Note 12 - Share-Based Payments

3 Months Ended

Mar. 31, 2013

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

12. SHARE-BASED PAYMENTS

(a)    Stock options

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, consistent with the guidance on stock compensation. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The assumptions presented in the table below represent the weighted average of the applicable assumption used to value stock options at their grant date. The Company calculates expected volatility based on historical volatility of the Company's common shares. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on historical exercise experience. The Company evaluated historical exercise behavior when determining the expected term assumptions. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company determines the expected dividend yield percentage by dividing the expected annual dividend by the market price of our common shares at the date of grant.

During the three months ended March 31, 2013, stock options to purchase 150,000 common shares were granted. During the three months ended March 31, 2012, stock options to purchase 45,000 common shares were granted.

The stock options granted during the three months ended March 31, 2013 expire in 2019.

Details of stock option transactions for the three months ended March 31, 2013 and March 31, 2012 are as follows:

	Three months ended March 31, 2013				Three months ended March 31, 2012
	Number of Shares		Weighted Average exercise price per share		Number of Shares		Weighted Average exercise price per share
Outstanding, beginning of period		8,592,686	$	0.64		8,746,041	$	0.57
Granted		150,000		1.44		45,000		1.05
Exercised		(56,857)		0.68		(294,217)		0.44
Forfeited		(13,813)		1.06		(38,125)		0.84
Expired		—		—		—		—
Outstanding, end of period		8,672,016	$	0.65		8,458,699	$	0.57
Options exercisable, end of period		7,044,598	$	0.57		6,746,199	$	0.54

As of March 31, 2013, the exercise prices, weighted average remaining contractual life and intrinsic values of outstanding options were as follows:

			Options outstanding								Options exercisable
Exercise price			Outstanding Number		Weighted average exercise price per share		Weighted Average remaining contractual life (years)		Aggregate intrinsic value		Number exercisable		Weighted average exercise price per share		Aggregate intrinsic value
$0.31	-	$0.48		3,113,904	$	0.38		0.4	$	4,187,302		3,113,904	$	0.38	$	4,187,302
$0.56	-	$0.94		4,650,112	$	0.69		2.7		4,773,988		3,689,444	$	0.69		3,803,637
$1.05	-	$1.44		908,000	$	1.37		5.8		317,170		241,250	$	1.35		88,337
				8,672,016	$	0.65		2.2	$	9,278,460		7,044,598	$	0.57	$	8,079,276

Total unrecognized compensation cost relating to unvested stock options at March 31, 2013, prior to the consideration of expected forfeitures, was approximately $662,000 and is expected to be recognized over a weighted average period of 2.2 years.

The Company recorded stock-based compensation of $74,677 and $62,284 for the three months ended March 31, 2013 and 2012, respectively.

The Company has not capitalized any stock-based compensation expense as part of the cost of an asset.

(b)   Restricted stock awards

During the three months ended March 31, 2013, no restricted stock awards were granted to any employees of the Company.

Restricted stock awards generally vest annually over a four year period. Holders of restricted stock may not sell, assign, transfer, pledge or otherwise dispose of an unvested stock. Unvested shares of restricted stock are held in escrow by the Company until the holder's interest in such shares vests.

Holders of restricted stock have full stockholder rights with respect to any shares of Company stock issued to the participant under a stock award, whether or not the holder's interest in those shares is vested. Accordingly, the holder has the right to vote such shares and to receive any regular cash dividends paid on such shares.

All compensation costs relating to restricted stock awards have been recognized at March 31, 2013, prior to the consideration of expected forfeitures.

The Company recorded stock-based compensation associated with restricted stock awards of $165 and $181 for the three months ended March 31, 2013 and 2012, respectively.