Stock Based Compensation

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Based Compensation

7. Stock Based Compensation

The Company’s stock-based compensation program is designed to attract and retain employees while also aligning employees' interests with the interests of its stockholders. Stock options have been granted to employees under the stockholder-approved 2007 Key Person Stock Option Plan (“2007 Plan”) or the stockholder-approved 2014 Stock Incentive Plan (“2014 Plan”). Following stockholder approval of the 2014 Plan, the Company will no longer grant equity awards under the 2007 Plan. Stock-based compensation expense for the three months ended September 30, 2014 and 2013 was $178 and $0, respectively. Stock-based compensation expense for the nine months ended September 30, 2014 and 2013 was $178 and $141, respectively. As of September 30, 2014, 0 shares of an aggregate total of 407,500 shares were available for future stock-based compensation grants under the 2007 Plan and 450,000 shares of an aggregate total of 450,000 shares were available for future stock-based compensation grants under the 2014 Plan.

The Company accounts for its employee stock options under the fair value method of accounting using a Black-Scholes valuation model to measure stock option expense at the date of grant. All stock option grants have an exercise price equal to the fair market value of the Company’s common stock on the date of grant and generally have a 10-year term. The fair value of stock option grants is amortized to expense over the vesting period. The grant date fair value of the 2014 stock options granted under the 2007 Plan were immediately expensed as the options were fully vested upon the grant date.

The Company’s weighted-average Black-Scholes fair value assumptions for 2014 are as follows:

	2014
Expected Life in years		5
Risk free interest rate		1.67	%
Expected volatility		82.8	%
Expected dividend yield		0.0	%

The expected life is the period over which its employee groups are expected to hold their options. The risk-free interest rate is based on the expected U.S. Treasury rate at the time of grant. Volatility reflects movements in the stock price of comparable companies over the most recent historical period equivalent to the expected life. Dividend yield is estimated over the expected life based on our stated dividend policy.

A summary of the Company’s stock-based compensation activity for the nine months ended September 30, 2014 is presented below:

				Weighted Average
	Options			Exercise Price		Remaining Contractual Term  (in years)		Intrinsic Value
Outstanding at December 31, 2013		337,500		$	0.52
Granted		70,000		$	3.85
Exercised		(1,200	)	$	0.52
Forfeited/expired		-		$	-
Outstanding and Exercisable at September 30, 2014		406,300		$	1.09		6.17	$	844,113

As of September 30, 2014, there was $0 of total unrecognized compensation cost related to non-vested share-based compensation grants. There were no share-based compensation grants in 2013.