Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

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Stockholders' Equity
 6 Months Ended
Jun. 30, 2014
Stockholders' Equity [Abstract]  
Stockholders' Equity
8. Stockholders' Equity
 
Preferred Stock - The Company has no preferred stock issued. Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that allow the Company's Board of Directors to issue, without further action by the stockholders, up to 1,000,000 shares of undesignated preferred stock.
  
Common Stock - The Company has one class of common stock outstanding with a total number of shares authorized of 25,000,000. As of June 30, 2014, the Company had 6,309,845 shares of common stock outstanding.
 
Share Repurchase Program - On April 29, 2013, the Company announced that its Board of Directors authorized a share repurchase program pursuant to which the Company could repurchase up to $1 million of its outstanding common stock. The program was renewed by the Board of Directors on November 30, 2013 for an additional six-month period expiring on May 31, 2014.  The repurchases under the program were permitted to be made from time to time at prevailing market prices in open market or privately negotiated transactions, depending upon market conditions. The manner, timing and amount of any repurchases were determined by the Company based on an evaluation of market conditions, stock price and other factors. Under the program, the purchases were funded from available working capital, and the repurchased shares are held in treasury. The program did not obligate the Company to acquire any particular amount of common stock. As of June 30, 2014, the Company had acquired 8,382 shares of its outstanding common stock in exchange for $37,117. The share repurchase has been recorded as treasury stock, at cost, in the accompanying condensed balance sheets at June 30, 2014 and December 31, 2013. The Company acquired 6,182 shares during the six months ended June 30, 2014 in exchange for $25,862.

Equity Incentive Plans - Prior to the consummation of our IPO, we adopted the 2013 Equity Compensation Plan under which we reserved 500,000 shares of our common stock for the purpose of providing equity incentives to our employees, officers, directors and consultants including options, restricted stock, restricted stock units, stock appreciation rights, other equity awards, annual incentive awards and dividend equivalents. The plan provides for a maximum of 500,000 shares that could be acquired upon the exercise of a stock option or the vesting of restricted stock. The plan was approved by our stockholders prior to the consummation of our IPO.
 
The following table summarizes the Company's stock option activity for the six months ended June 30, 2014:
 
 
   
Number of
Options
    
Weighted
Average Exercise
Price
    
Weighted
Average
Remaining
Contractual Life
(in Years)
    
Aggregate
Intrinsic Value
  
Outstanding - December 31, 2013
    
-
    
$
-
      
-
    
$
0
  
Granted
    
187,000
      
3.45
                  
Exercised
    
-
      
-
                  
Forfeited or Canceled
    
(4,000
)
    
(3.45
)
                
Outstanding - June 30, 2014
    
183,000
    
$
3.45
      
9.8
    
$
113,460
  
                                 
Exercisable - June 30, 2014
    
-
      
-
      
-
    
$
-
  

A summary of the changes in the Company's unvested stock options is as follows:

   
Number of
Options
    
Weighted
Average Grant
Date Fair Value
  
Unvested - December 31, 2013
    
-
    
$
-
  
Granted
    
187,000
      
1.65
  
Vested
    
-
      
-
  
Forfeited or Canceled
    
(4,000
)
    
1.65
  
Unvested - June 30, 2014
    
183,000
    
$
1.65
  

On March 31, 2014, the Company granted 187,000 stock options to certain directors, senior management and employees for future services. These options had a fair value of $308,350 using the Black-Sholes option-pricing model with the following assumptions:

Risk-free interest rate
     2.02 %
Expected dividend yield
     0.00 %
Expected volatility
     48.14 %
Expected term
  
6 years

The options are exercisable at an exercise price of $3.45 per share over a ten-year term and vest over three years. The Company recorded $25,696 as compensation expense during the three and six months ended June 30, 2014 pertaining to this grant.

Total unrecognized compensation expense related to unvested stock awards at June 30, 2014 amounts to $276,608 and is expected to be recognized over a weighted average period of 2.75 years.