Note 7 - Equity |
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Stockholders' Equity Note Disclosure [Text Block] |
Note 7: EquityStock Options In the three months ended March 31, 2017, the Company granted 40,000 stock options to employees with exercise prices ranging from $2.65 - $3.11. Upon the completion of the Company’s IPO in
November 2014, its stock trading price became the basis of fair value of its common stock used in determining the value of share based awards. To the extent the value of the Company’s share based awards involves a measure of volatility, it will rely upon the volatilities from publicly traded companies with similar business models until its common stock has accumulated enough trading history for it to utilize its own historical volatility. The expected life of the options granted is based on the average of the vesting term and the contractual term of the option. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury 10 -year yield curve in effect at the date of the grant.The Company has computed the fair value of all options granted during the three months ended March 31, 2017 and 2016, using the following assumptions:
The information below summarizes the stock options activity:
The intrinsic value of the Company’s stock options outstanding was $1,021,554 at March 31, 2017.
For the three months ended March 31, 2017 and 2016, stock based compensation expense for stock options was $51,038 and $107,506, respectively. Unrecognized stock-based compensation expense for stock options as of March 31, 2017 was $686,052, which is expected to be recognized ratably over the next 3.1 years.Restricted Stock The information below summaries the restricted stock activity:
For the
three months ended March 31, 2017 and 2016, stock based compensation expense for restricted stock was $44,027 and $90,163, respectively. Unrecognized stock based compensation expense for restricted stock awards as of March 31, 2017 was $73,672 to be recognized ratably over the next 1.5 years.Treasury Stock In December, 2013, the Company exercised its right of first refusal under the terms of a Stockholders Agreement dated March 10, 2010 to repurchase 534,000 shares of the Company’s common stock. The shares were purchased for $0.45 per share or $240,000 in cash along with the issuance of an option to repurchase the 534,000 shares. The repurchased shares were recorded as treasury stock, at cost in the amount of $791,638, and were available for general corporate purposes. The option is classified in equity as it is considered indexed to the Company’s stock and meets the criteria for classification in equity. The option was granted to the seller for a term of 8 years. The option contained the following exercise prices:
Consideration given in the form of the option was valued using a Binomial Lattice-Based model resulting in a fair value of $1.03 per share option for a total fair value of $551,638. The option was valued using the Binomial Lattice-Based valuation methodology because that model embodies all of the relevant assumptions that address the features underlying the instrument.During
December, 2016, the option holder partially exercised the call option, and purchased 250,872 shares at a total repurchase price of $210,000. The Company reduced the cost of treasury shares by approximately $113,000 related to the transaction, reduced the value of the option by approximately $259,000, and reduced additional paid in capital by approximately $162,000.
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