Stock Compensation

12 Months Ended

Dec. 31, 2014

Stock Compensation [Abstract]

STOCK COMPENSATION

NOTE 10 - STOCK COMPENSATION

Equity Incentive Plan

In November 2012, the Company’s stockholders approved the 2012 Equity Incentive Plan, (as amended, the “Plan”). On December 18, 2014, the Company’s stockholders approved a proposal to increase the number of shares of our common stock available for future issuance under the Plan to 550,000 shares. The Plan provides for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards. The Company believes that such awards better align the interests of its employees and directors with those of its shareholders. As of December 31, 2014, the maximum number of shares of common stock reserved for future grant of awards under the Plan was 212,920. The Company granted an aggregate of 30,000 options to purchase restricted common stock to certain directors prior to the adoption of the Plan. As of December 31, 2014, all options granted outside of the Plan have vested. As of December 31, 2014, options to purchase 337,080 shares of the Company's stock have been granted under the Plan.

The following table summarizes stock option activity for the years ended December 31, 2014 and 2013:

						Weighted
				Weighted		Average
	Shares			Average		Remaining
	Under			Exercise		Contractual
	Options			Price		Term (Years)
Balance at December 31, 2012		30,160		$	26.58
Options granted		202,200		$	14.58
Options exercised		-
Options forfeited		(40	)	$	10.00
Balance at December 31, 2013		232,320		$	16.14		8.98
Options granted		146,560			11.83
Options exercised		-			-
Options cancelled/forfeited		(11,800	)		8.09
Balance at December 31, 2014		367,080		$	14.68		8.50

At December 31, 2014 and 2013, the aggregate intrinsic value of exercisable options was $0 and $4, respectively. The aggregate intrinsic value is calculated by multiplying the number of outstanding and exercisable options by the excess of the market price for our common stock over the exercise price for each option. At December 31, 2014 and 2013, the market price for our common stock was $6.90 and $7.50, respectively.

The weighted average grant date fair value of stock options granted during 2014 and 2013 was $10.62 and $9.47, respectively. The following table summarizes the assumptions used to value stock options granted during 2014 and 2013 using a Black-Scholes model:

	2014			2013
Risk-free interest rate		1.63%-2.84%			1.80%-2.89%
Expected volatility		145%-151%			152%-166%
Weighted average expected volatility		148	%		163	%
Expected term (years)		5.63-10.0			10.0
Expected dividend yield		0	%		0	%

The risk-free rate is based on the U.S. Treasury rate for a note with a similar term in effect at the time of the grant. The expected volatility is based on the volatility of the Company’s historical stock prices.

The following table summarizes information about options outstanding and exercisable at December 31, 2014 that were granted under the Plan:

Options Outstanding						Options Exercisable
				Weighted Average						Weighted Average
Range of		Options		Remaining		Range of		Options		Remaining
Exercise Price		Outstanding		Contractual Life		Exercise Price		Exercisable		Contractual Life
$	7.00		5,000		7.39	$	7.00		5,000		7.39
$	8.60		30,500		9.20	$	8.60		7,625		9.20
$	10.00		9,320		8.06	$	10.00		7,653		8.06
$	11.00		3,000		8.03	$	11.00		1,500		8.03
$	12.10		30,500		9.36	$	12.10		7,625		9.36
$	12.50		106,200		8.46	$	12.50		58,509		8.43
$	12.55		20,000		9.39	$	12.55		-		-
$	13.00		14,600		9.53	$	13.00		3,650		9.53
$	13.45		2,000		9.48	$	13.45		-		-
$	13.50		14,960		9.49	$	13.50		-		-
$	13.75		6,000		9.68	$	13.75		-		-
$	17.50		100,000		8.11	$	17.50		50,000		8.11
$	22.50		5,000		6.62	$	22.50		5,000		6.62
$	32.00		15,000		6.53	$	32.00		15,000		6.53
$	34.50		5,000		6.56	$	34.50		5,000		6.56
			367,080						166,562

As of December 31, 2014, 166,562 options have vested and 200,518 options remain unvested.The vesting terms range from zero to 3.5 years and the vested options have a weighted average remaining term of 8.1 years and a weighted average exercise price of $14.75 per share.

Stock-based compensation was $1,691 and $1,335 for the years ended December 31, 2014 and 2013, respectively. The following table summarizes the components of stock-based compensation in the statements of operations for the years ended December 31, 2014 and 2013:

	2014		2013
Cost of sales	$	-	$	-
Research and development		123		8
Selling, general and administrative		1,568		1,327
Total stock-based compensation	$	1,691	$	1,335

The aggregate unrecognized compensation expense of options at December 31, 2014 was $1,092, which will be recognized through June 2018.

Restricted Stock Issuances

During the year ended December 31, 2014, the Company issued an aggregate of 13,200 shares of restricted common stock. All such shares were valued at trading prices on the date of issuance between $7.50 and $14.39 per share and are subject to certain vesting requirements. The compensation cost for unvested restricted stock, which is included in the stock-based compensation amounts indicated above, was $197 and $289 for the years ended December 31, 2014 and 2013, respectively.

The following table summarizes the activities in restricted stock awards granted (under the Plan) during the year ended December 31, 2014:

				Weighted
				Average
				Grant Date
	Shares			Share Price
Restricted stock awards unvested at December 31, 2012		35,700		$	16.21
Granted		26,780			7.39
Vested		(30,030	)		9.70
Forfeited		-			-
Restricted stock awards unvested at December 31, 2013		32,450		$	14.96
Granted		13,200			7.79
Vested		(13,450	)		13.86
Forfeited		(10,000	)		7.00
Restricted stock awards unvested at December 31, 2014		22,200		$	14.95

At December 31, 2014, the weighted-average remaining vesting period of unvested restricted stock awards was 1.92 years. The aggregate unrecognized compensation expense of unvested restricted stock at December 31, 2014 was $248, which will be recognized through February 2018.