STOCK TRANSACTIONS

9 Months Ended

Sep. 30, 2014

STOCK TRANSACTIONS [Abstract]

STOCK TRANSACTIONS

NOTE 4 – STOCK TRANSACTIONS

a. During the nine months ended September 30, 2014, the Company issued a total of 113,800 shares of Common Stock in connection with the exercise of a total of 116,801 options by certain employees of the Company. The aggregate proceeds in connection with such exercises totaled approximately $43,000.

b. On July 24, 2014, the Company's Board of Directors approved, subject to certain terms and conditions, the grant of a 10-year option to purchase 150,000 shares of Common Stock to its newly elected chairman of the Board of Directors with an exercise price of $3.37 per share. The options vest over a three-year period; the first 50,000 shares vest on the first anniversary of the grant date and the remaining shares vest in eight equal quarterly increments over the subsequent two year period. Vesting of the options will be accelerated in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Company's 2006 Stock Incentive Plan. The Company estimated the fair value of the option on the date of board approval using the Black-Scholes option-pricing model to be approximately $293,000.

c. On September 28, 2014, the Company's Board of Directors approved, subject to certain terms and conditions, the grant of a 10-year option to purchase 900,000 shares of Common Stock to its newly appointed President and Chief Executive Officer with an exercise price of $2.37 per share. The options vest over a four-year period in 16 equal quarterly increments. Vesting of the options will be accelerated in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Company's 2006 Stock Incentive Plan. The Company estimated the fair value of the option on the date of board approval using the Black-Scholes option-pricing model to be approximately $1,236,490.