Note 2 - Stock-based Compensation

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

2. stock-based compensation

The Company accounts for compensation expense associated with stock options and restricted stock units (“RSUs”) based on the fair value of the options and units on the date of grant.

The Company’s net income for the three and six months ended June 30, 2015 includes approximately $142,000 and $415,000, respectively, of non-cash compensation expense related to the Company’s stock compensation grants.

The Company’s net loss for the three and six months ended June 30, 2014 includes approximately $103,000 and $206,000, respectively, of non-cash compensation expense related to the Company’s stock option grants.

On January 1, 2015, the Company granted 51,349 RSUs to its board of directors as partial compensation for the 2015 year. RSUs vest straight line on a quarterly basis over a one year period. On January 1, 2014, the Company granted 36,292 stock options to its board of directors as partial compensation for the 2014 year. The non-cash compensation expense related to all of the Company’s stock-based compensation arrangements is recorded as a component of selling, general and administrative expenses.

The estimated fair value of each stock option award granted was determined on the date of grant using the Black-Scholes option valuation model. The estimated fair value of each RSU granted was determined based on the fair market value of the Company’s common stock on the date of grant.

The following weighted-average assumptions were used for the options granted during the six months ended June 30, 2014:

Risk-free interest rate		1.45	%

Expected volatility		102	%

Dividend yield		0	%
Expected option term (years)	5

A summary of the status of the Company’s stock option plans as of June 30, 2015 and changes during the six months ended June 30, 2015 is as follows:

	Options		Weighted average e xercise price		Weighted average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding at beginning of period	349,983		$	10.97
Exercised	(55,000	)		8.00
Outstanding and vested at end of period	294,983		$	11.53		2.07	$	248,597

During the six months ended June 30, 2015, 10,000 stock options were exercised for cash resulting in proceeds to the Company of $80,000. During the same period 45,000 options were exercised, pursuant to provisions of the stock option plan, where the Company received no cash and 29,648 shares of its common stock in exchange for the 45,000 shares issued in the exercise. The 29,648 shares that the Company received were valued at $362,012, the fair market value of the shares on the dates of exercise.

The intrinsic value of all options exercised during the six months ended June 30, 2015 and 2014 was approximately $230,500 and $513,000, respectively. The intrinsic value of all options exercised during the three months ended June 30, 2015 and 2014 was approximately zero and $99,000, respectively.