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Stockholders' Equity | 6 Months Ended
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Jun. 30, 2016
Stockholders' Equity [Abstract] |
STOCKHOLDERS' EQUITY |
12. | STOCKHOLDERS’ EQUITY
On October 28, 2015, we filed a registration statement on Form S-3 with the SEC for the potential issuance of up to $10,000,000 in equity (subject to certain limitations). This registration statement became effective on November 10, 2015. Under this form of registration statement, we were limited to raising gross proceeds of no more than one-third of the market capitalization of our common stock (as determined by the high price within the preceding 60 days leading up to a sale of securities) held by non-affiliates (non-insiders) of the Company within a twelve-month period. This limit was approximately $5,958,000, based on the closing price of $8.08 per share as of January 6, 2016. On February 3, 2016, we sold 1,123,810 shares of common stock at a price to the public of $5.25 per share in an underwritten public offering, raising gross proceeds of approximately $5,900,000, resulting in net proceeds of approximately $5,313,000 (after deducting underwriting discounts and offering expenses) to the Company. At the June 15, 2016 Annual Meeting of Stockholders, our stockholders voted to approve an amendment to the Company’s Certificate of Incorporation to increase the number of shares of common stock authorized for issuance from 8,000,000 to 10,000,000. In June 2000, our stockholders approved the 2000 Stock Option and Incentive Plan (the “2000 Plan”) pursuant to the provisions of the Internal Revenue Code of 1986, under which employees and certain service providers may be granted options to purchase shares of the Company’s common stock at i) no less than fair market value on the date of grant in the case of incentive stock options and ii) no less than 85% of fair market value on the date of grant in the case of non-qualified stock options. Vesting requirements are determined by the Compensation and Stock Option Committee of the Board of Directors on a case by case basis. Originally, 250,000 shares of common stock were reserved for issuance under the 2000 Plan. The stockholders of the Company approved an increase in this number to 500,000 shares in June 2001. All options granted under the 2000 Plan expire no later than ten years from the date of grant. The 2000 Plan expired in February 2010, after which date no further options could be granted under the 2000 Plan. However, outstanding options under the 2000 Plan may be exercised in accordance with their terms. In June 2010, our stockholders approved the 2010 Stock Option and Incentive Plan (the “2010 Plan”) pursuant to the provisions of the Internal Revenue Code of 1986, under which employees and certain service providers may be granted options to purchase shares of the Company’s common stock at i) no less than fair market value on the date of grant in the case of incentive stock options and ii) no less than 85% of fair market value on the date of grant in the case of non-qualified stock options. At that time, 300,000 shares of common stock were reserved for issuance under the 2010 Plan. Vesting requirements are determined by the Compensation and Stock Option Committee of the Board of Directors on a case by case basis. All options granted under the 2010 Plan expire no later than ten years from the date of grant. Activity under the stock option plans described above was as follows:
|  | 2000 Plan |  |  | 2010 Plan |  |  | Weighted Average Exercise |  |  | Aggregate Intrinsic Value |
Outstanding at December 31, 2013 |  |  | 157,500 |  |  |  | 73,500 |  |  | $ | 3.30 |  |  | $ | 223,000 |
Grants |  |  | 0 |  |  |  | 25,000 |  |  | $ | 4.69 |  |  |  |  |
Terminations |  |  | 0 |  |  |  | (2,000 | ) |  | $ | 5.75 |  |  |  |  |
Exercises |  |  | 0 |  |  |  | (1,000 | ) |  | $ | 3.15 |  |  |  |  |
Outstanding at December 31, 2014 |  |  | 157,500 |  |  |  | 95,500 |  |  | $ | 3.42 |  |  | $ | 364,000 |
Grants |  |  | 0 |  |  |  | 16,000 |  |  | $ | 7.40 |  |  |  |  |
Terminations |  |  | 0 |  |  |  | (3,000 | ) |  | $ | 4.95 |  |  |  |  |
Exercises |  |  | (26,000 | ) |  |  | (2,000 | ) |  | $ | 4.29 |  |  |  |  |
Outstanding at December 31, 2015 |  |  | 131,500 |  |  |  | 106,500 |  |  | $ | 3.57 |  |  | $ | 945,000 |
Grants |  |  | 0 |  |  |  | 37,000 |  |  | $ | 6.77 |  |  |  |  |
Terminations |  |  | 0 |  |  |  | (4,000 | ) |  | $ | 6.60 |  |  |  |  |
Exercises |  |  | 0 |  |  |  | (1,000 | ) |  | $ | 3.15 |  |  |  |  |
Outstanding at June 30, 2016 |  |  | 131,500 |  |  |  | 138,500 |  |  | $ | 3.96 |  |  | $ | 793,000 |
Exercisable at June 30, 2016 |  |  | 131,500 |  |  |  | 40,500 |  |  | $ | 2.90 |  |  | $ | 689,000 |
Reserved for future grants |  |  | 0 |  |  |  | 156,500 |  |  |  |  |  |  |  |  |
During the six-month period ended June 30, 2016, one employee exercised stock options covering 1,000 shares. These options were exercised for cash, resulting in total proceeds of $3,150. During the year ended December 31, 2015, eleven employees exercised stock options covering the aggregate of 28,000 shares. These options were exercised for cash, resulting in total proceeds of $120,210. During the year ended December 31, 2014, one employee exercised stock options covering 1,000 shares. These options were exercised for cash, resulting in total proceeds of $3,149. At June 30, 2016, 270,000 shares of common stock were reserved for future issuance under all outstanding stock options described above, and an additional 156,500 shares of common stock were reserved for the potential issuance of stock option grants in the future under the 2010 Plan. The weighted average remaining life of the options outstanding under the 2000 Plan and the 2010 Plan as of June 30, 2016 was approximately four years and six months. The weighted average remaining life of the options exercisable under these plans as of June 30, 2016 was approximately two years and six months. The exercise prices of the options outstanding as of June 30, 2016 ranged from $1.70 to $7.54 per share. The 37,000 stock options granted during the first six months of 2016 had exercise prices between $6.70 and $6.93 per share. The 16,000 stock options granted during 2015 had exercise prices between $6.05 and $7.54 per share. The 25,000 stock options granted during 2014 had exercise prices between $4.25 and $4.80 per share. The aggregate intrinsic value of options exercised during 2016, 2015 and 2014 approximated $4,000, $110,000 and $1,000, respectively. The weighted-average grant date fair values of options granted during 2016, 2015 and 2014 were $3.57, $3.46 and $2.26 per share, respectively. As of June 30, 2016, total unrecognized stock-based compensation related to non-vested stock options aggregated $211,178. That cost is expected to be recognized at a declining rate through the second quarter of 2023 (the remaining vesting period of the outstanding non-vested stock options), including $41,476 during remainder of 2016. The fair value of each stock option grant has been estimated on the date of grant by an independent appraiser using the Black-Scholes option pricing model, for the purpose discussed in Note 2(n), with the following weighted-average assumptions for the three-month and six-month periods ended June 30, 2016 and for the years ended December 31, 2015 and 2014:
|  | 2016 |  |  | 2015 |  |  | 2014 |
Risk-free interest rate |  |  | 2.0 | % |  |  | 2.0 | % |  |  | 2.0 | %
Dividend yield |  |  | 0 | % |  |  | 0 | % |  |  | 0 | %
Expected volatility |  |  | 47 | % |  |  | 47 | % |  |  | 49 | %
Expected life |  |  | 6 years |  |  |  | 6 years |  |  |  | 6 years |
The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected option term, while the other assumptions are derived from averages of our historical data.

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