Stock-Based Compensation

3 Months Ended

Mar. 31, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

Note 2. Stock-Based Compensation

During the three months ended March 31, 2018, we granted: (i) options to acquire 15,024 shares of our common stock to an employee at a price of $3.15 per share. During the three months ended March 31, 2017, we did not grant any options.

The weighted average fair market value of the options granted in the three months ended March 31, 2018 was estimated on the date of grant, using a Black-Scholes option pricing model with the following assumptions:

	March 31, 2018
Expected life of options (using the “simplified” method)	6 years
Average risk-free interest rate	2.18%
Average expected volatility of stock	92%
Expected dividend rate	None
Fair value of options granted	$35,900

Compensation cost related to stock options recognized in operating results (included in general and administrative expenses) totaled $59,600 and $63,400 in the three months ended March 31, 2018 and 2017, respectively. Approximately $412,500 of total unrecognized compensation costs related to non-vested stock options is expected to be recognized over the next four years, depending on the vesting provisions of the options. There was no tax benefit from recording the non-cash expense as it relates to the options granted to employees, as these were qualified stock options which are not normally tax deductible.

In 2005, we adopted a stock option plan for our employees, officers and directors (the “2005 Plan”). In 2015, we adopted a stock option plan for our employees, officers and directors (the “2015 Plan”) to replace the 2005 Plan, which expired on March 31, 2015.

Activity under our two stock option plans is as follows:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
2005 Plan
Outstanding, December 31, 2017		492,063		$	0.73	3.8 years	$	1,067,000
Granted		-		$	-
Exercised		(101,563	)	$	0.42
Cancelled/Expired		-		$	-
Outstanding, March 31, 2018		390,500		$	0.81	4.4 years	$	1,030,300
Exercisable, March 31, 2018		311,490		$	0.80	4.0 years	$	825,700
2015 Plan
Outstanding, December 31, 2017		784,684		$	1.32	6.4 years	$	1,238,200
Granted		15,024		$	3.15
Exercised		(36,314	)	$	1.25
Cancelled/Expired		-		$	-
Outstanding, March 31, 2018		763,394		$	1.36	6.1 years	$	1,594,400
Exercisable, March 31, 2018		428,778		$	1.31	5.7 years	$	916,500