WaveDancer, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

3. Stock-Based Compensation

3. Stock-Based Compensation

3 Months Ended

Mar. 31, 2014

There were no option awards granted to employees and no option awards granted to non-employees in the three months ended March 31, 2014 and there were 160,000 option awards granted to employees and no option awards granted to non-employees in the three months ended March 31, 2013. The fair values of option awards granted in the three months ended March 31, 2013 were estimated using the Black-Scholes option pricing model using the following assumptions:

Risk free interest rate		0.88 0.90	%
Dividend yield		0	%
Expected term	5 years
Expected volatility		62.8	%

The status of the options issued as of March 31, 2014 and changes during the three months ended March 31, 2014 and 2013 were as follows:

	Options outstanding
	Number of shares		Weighted average exercise price per share
Balance at December 31, 2013		1,187,000	$	0.26
Options granted, exercised, expired or forfeited		--		--
Balance at March 31, 2014		1,187,000	$	0.26

	Options outstanding
	Number of shares			Weighted average exercise price per share
Balance at December 31, 2012		1,032,500		$	0.29
Options granted		160,000			0.16
Options exercised, expired or forfeited		(10,000	)		0.15
Balance at March 31, 2013		1,182,500		$	0.28

The following table summarizes information about options at March 31, 2014:

Options outstanding								Options exercisable
Total shares		Weighted average exercise price		Weighted average remaining contractual life in years		Aggregate intrinsic value		Total shares		Weighted average exercise price		Weighted average remaining contractual life in years		Aggregate intrinsic value
	1,187,000	$	0.26		6.00	$	60,518		910,750	$	0.30		4.98	$	35,483

Nonvested stock awards as of March 31, 2014 and changes during the three months ended March 31, 2014 were as follows:

	Nonvested
	Number of shares			Weighted average grant date fair value
Balance at December 31, 2013		431,250		$	0.08
Vested		(155,000	)		0.08
Balance at March 31, 2014		276,250		$	0.08

As of March 31, 2014 and 2013, unrecognized compensation cost associated with non-vested share-based employee and non-employee compensation totaled $11,469 and $12,407, respectively, which are expected to be recognized over weighted average periods of 7 months and 6 months, respectively.