Note 11 - Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

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. STOCKHOLDERS' EQUITY

a) Stock Option Plan

In connection with its 2007 Director Non-Qualified Stock Option Plan for non-employee directors, there are outstanding options to purchase our common stock. The plan provides for the granting of non-qualified options at the discretion of the Compensation Committee of the Board of Directors. Options are granted at the fair market value of the underlying common stock at the date of grant and vest after six months. We have reserved 100,000 shares of common stock for issuance under this plan.

All options expire ten years from date of grant and are exercisable at any time after vesting. Of the 100,000 shares available for issuance, there are 21,400 un-optioned shares available for future grants.

A summary of stock option transactions for the years ended December 31, 2015, 2014, and 2013, is as follows:

	20 15					20 14					20 13
				Weighted					Weighted					Weighted
				Average					Average					Average
	Option			Exercise		Option			Exercise		Option			Exercise
	Shares			Price		Shares			Price		Shares			Price
Outstanding at January 1		72,400		$	5.16		84,600		$	5.04		121,600		$	4.53
Granted		-			-		-			-		12,000			6.87
Forfeited or expired		(2,000	)		4.96		-			-		-			-
Exchanged		-			-		-			-		-			-
Exercised		(2,000	)		4.96		(12,200	)		4.32		(49,000	)		4.23
Outstanding at December 31		68,400		$	5.17		72,400		$	5.16		84,600		$	5.04
Exercisable at end of year		68,400		$	5.17		72,400		$	5.16		84,600		$	5.04
Weighted-average fair value of options granted during year		n/a					n/a				$	0.97

The following table summarizes outstanding options into groups based upon exercise price ranges at December 31, 2015:

			Options Outstanding						Options Exercisable
					Weighted		Weighted				Weighted		Weighted
					Average		Average				Average		Average
			Option		Exercise		Maturity		Option		Exercise		Maturity
Exercise Price Range			Shares		Price		(Years)		Shares		Price		(Years)
$4.27	to	$4.41		23,400	$	4.39		5.01		23,400	$	4.39		5.01
$4.80	to	$4.96		12,000		4.80		5.28		12,000		4.80		5.28
$5.30	to	$6.87		33,000		5.86		6.35		33,000		5.86		6.35
				68,400	$	5.17		5.70		68,400	$	5.17		5.70

Other information pertaining to option activity during the twelve month periods ended December 31, 2015, 2014, and 2013 are as follows:

	2015		2014		2013
Weighted average grant-date fair value of stock options granted		n/a		n/a	$	0.97
Total fair value of stock options vested		n/a		n/a	$	11,686
Total intrinsic value of stock options exercised	$	2,953	$	14,816	$	113,790

As of December 31, 2015, there was no unrecognized compensation cost related to non-vested stock options.

Cash received from the exercise of stock options for the years ended December 31, 2015, 2014, and 2013 was $9,920, $52,722 and $113,800, respectively.

The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model (BSM) with the following weighted-average assumptions:

	201 5		2014		2013
Volatility		n/a		n/a		19.1	%
Expected option life		n/a		n/a		3
Interest rate (risk free)		n/a		n/a		0.80	%
Dividends		n/a		n/a	None

The assumptions are evaluated and revised, as necessary, to reflect market conditions and our experience. Compensation expense is recognized only for those options expected to vest, with forfeitures estimated at the date of grant based on our historical experience and future expectations.

We also have a restricted stock plan that was adopted by our Board of Directors in January 2013 and approved by our stockholders in June 2013. The plan reserves up to 300,000 shares of our common stock for restricted stock awards to our executive officers, non-employee directors, and other key employees. Awards granted under the plan may be stock awards or performance awards, and may be subject to a graded vesting schedule with a minimum vesting period of four years. The fair value of nonvested restricted common stock awards is the market value of our common stock on the date of grant. Compensation costs for these awards will be recognized on a straight-line basis over the four year vesting period. No awards were made in 2013.

In February 2014, our Chief Executive Officer, Chief Financial Officer, and Senior Vice President were awarded restricted stock grants consisting of 9,375 shares each. In addition, four of our independent directors were awarded restricted stock grants consisting of 1,619 shares each. We recognized share based compensation expense of $67,818 for the year ended December 31, 2014 as a component of operating expenses.

In February 2015, our Chief Executive Officer, Chief Financial Officer and Senior Vice President were awarded restricted stock grants consisting of 9,344 shares each. In addition, four of our independent directors were awarded restricted stock grants consisting of 1,613 shares each. We recognized share based compensation expense of $145,321 for the year ended December 31, 2015 as a component of operating expenses.

A summary of the activity for nonvested restricted common stock awards as of December 31, 2015 and 2014 is as follows:

	Shares			Grant Fair Value
Balance, January 1, 2014		-			-
Granted		34,601		$	8.96
Forfeited		-			-
Vested		-			-
Balance, December 31, 2014		34,601		$	8.96
Balance, January 1, 2015		34,601		$	8.96
Granted		34,484			8.99
Forfeited		-			-
Vested		(8,652	)		8.96
Balance, December 31, 2015		60,433			8.97

As of December 31, 2015 and 2014, there was unrecognized compensation cost related to non-vested restricted stock awards of $406,897 and $242,207 which will be recognized in each of the following years as follows:

2016	$	155,009
2017		155,009
2018		87,191
2019		9,688

Of the 300,000 shares available for issuance, there are 230,915 shares available for future awards.

b) Cash Dividend

On June 9, 2014, our Board of Directors authorized a $0.25 per share special one-time cash dividend to be paid to stockholders of record at the close of business on July 7, 2014. The cash dividend, totaling approximately $2.5 million, was paid to stockholders on August 8, 2014.

Our Board will determine future cash dividends after giving consideration to our then existing levels of profit and cash flow, capital requirements, current and forecasted liquidity, as well as financial and other business conditions existing at the time.

c) Stockholder Rights Plan

On June 6, 2013, our Board of Directors authorized and declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of our common stock, par value $0.0024 per share, to stockholders of record at the close of business on June 16, 2013. Each Right entitles the registered holder to purchase from us one one-thousandth of a newly created series of preferred stock at an exercise price of $30.00 per right. The Rights are exercisable in the event any person or group acquires 20% or more of our outstanding common stock (an “Acquiring Person”), or commences a tender offer or exchange offer that would result in such person becoming an Acquiring Person. An exception is included in the Rights Plan in order to ensure that certain owners are not by virtue of their share ownership automatically deemed to be an Acquiring Person upon adoption of the plan unless any such owner subsequently accrues additional shares of our common stock and after giving effect to such acquisition owns 20% or more of our outstanding common stock.

The Rights will expire at 5:00 P.M. Eastern on June 6, 2016,unless such date is advanced or extended or unless the Rights are earlier redeemed or exchanged by our Board.

d) Share Repurchase Program

In August 2015, our Board authorized a share repurchase program where we may repurchase up to 1.2 million shares of our common stock through August 2016. Subsequently, we have repurchased approximately 529,000 shares of our stock, at an average price of $7.01, totaling $3.7 million for the year ended December 31, 2015. There were no stock repurchases in 2014 or 2013.