Stock-Based Compensation

6 Months Ended

Jun. 30, 2014

GAAP requires that all stock-based compensation be recognized as an expense in the financial statements and that such costs be measured at the fair value of the award.

The Company has granted options/warrants to consultants. These awards generally vest ratably over 12 to 60 months from the date of grant and the Company charges to operations quarterly the current market value of the options using the Black-Scholes method. During the six months ended June 30, 2014 and 2013, a (benefit)/charge of ($79,889) and $17,510, respectively, and during the three months ended June 30, 2014 and 2013, ($580) and $18,703, respectively was recorded to operations reflecting the fair value of the options using the Black-Scholes method with the following weighted average assumptions:

	2014	2013
Risk free interest rate	1.2%	0.3%
Option Life	3.9 years	5.0 years
Volatility	52%	51%

The Company granted 80,200 fully vested options during the six months ended June 30, 2013 to employees and directors and recorded share-based compensation of $173,120. The Company valued these grants using the Black-Scholes option pricing model with the following assumptions:

	Risk free interest rate		0.8%
	Option Life		5 years
	Volatility		71%

The Company did not grant any stock options to employees and directors during the six months ended June 30, 2014.

In connection with the restricted stock grants to employees and directors, the Company charged $131,644 and $190,584 to operations during the three months ended June 30, 2014 and 2013, respectively and $263,287 and $732,288 was charged to operations during the six months ended June 30, 2014 and 2013, respectively. As of June 30, 2014, remaining unamortized compensation costs in connection with these restricted stock grants was $495,000 which will be recognized over the next 18 month period.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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