FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Measurements and Financial Instruments [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Observable Inputs (Level 2)

Assets and liabilities measured at fair value on a recurring basis using significant observable inputs (Level 2) from January 1, 2013 to September 30, 2013 are summarized as follows:

	Warrant liability (Level 2)
Balance at January 1, 2013	$	354,000
Change in fair value included in earnings		65,000
Exercise of warrants		(64,000)
Balance at September 30, 2013	$	355,000

Fair Value of Warrants Using Black-Scholes Option Pricing Model

The Company estimated the fair value of its warrants as of September 30, 2013 and December 31, 2012 using the Black-Scholes option pricing model using the following assumptions:

	September 30, 2013		December 31, 2012
Series B Warrants
Market price of common stock:	$	4.980	$	4.390
Exercise price:		3.50		3.50
Remaining contractual life (years):		0.08		0.83
Dividend yield:		–		–
Expected volatility:		23.35%		51.41%
Risk-free interest rate:		0.02%		0.13%
Fair value – Series B Warrants	$	334,000	$	319,000
Underwriter Warrants
Market price of common stock:	$	4.980	$	4.390
Exercise price:		4.80		4.80
Remaining contractual life (years):		0.93		1.68
Dividend yield:		–		–
Expected volatility:		34.85%		61.26%
Risk-free interest rate:		0.08%		0.21%
Fair value – Underwriter Warrants	$	21,000	$	35,000
Fair value – Total	$	355,000	$	354,000

Warrant Exercises

During the nine months ended September 30, 2013, 28,348 warrants were exercised on a cashless basis to purchase 10,500 shares of common stock. In accordance with ASC 470-50-40, “Debt – Modification and Extinguishments – Derecognition”, an aggregate gain of $3,520 was recognized.  For details, please refer to the following table.

Exercise date:	May 22, 2013
Market price of common stock:	$	5.76
Exercise warrants:		28,348
Exercise price:	$	3.5
Remaining contractual life (years):		0.44
Dividend yield:		-
Expected volatility:		35.48	%
Risk-free interest rate:		0.07	%
Fair values:	$	2.2653
Gain on extinguishment of warrant liabilities	$	3,520

During the nine months ended September 30, 2012, 125,000 warrants were exercised on a cashless basis to purchase 48,402 shares of common stock. In accordance with ASC 470-50-40, “Debt – Modification and Extinguishments – Derecognition”, an aggregate gain of $73,291 was recognized.  For details, please refer to the following table.

Exercise date:	February 7, 2012
Market price of common stock:	$	6.44
Exercise warrants:		125,000
Exercise price:	$	3.5
Remaining contractual life (years):		1.73
Dividend yield:		-	%
Expected volatility:		39.43	%
Risk-free interest rate:		0.21	%
Fair values:	$	3.08
Gain on extinguishment of warrant liabilities	$	73,291