NOTE (8) – Stock-based Compensation

The Company issues stock-based compensation awards to its directors and employees under the 2008 Long-Term Incentive Plan (“2008 LTIP”). The 2008 LTIP permits the grant of non-qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards for up to 2,000,000 shares of common stock. As of September 30, 2018, there were 1,293,109 shares available for future awards under the 2008 LTIP.

No stock options were granted during the three and nine months ended September 30, 2018 and 2017.

The following table summarizes stock option activity during the nine months ended September 30, 2018 and 2017:


	Nine Months Ended			Nine Months Ended
	September 30, 2018			September 30, 2017
		Weighted			Weighted
		Average			Average
	Number	Exercise		Number	Exercise
	Outstanding	Price		Outstanding	Price
Outstanding at beginning of period	537,500	$	2.19	540,625	$	2.18
Granted during period	—		—	—		—
Exercised during period	—		—	—		—
Forfeited or expired during period	—		—	—		—
Outstanding at end of period	537,500	$	2.19	540,625	$	2.18
Exercisable at end of period	267,500	$	2.71	180,625	$	3.29

The Company recorded $10 thousand of stock-based compensation expense related to stock options during the three months ended September 30, in each of 2018 and 2017, and $29 thousand during the nine months ended September 30, 2018 and 2017. As of September 30, 2018, unrecognized compensation cost related to non-vested stock options granted under the plan was $94 thousand. The cost is expected to be recognized over a period of 2.40 years.

Options outstanding and exercisable at September 30, 2018 were as follows:


	Outstanding						Exercisable
		Weighted
		Average	Weighted					Weighted
		Remaining	Average		Aggregate			Average		Aggregate
	Number	Contractual	Exercise		Intrinsic		Number	Exercise		Intrinsic
Grant Date	Outstanding	Life	Price		Value		Outstanding	Price		Value
January 21, 2009	7,500	0.30 years	$	4.00			7,500	$	4.00
March 18, 2009	75,000	0.46 years	$	4.98			75,000	$	4.98
January 21, 2010	5,000	1.30 years	$	6.00			5,000	$	6.00
February 24, 2016	450,000	7.40 years	$	1.62			180,000	$	1.62
	537,500	6.28 years	$	2.19	$	—	267,500	$	2.71	$	—

In March 2016, the Company awarded 120,483 shares of restricted stock to its Chief Executive Officer ("CEO") under the 2008 LTIP. A restricted stock award is valued at the closing price of the Company’s stock on the date of such award. Subject to certain performance restrictions, 100,000 shares of restricted stock shall vest over a two-year period and the remaining 20,483 shares shall vest over a three-year period. Stock-based compensation expense is recognized over the vesting period. The Company recorded $3 thousand and $26 thousand of stock-based compensation expense related to this award during the three months ended September 30, 2018 and 2017, respectively, and $33 thousand and $79 thousand during the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, unrecognized compensation cost related to non-vested restricted stock award was $6 thousand, which is expected to be recognized over a period of 6 months.

In March 2018, the Company awarded 18,906 shares of common stock to its directors under the 2008 LTIP, all of which are fully vested. The Company recorded $45 thousand of compensation expense based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award. In April 2017, the Company’s directors were awarded 30,002 shares of common stock, which were fully vested, and the Company recorded $53 thousand of compensation expense related to such award.

In February 2018, the Company awarded 97,195 of cash-settled restricted stock units ("RSUs") to its CEO under the 2008 LTIP. The Company also awarded 129,270 of cash-settled RSU to its CEO in April 2017. All RSUs vest at the end of two years from the date of the grant and are subject to forfeiture until vested. Each RSU entitles the CEO to receive cash equal to the fair market value of one share of common stock on the applicable payout date. Compensation expense is determined based on the fair value of the award and is re-measured at each reporting period. During the third quarter of 2018, the Company reversed $37 thousand of stock-based compensation expense due to decreasing stock price. For the same period in 2017, the Company recorded $40 thousand of stock-based compensation expense related to these awards. For the nine months ended September 30, 2018 and 2017, the Company recorded $27 thousand and $62 thousand expense related to these awards, respectively.