Note 12 - Stockholders' Equity

12 Months Ended

Dec. 31, 2011

Shareholders' Equity and Share-based Payments [Text Block]

NOTE 12 – Stockholders’ equity

On May 27, 2011, the Company completed a public offering of 967,950 shares of common stock at $10.50 per share. The net proceeds of $9,387,666 is being used for general corporate purposes, including working capital.

1989 Non-Qualified Stock Option Plan

On June 15, 1989, the Company instituted a non-qualified stock option plan (the “Plan”). In connection therewith, 700,000 shares of the Company’s common stock were reserved for issuance pursuant to options that may be granted under the Plan through June 30, 2009. All options granted vest over a four-year period and expire between five to seven years after the date of grant. In 2009, the Company did not grant any options under this Plan. This 1989 Non-Qualified Stock Option Plan expired in June 2009.

2001 Non-Qualified Stock Option Plan

In November 2006, the Company registered a non-qualified stock option plan that the shareholders had approved in July 2001, covering key employees, officers, directors and other persons that may be considered as service providers to the Company. Options were awarded by the Board of Directors or by a committee appointed by the Board. Under the plan, an aggregate of 300,000 shares of Company common stock, $.01 par value, were reserved for issuance or transfer upon the exercise of options which are granted. Unless otherwise provided in the option agreement, options granted under the plan would vest over a four year period commencing one year from the anniversary date of the grant. In 2011 and 2010, 14,000 and 26,550 options were granted to outside directors at exercise prices of $7.90 and $4.25 respectively, which vested as to 25% on each of January 15, April 15, July 15 and October 15 of each year. These options expire ten years after the date of grant. The stock option plan terminated on July 22, 2011.

In January 2010, the Company granted options to purchase 26,550 shares of its common stock to its outside directors pursuant to the Company’s Outside Director Compensation Plan, at an exercise price of $4.25 per share, the fair market value on the date of grant. Options vested as to 6,640 shares on January 15, 2010, 6,635 shares on April 15, 2010, 6,635 shares on July 15, 2010 and 6,640 shares on October 15, 2010. All options expire seven years after the date of grant.

2007 Share Incentive Plan

On December 12, 2007, shareholders approved the Company’s 2007 share Incentive Plan (“Incentive Plan”), in connection therewith, 750,000 shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the Incentive Plan through December 12, 2017. In 2010, 16,500 shares of the Company’s common stock were granted and issued to the Company’s five outside directors. In 2011, 40,400 shares of the Company’s common stock were granted and issued to directors and key employees. In December 2011, the company granted options to purchase 200 shares of its common stock to an outside director. These options expire ten years after the date of grant.

The purchase price of the common stock under each option plan shall be determined by the Committee, provided, however, that such purchase price shall not be less than the Fair Market Value of the Shares on the date such option is granted. The stock options generally expire seven to ten years after the date of grant. The Company recorded stock-based compensation of $290,598 and $172,490 for the years ended December 31, 2011 and 2010, respectively.

A summary of the stock option activity related to the 1989 and 2001 Stock Option Plans and the 2007 Share Incentive Plan for the period from January 1, 2010 through December 31, 2011 is as follows:

1989 Non-Qualified Stock Option Plan

	Beginning	Granted	Exercised	Canceled	Ending
	Balance	During	During	During	Balance
	Outstanding	Period	Period	Period	Outstanding	Exercisable
Year ended December 31, 2010
Number of shares	231,250	-0-	41,000	10,000	180,250	177,750
Weighted average exercise price
Per share	$3.52	-0-	-0-	-0-	$4.00	$3.97
Year ended December 31, 2011
Number of shares	180,250	-0-	78,250	-0-	102,000	102,000
Weighted average exercise price
Per share	$3.97	-0-	-0-	-0-	$4.35	$4.35

2001 Non-Qualified Stock Option Plan

	Beginning	Granted	Exercised	Canceled	Ending
	Balance	During	During	During	Balance
	Outstanding	Period	Period	Period	Outstanding	Exercisable
Year ended December 31, 2010
Number of shares	184,750	26,550	-0-	-0-	211,300	148,800
Weighted average exercise price
Per share	$3.99	$4.25	-0-	-0-	$4.02	$3.66
Year ended December 31, 2011
Number of shares	211,300	14,000	53,310	1,400	170,590	120,590
Weighted average exercise price
Per share	$4.02	$4.25	-0-	-0-	$4.41	$4.32

2007 Share Incentive Plan

	Beginning	Granted	Exercised	Canceled	Ending
	Balance	During	During	During	Balance
	Outstanding	Period	Period	Period	Outstanding	Exercisable

Year ended December 31, 2010
Number of shares	-0-	-0-	-0-	-0-	-0-	-0-
Weighted average exercise price
Per share
Year ended December 31, 2011
Number of shares	-0-	200	-0-	-0-	200	200
Weighted average exercise price
Per share		$11.51			$11.51	$11.51

The Company has 272,790 of outstanding stock options under the three Plans at December 31, 2011. None of these stock options were in excess of market value at December 31, 2011.

The following table summarizes information about the outstanding and exercisable options at December 31, 2011.

	Options Outstanding				Options Exercisable
		Weighted	Weighted			Weighted
		Average	Average			Average
Exercise	Number	Remaining	Exercise	Intrinsic	Number	Exercise	Intrinsic
Price Range	Outstanding	Contractual	Price	Value	Exercisable	Price	Value

$2.00-2.99	5,750	0.46	$2.26	$56,178	5,750	$2.26	$56,178
$3.00-3.99	72,000	5.95	$3.65	$603,360	72,000	$3.65	$603,360
$4.00-4.49	72,240	1.98	$4.14	$569,974	72,240	$4.14	$569,974
$4.50-4.99	100,000	5.78	$4.62	$741,000	50,000	$4.62	370,500
$5.00-5.99	10,000	2.08	$5.90	$61,300	10,000	$5.90	61,300
$6.00-7.99	12,600	9.04	$7.90	$52,038	12,600	$7.90	52,038
$8.00-11.99	200	10	$11.51	$104	200	$11.51	104

The intrinsic value of the 131,560 options exercised during the year ended December 31, 2011 was $1,522,715. The intrinsic value of the 41,000 options exercised during the year ended December 31, 2010 was $129,765.

During the years ended December 31, 2011 and 2010, the Company recorded into selling and general administrative expense approximately $291,000 and $172,000 for the cost of employee and director services received in exchange for equity instruments based on the grant-date fair value of those instruments in accordance with the provisions of ASC 718.

The fair value was estimated by using the Black-Scholes option-pricing model which took into account as of the grant date, the exercise price and the expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the expected term of the option.

	Risk-Free		Expected	Expected
Year ended	Interest Rate	Expected Life	Volatility	Dividends

December 31, 2010	2.4%	5 Years	60.66%	None
December 31, 2011	1.95%	5 Years	63.01%	None