Note 3 - Stock-based Compensation

6 Months Ended

Jun. 30, 2017

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

Stock-based Compensation

– At

June 30, 2017,

we have

three

stock-based compensation plans in effect. We record compensation cost related to unvested stock awards by recognizing the unamortized grant date fair value on a straight line basis over the vesting periods of each award. We have estimated forfeiture rates based on our historical experience. Stock option compensation expense for the

three

and

six

month periods ended

June 30, 2017

and

2016

has been recognized as a component of general and administrative expenses in the accompanying Consolidated Financial Statements. We recorded

$14,000

and

$5,000

of stock-based compensation expense for the

three

months ended

June 30, 2017

and

2016,

respectively, and

$27,000

and

$10,000

for the

six

months ended

June 30, 2017

and

2016,

respectively.

As of

June 30, 2017,

there is

$105,000

of unrecognized compensation cost related to stock options. During the quarter ended

June 30, 2017,

an aggregate of

12,000

options were granted to

three

independent members of our board of directors pursuant to the

2011

Non-Employee Director Option Plan (Director Plan). Pursuant to the terms of the Director Plan, the options were granted at fair value on the date of the Annual Shareholders meeting. During the

three

and

six

months ended

June 30, 2017,

60,000

options were exercised and

12,000

options expired unexercised. The following table summarizes options as of

June 30, 2017:

	# of Shares		Wgt Avg Exercise Price		Wgt Avg Remaining Contractual Life in Years		Aggregate Intrinsic Value
Outstanding at June 30, 2017		244,500	$	2.17		5.5	$	341,000
Vested and exercisable at June 30, 2017		196,500	$	1.76		4.5	$	341,000

The estimated fair value of options granted is calculated using the Black-Scholes option pricing model with assumptions as previously disclosed in our

2016

Form

-K.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the company’s closing stock price on the last trading day of the

second

quarter of

2017

and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on

June 30, 2017.

The amount of aggregate intrinsic value will change based on the market value of the company’s stock.