Annual report pursuant to Section 13 and 15(d)

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2013

Fair value of options on the date of grant

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

	Year Ended
	December 31,
	2013		2012

Risk-free interest rates		0.78% - 1.24%		0.71% - 1.75%
Expected option life in years	5 years		5 years – 10 years
Expected stock price volatility		43.54% - 44.31%		43.54% - 45.86%
Expected dividend yield		0.00%		0.00%

Summary of stock option activity

The following table summarizes stock option activity for the years ended December 31:

	2013					2012
				Weighted					Weighted
				Average					Average
	Options			Exercise		Options			Exercise
	Outstanding			Price		Outstanding			Price

Options outstanding at beginning of year		5,582,500		$	0.78		7,208,070		$	0.69
Granted		400,000		$	1.71		925,000		$	1.24
Cancelled/expired/exercised		(1,700,000	)	$	0.67		(2,550,570	)	$	0.66

Options outstanding at end of year		4,282,500		$	0.91		5,582,500		$	0.78

Options exercisable at end of year		3,790,834		$	0.84		4,826,250		$	0.71

Stock options outstanding and exercisable

The following table presents information relating to all stock options outstanding and exercisable at December 31, 2013:

Weighted

Average

Weighted

Range of

Average

Remaining

Average

Exercise

Options

Exercise

Life in

Options

Exercise

Price

Outstanding

Price

Years

Exercisable

Price

$0.25 - $1.88

4,282,500

0.91

3.30

3,790,834

0.84

Outstanding warrants to purchase common stock

As of December 31, 2013, the following are the outstanding warrants to purchase shares of the Company's common stock:

Number of		Exercise
Warrants		Price		Expiration Date

	1,125,000	$	2.10	May 21, 2018
	1,125,000	$	1.40	May 21, 2018
	125,000	$	2.10	July 26, 2018
	125,000	$	1.40	July 26, 2018
	2,500,000

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details