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Stockholders' Equity
 6 Months Ended
Jun. 30, 2014
Stockholders' Equity [Abstract]  
Stockholders' Equity
6. Stockholders' Equity

 

     On June 16, 2014, the Company sold 209,700 shares of common stock at a purchase price of $1.44 per share to an institutional investor for a total purchase price of approximately $302,000. Additionally, from the date of the closing until 90 days after the closing date, the investor has a non-transferable overallotment right to purchase up to 209,700 additional shares of common stock at a price per share of $1.60, for an additional subscription amount of up to an aggregate of approximately $335,500.

 

    Stock Options - During the six months ended June 30, 2014, the Company issued options to purchase up to an aggregate of 1,138,697 shares of its common stock to its employees that met certain minimum employment criteria, all with an exercise price of $2.00 per share. The aggregate fair value of these options amounted to approximately $886,000 as determined by utilizing the Black-Scholes-Merton option pricing model with a volatility of 70.4%, a risk free rate of return of 1.53% and zero dividend and forfeiture estimates.

 

    Stock Warrants - During the six months ended June 30, 2014, the Company issued 8,443 shares of its common stock in exchange for warrants to purchase 80,645 shares of the Company which were exercisable at a price of $3.10 per share, dated February 13, 2012 and expiring February 12, 2017. In May 2014, the Company issued a warrant to purchase up to 60,000 of the Company's common stock at $1.60 per share to a vendor of investor relations services. The warrants have a term of 3 years and will vest pro ratably over 12 monthly periods. The warrant was valued at approximately $34,000 using the Black-Scholes-Merton option pricing model with a volatility of 71.4%, a risk free rate of return of 1.67% and zero dividend and forfeiture estimates. Also in May 2014, the Company issued fully vested five-year warrants to purchase 40,000 shares of the Company's common stock at $1.40 per share in conjunction with the extension of the Company's $850,000 term note that was due to expire in May 2014 to May 2015. The estimated fair value of the warrant was recognized as expense on the date of grant. The warrant was valued at approximately $27,000 using the Black-Scholes-Merton option pricing model with a volatility of 65.5%, a risk free rate of return of 1.57% and zero dividend and forfeiture estimates.

 

    Stock-Based Payments and Compensation - The Company records stock-based payment expense related to options and warrants based on the grant date fair value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to employees, directors and consultants. Such awards include option grants, warrant grants, and restricted stock awards. During the six months ended June 30, 2014, the Company had stock compensation expense of approximately $841,000 or $0.02 basic earnings per share ($1,289,000; $0.06 basic earnings per share for the corresponding six months ended June 30, 2013).

 

     During the six months of 2014, the Company issued an aggregate of 84,025 shares of the Company's common stock to certain of its directors in settlement of approximately $134,000 of board of director fees owed to such directors.

 

     As of June 30, 2014, there was approximately $1,794,000 of total unrecognized compensation costs related to options, warrants and restricted stock granted under the Company's stock option plans that will be recognized over the next 24 months. This amount excludes $536,000 of potential stock based compensation for stock options that vest upon the occurrence of certain events which the Company does not believe are likely.