fair value of options granted during the year			$	-

The intrinsic value of a stock option is the amount that the market value of the underlying stock exceeds the exercise price of the option. Based upon a fair market value of $7.15 at September 30, 2012 the options outstanding had no aggregate intrinsic value. There have not been any exercises of options during the first nine months of 2012.