Note 11 - Stockholders' Equity

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

1

1

. STOCKHOLDERS' EQUITY

a) Stock Option Plan

We have

one

stock option plan that terminated in

March 2017.

This plan permitted annual stock option grants to non-employee directors with an exercise price equal to the fair market value of the shares at the date of grant. Options outstanding and exercisable were granted at a stock option price which was

not

less than the fair market value of our common stock on the date the option was granted and

no

option has a term in excess of

ten

years.

A summary of stock option transactions for the years ended Decem

ber

31

is as follows:

	201 7					201 6					201 5
				Weighted					Weighted					Weighted
				Average					Average					Average
	Option			Exercise		Option			Exercise		Option			Exercise
	Shares			Price		Shares			Price		Shares			Price
Outstanding at January 1		56,400		$	5.14		68,400		$	5.17		72,400		$	5.16
Granted		-			-		-			-		-			-
Forfeited or cancelled		(12,000	)		5.14		(12,000	)		5.30		(2,000	)		4.96
Exercised		(44,400	)		5.14		-			-		(2,000	)		4.96
Outstanding at December 31		-		$	-		56,400		$	5.14		68,400		$	5.17
Exercisable at end of year		-		$	-		56,400		$	5.14		68,400		$	5.17
Weighted-average fair value of options granted during year		n/a					n/a					n/a

Because we had

no

awards of stock options in

201

7,

2016

and

2015,

we were

not

required to record any compensation cost for stock options.

The intrinsic value of stock options exercised in

2017

and

201

5

was

$155,606

and

$2,953,

respectively. Cash received from the exercise of stock options for

2017,

2016,

and

2015

was

$223,404,

$ -

and

$9,920,

respectively.

We 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, unless otherwise determined by the committee that administers the plan.

A summary of the activity for non

-vested restricted common stock awards is as follows:

	Shares			Grant Fair Value
Balance, January 1, 2016		60,432		$	8.97
Granted		33,685			7.14
Forfeited		(8,187	)		8.97
Vested		(20,780	)		8.97
Balance, December 31, 2016		65,150		$	8.03
Balance, January 1, 201 7		65,150		$	8.03
Granted		9,005			8.05
Forfeited		(4,054	)		8.97
Vested		(33,300	)		8.97
Balance, December 31, 201 7		36,801		$	8.03

W

e recognized share based compensation expense of

$239,599,

$199,870,

and

$145,321

in

2017,

2016

and

2015,

respectively, as a component of operating expenses. As of

December 31, 2017,

there was unrecognized compensation cost related to non-vested restricted stock awards of

$174,314

which will be recognized in each of the following years as follows:

201 8	$	100,127
201 9		58,126
20 20		14,853
202 1		1,208

Of the

300,000

shares available for issuance, there are

188,225

shares available for future awards.

b) Cash Dividend

Our Board will determine future cash dividends after giving consideration to 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”

and collectively, the “Rights”) 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 entitled 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 were 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 was included in the Rights plan 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 accrued additional shares of our common stock and after giving effect to such acquisition owns

20%

or more of our outstanding common stock.

The Rights expired on

June 6, 2017.

d) Share Repurchase Program

In

August 2015,

our Board authorized a share repurchase program

pursuant to which we are authorized to repurchase up to

1.2

million shares of our common stock at prevailing market rates through

August 2016.

Subsequently, the program was amended to increase the number of shares available for repurchase from

1.2

million to

2.2

million and to extend the program through

August 2018.

In

2017,

there were

no

shares repurchased under this plan. At

December 31, 2017,

there are

1,150,793

shares available for repurchase under the plan.