Quarterly report pursuant to Section 13 or 15(d)

Stock-based compensation

Stock-based compensation
6 Months Ended
Jun. 30, 2014
Stock-based compensation [Abstract]  
Stock-based compensation

Note 16 - Stock-based compensation:

In October 2013, the board of directors approved the 2013 Employee, Director and Consultant Equity Incentive Plan (the “2013 Plan”) pursuant to which the Company may issue options, warrants, restricted stock or other stock-based awards to directors, officers, key employees and other key individuals performing services for the Company. The 2013 Plan has reserved 4,773,992 shares of common stock for issuance. All awards will be approved by the board of directors or a committee of the board of directors to be established for such purpose.


The Company's outstanding stock options have maximum contractual terms of up to ten years, principally vest on a quarterly basis ratably over five years and were granted at exercise prices equal to the market price of the Company's common stock on the date of grant. The Company's outstanding stock options are exercisable into shares of the Company's common stock. The Company measures the cost of employee services received in exchange for an award of equity instruments, including grants of employee stock options and restricted stock awards, based on the fair value of the award at the date of grant in accordance with the modified prospective method. The Company uses the Black-Scholes model for purposes of determining the fair value of stock options granted and recognizes compensation costs ratably over the requisite service period, net of estimated forfeitures. For restricted stock awards, the grant-date fair value is the quoted market price of the stock.


In February 2014, the Company granted options to purchase shares of common stock at an exercise price of $6.00 per share. Of these options, 50% vest over time and 50% will vest based on the achievement of targeted annual milestones which have been set by the board of directors.

In June 2014, the Company granted options to purchase shares of common stock at an exercise price of $4.85 per share. These options will vest over five years.


For the three and six months ended June 30, 2014, the Company recognized $95,177 and $167,368 of non-cash stock-based compensation expense, respectively, in general and administrative expense in the consolidated statements of operations.


As of June 30, 2014, there was approximately $4,250,021 of total unrecognized compensation cost related to unvested share-based compensation grants, which is expected to be amortized over a weighted-average period of 4.9 years.


The fair value of each option grant is estimated on the date of grant using the Black-Scholes model with the following weighted-average assumptions: 


  Three months ended  
  June 30, 2014  
Expected life (in years)     6.5  
Risk-free interest rate     1.41 %
Volatility     32 %
Dividend yield     0 %


A summary of the status of stock option awards and changes during the three months ended June 30, 2014 are presented below:


          Weighted     Average        
          Average     Remaining        
          Exercise     Contractual     Intrinsic  
    Shares     Price     Life (Years)     Value  
Outstanding at December 31, 2013     766,578     $ 5.00                  
Granted     100,000     $ 6.00                  
Granted     690,000     $ 4.85                  
Exercised     -       -                  
Cancelled, expired, or forfeited     -       -                  
Outstanding at June 30, 2014     1,556,578     $ 5.00       9.59     $ 103,500  
Exercisable at June 30, 2014     125,454     $ 5.05       9.59     $ 1,417  


The weighted-average grant-date fair value of option awards granted, vested and non-vested during the three months ended June 30, 2014 was $1.85.