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Note 16 - Stockholders' Equity | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Stockholders' Equity Note Disclosure [Text Block] |
16 . | Stockholders ’ Equity
Stock Options The Compensation Committee administers the stock-based plans. The exercise price for Incentive Stock Options (“ISO”) cannot be less than the fair value of the stock subject to the option on the grant date ( 110% of such fair value in the case of ISOs granted to a stockholder who owns more than 10% of the Company’s Common Stock). The exercise price of a Non-Qualified Stock Options (“NQSO”) shall be fixed by the Compensation Committee at whatever price the Committee may determine in good faith. Unless the Committee determines otherwise, options beginning with the 2009 Plan generally have a 4 -year term with a 3 -year vesting schedule. Unless the Committee provides otherwise, options terminate upon the termination of a participant’s employment, except that the participant may exercise an option to the extent it was exercisable on the date of termination and for a period of time after termination. Officers, directors and employees of, and consultants to the Company, or any parent or subsidiary corporation selected by the Committee, are eligible to receive options under the Plan. Subject to certain restrictions, the Committee is authorized to designate the number of shares to be covered by each award, the terms of the award, the date on which and the rates at which options or other awards may be exercised, the method of payment, vesting and other terms. The Company has applied the Black-Scholes model to value stock-based awards. That model incorporates various assumptions in the valuation of stock-based awards relating to the risk-free rate of interest to be applied, the estimated dividend yield and expected volatility of the Company ’s Common Stock. The risk-free rate of interest is the U.S. Treasury yield curve for periods within the expected term of the option at the time of grant. The expected volatility is based on historical volatility of the Company’s Common Stock. The valuation assumptions we have applied to determine the value of stock-based awards were as follows: Historical stock price volatility: The Company used the weekly closing price to calculate historical annual volatility. Risk-free interest rate: The Company bases the risk-free interest rate on the rate payable on US treasury securities in effect at the time of the grant, which varied between 1.4% and 2.20%. Expected life: The expected life of the option represents the period of time options are expected to be outstanding. The Company uses an expected life of 3.75 years. Dividend yield: The estimate for dividend yield is 0%, as the Company did not issue dividends during 2017 and does not expect to do so in the foreseeable future. Estimated forfeitures: When estimating forfeitures, the Company considers historical terminations as well as anticipated retirements. The Company, at the discretion of the board, may issue options in excess of the total available, if options related to that stock plan are cancelled. In some cases, not all shares that are available to a stock plan are issued, as the Company is unable to issue options to a previous plan when a new plan is in place. The Company ’s pre-tax income for the fiscal year ended December 31, 2017 and 2016 includes approximately $21,000 and $34,000, respectively, of compensation costs related to share-based payments. As of December 31, 2017, there is $364,000 of unrecognized compensation expense related to non-vested stock option grants. We expect approximately $172,000, $92,000, and $56,000 to be recognized during 2018, 2019, and 2020 respectively. On April 10, 2009, the Board of Directors approved for adoption, and on June 5, 2009, the shareholders of the Company approved the 2009 Stock Incentive Plan ( “2009 Plan”). The 2009 Plan authorizes the issuance of up to 510,000 shares of stock or options to purchase stock of the Company (including cancelled shares reissued under the plan.) As of December 31, 2017, 399,469 were outstanding, of which 26,788 were vested and 372,681 were not vested. Vesting is determined at time of grant, with some of the schedules used for the 2009 Plan as follows:
Vesting Schedule A | Vesting Schedule B | Vesting Schedule C | Vesting Schedule D
25% | 12 months | 33% | 24 months | 50% | 48 months | 20 % | 6 months
50% | 24 months | 67% | 36 months | 100% | 57 months | 40 % | 18 months
75% | 36 months | 100% | 48 months |  |  | 60 % | 30 months
100% | 48 months |  |  |  |  | 80 % | 42 months
|  |  |  |  |  | 100 % | 54 months
D uring the year ended December 31, 2017, no options were exercised and 4,906 options were exercised during the year ended December 31, 2016. The following is a summary of the activity in the Company ’s stock option plans and other options for the years ended December 31, 2017 and 2016, respectively:
|  | December 31, 2017 |  |  | December 31, 201 6 |
|  |  |  |  |  | Weighted Avg. |  |  |  |  |  |  | Weighted Avg. |
|  | Shares |  |  | Exercise Price |  |  | Shares |  |  | Exercise Price |
Exercisable, beginning of period |  |  | 83,275 |  |  | $ | 5.20 |  |  |  | 63,800 |  |  | $ | 5.26 |
Vested |  |  | 37,138 |  |  |  | 5.70 |  |  |  | 30,381 |  |  |  | 5.22 |
Exercised |  |  | - |  |  |  | - |  |  |  | 4,906 |  |  |  | 5.15 |
Cancelled /Expired |  |  | (16,950 | ) |  |  | 5.17 |  |  |  | (6,000 | ) |  |  | 5.96 |
Exercisable at the end of period |  |  | 103,463 |  |  | $ | 5.38 |  |  |  | 83,275 |  |  | $ | 5.20 |
|  | December 31, 201 7 |  |  | December 31, 201 6 |
|  |  |  |  |  | Weighted Avg. |  |  |  |  |  |  | Weighted Avg. |
|  | Shares |  |  | Exercise Price |  |  | Shares |  |  | Exercise Price |
Outstanding, beginning of period |  |  | 143,094 |  |  | $ | 5.22 |  |  |  | 154,000 |  |  | $ | 5.25 |
Granted |  |  | 350,000 |  |  |  | 3.52 |  |  |  | - |  |  |  | - |
Exercised |  |  | - |  |  |  | - |  |  |  | 4,906 |  |  |  | 5.15 |
Cancelled /Expired |  |  | (16,950 | ) |  |  | 5.17 |  |  |  | (6,000 | ) |  |  | 5.96 |
Outstanding at the end of period |  |  | 476,144 |  |  | $ | 3.97 |  |  |  | 143,094 |  |  | $ | 5.22 |
On December 1, 2017, pursuant to his offer of employment with the Company as President, Mr. Jeffrey Hyland was granted 25,000 shares of restricted stock (vesting over four years), 65,000 incentive stock options (vesting over five years) and 260,000 non-qualified options (vesting over five years). At December 31, 201 7, there were fewer than 50,000 options available to grant. The above represents instruments broadly referred to as options which include non-qualified stock options, incentive stock options, grants of restricted common stock, and similar instruments. Warrants On July 17, 2012, the Company issued detachable warrants in connection with the Note and Warrant Purchase Agreement with BMO Equity (see Note 8 ). The warrants were exercisable at any time after July 17, 2012 and until July 17, 2022, or 18 months after full payment of the related $5,000,000 note payable, whichever was earlier, for up to 4% of the outstanding units of the Company (on a fully diluted basis) on the date of exercise. The warrants are exercisable at the purchase price of $0.01 per unit. At inception, the fair value allocated to the warrants of $703,000 was separately reflected as a noncurrent liability in the consolidated balance sheet. At the time of the December 31, 2017 payout, this warrant note had a principle balance of $831,000. The fair value of the detachable warrants was estimated on the date of the grant using the Black-Scholes option-pricing model. This model use d the assumptions listed in the table below as of July 17, 2012 ( initial valuation date of the warrants). In the valuation of the warrants, it was determined that the warrants were required to be carried as a derivative liability at fair value. Changes in the fair value of the warrants were recognized in the consolidated statement of operations. These warrants were converted into notes and fully repaid during December 2017.
|  | Dec 31, 2017 |  |  | Dec 31, 2016 |  |  | Dec 31, 2015 |
Weighted average fair value per warrant |  |  | - |  |  | $ | 5.85 |  |  | $ | 5.11 |
Risk-free interest rate |  |  | - |  |  |  | 1.47 | % |  |  | 1.76 | %
Expected lives (yrs.) |  |  | - |  |  |  | 3.0 |  |  |  | 4.0 |
Expected volatility |  |  | - |  |  |  | 34.03 | % |  |  | 28.99 | %

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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