Note 3. Stock Options and Restricted Stock Units

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Stock Options and Restricted Stock Units

2014 Equity Incentive Plan

On May 23, 2014, the shareholders of the Company approved the 2014 Equity Incentive Plan (the “2014 Plan”).  Under the terms of the 2014 Plan, the Company is authorized to issue incentive awards for common stock up to 200,000 shares to employees and other personnel.  On June 10, 2016, the shareholders of the Company approved an additional 200,000 awards to be issued under the 2014 Plan, bringing the total number of shares to be awarded to 400,000.  The awards may be in the form of incentive stock options, nonqualified stock options, restricted stock, restricted stock units and performance awards.  The 2014 Plan is effective through March 31, 2024.  As of September 30, 2016, 248,500 awards had been granted under the 2014 Plan.

The following table summarizes information about stock options outstanding and exercisable at September 30, 2016:

		Options Outstanding						Options Exercisable
Exercise Price Range		Number		Weighted Average Remaining Contractual Life (in Years)		Weighted Average Exercise Price		Number
$	0.01 - $1.00		12,850		5.31	$	0.01		12,850
$	1.01 - $3.00		1,000		4.65	$	1.70		1,000
$	3.01 - $4.00		11,000		5.50	$	3.33		11,000
$	4.01 - $8.00		102,500		4.86	$	7.67		72,500
$	8.01 - $9.00		30,000		1.89	$	8.25		30,000
$	9.01 - $10.00		11,917		8.24	$	9.26		6,167
$	10.01 - $13.49		40,000		2.44	$	13.49		25,000
	Total		209,267		4.23	$	8.23		158,517

As of September 30, 2016, the Company had unrecognized stock compensation related to the options of $377,974.

On January 1, 2016, the Company granted 38,500 restricted stock units with an intrinsic value of $5.80 to certain employees of the Company and on January 21, 2016, the Company granted 50,000 restricted stock units with an intrinsic value of $4.88 to certain members of the Board of Directors for serving on the Strategic Advisory Committee. The restricted stock units vest one-third annually over three years.  As of September 30, 2016, 7,000 restricted stock units granted on January 1, 2016, were forfeited.

During the three and nine-month periods ended September 30, 2016, 12,500 and 55,000 restricted stock units, respectively, with an average intrinsic value of $7.35 per share, vested upon the achievement of certain milestones, a majority of which, related to the development of the Company’s cloud-based disclosure reporting software. During the three and nine-month periods ended September 30, 2016, the Company capitalized a total of $73,350 and $315,450, respectively, related to these restricted stock units, which are included in capitalized software on the Consolidated Balance Sheet. As of September 30, 2016, there was $423,930 of unrecognized compensation cost related to our unvested restricted stock units, which will be recognized through 2019. A portion of this is expected to be capitalized as capitalized software.