Stock-Based Compensation

3 Months Ended

Mar. 31, 2014

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 7:  Stock-Based Compensation

From time to time, the Company grants stock option awards to officers and employees under the 2010 Stock Incentive Plan ("the Plan") which, as amended, provides us with the ability to issue options on up to 1,000,000 common shares. At March 31, 2014, the Company had 566,590 outstanding options issued under the plan.

Such awards are valued based on the grant date fair value of the instruments, net of estimated forfeitures, using a Black-Scholes option pricing model with the following assumptions:

	Three Months Ended March 31,
	2014			2013
Volatility		73	%		-
Risk-free interest rate		1.93	%		-
Expected term		6.25			-

The volatility used was based on historical volatility of similar sized companies due to lack of historical data of the Company's stock price. The risk free interest rate was determined based on treasury securities with maturities equal to the expected term of the underlying award. The expected term was determined based on the simplified method outlined in Staff Accounting Bulletin No. 110.

Stock option awards are expensed on a straight-line basis over the requisite service period.  The Company recognized expense of $151,052 and $36,029, for the three months ended March 31, 2014 and March 31, 2013, respectively. At March 31, 2014, future stock compensation expense (net of estimated forfeitures) not yet recognized was $900,645 and will be recognized over a weighted average remaining vesting period of 3.16 years.  The following summarizes stock option activity for the three months ended March 31, 2014:

								Weighted
				Weighted		Weighted		Average
				Average		Average		Remaining
	Number of			Exercise		Fair		Contractual
	Shares			Price		Value		Life
Outstanding at December 31, 2013		627,307		$	4.83	$	2.92
Granted at market price		76,000			7.50
Exercised		(45,567	)		0.47
Forfeited		(89,150	)		6.79
Outstanding at March 31, 2014		556,590			5.17		3.13		8.9
Exercisable		135,215		$	5.37	$	3.06		8.2

The outstanding shares at December 31, 2013 were adjusted to reflect options that were issued but not included in the prior periods tables.  This does not impact stock compensation expense.

The following table summarizes information about the Company's stock options at March 31, 2014:

	Exercisable				Unexercisable				Total
			Weighted				Weighted				Weighted
	Number		Average		Number		Average		Number		Average
Range of Exercise Prices	Outstanding		Exercise Price		Outstanding		Exercise Price		Outstanding		Exercise Price
$1.25 per share		20,450	$	1.25		11,150		1.25		31,600	$	1.25
$4.95 per share		46,375		4.95		88,625		4.95		135,000	$	4.95
$5.00 per share		24,490		5.00		274,200		5.00		298,690	$	5.00
$5.15 per share		-	$	5.15		25,000		5.15		25,000	$	5.15
$7.50 per share		2,500	$	7.50		16,000		7.50		18,500	$	7.50
$7.95 per share		41,400	$	7.95		16,400		7.95		57,800	$	7.95

The intrinsic value of the Company's stock options outstanding was $1,792,520 at March 31, 2014.