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Note 2 - Stock-based Compensation
 9 Months Ended
Sep. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

2.     stock-based compensation


The Company accounts for compensation expense associated with stock options based on the fair value of the options on the date of grant.


The Company’s net income/(loss) for the three and nine months ended September 30, 2014 includes approximately $145,200 and $350,800, respectively, of non-cash compensation expense related to the Company’s stock options. The non-cash compensation expense related to all of the Company’s stock-based compensation arrangements is recorded as a component of selling, general and administrative expenses.


The estimated fair value of each option award granted was determined on the date of grant using the Black-Scholes option valuation model. No options were granted during the three months ended September 30, 2013 and 6,772 options were granted during the three months ended September 30, 2014. The following weighted-average assumptions were used for the options granted during the nine months ended September 30, 2014 and 2013:


   

2014

   

2013

 

Risk-free interest rate

    1.45%-1.64 %     0.76 %
                 

Expected volatility

    83%-102 %     106 %
                 

Dividend yield

    0 %     0 %
Expected option term (years)     5       5  

A summary of the status of the Company’s stock option plans as of September 30, 2014 and changes during the nine months ended September 30, 2014 is as follows:


      Options     

Weighted average ExercisePrice

   

Weighted average remaining contractualterm (in years)

   

Aggregate Intrinsic Value

 

Outstanding at beginning of period

    461,919     $ 9.80                  

Granted

    43,064       14.67                  

Exercised

    (130,000 )     9.00                  

Outstanding and vested at end of period

    374,983     $ 10.64       2.31     $ 432,747  

Options to acquire 36,292 shares of common stock were granted on January 1, 2014 to members of our board of directors as part of their normal compensation. Of the 36,292 options granted on January 1, 2014, 9,075 vested immediately, 9,073 vested on April 1, 2014, 9,073 vested on July 1, 2014 and 9,071 vest on October 1, 2014. Options to acquire 6,772 shares were granted on July 1, 2014 to a new board member as part of the normal compensation. Of the 6,772 options granted on July 1, 2014, 3,386 vested immediately and 3,386 vest on October 1, 2014.


During the nine months ended September 30, 2014, 50,000 stock options were exercised for cash resulting in proceeds to the Company of $447,751. During the same period 80,000 options were exercised, pursuant to provisions of the stock option plan, where the Company received no cash and 57,381 shares of its common stock in exchange for the 80,000 shares issued in the exercise. The 57,381 shares that the Company received were valued at $727,072, the fair market value of the shares on the dates of exercise.


The intrinsic value of all options exercised during the nine months ended September 30, 2014 and 2013 was approximately $513,000 and $26,300, respectively. No options were exercised during the three months ended September 30, 2014 and 2013.