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NOTE 8 - STOCK-BASED COMPENSATION
 3 Months Ended
Mar. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
NOTE 8 – STOCK-BASED COMPENSATION

Options and Warrants

We have two long-term incentive plans that currently have outstanding stock options which we refer to as the 2000 Plan and the 2006 Plan. The 2000 Plan was terminated as to future grants when the 2006 Plan was approved by the stockholders in 2006.  As of March 31, 2012, we have reserved for issuance under the 2006 Plan 11,000,000 shares of common stock. Certain options granted under the 2006 Plan to employees are intended to qualify as incentive stock options under existing tax regulations. In addition, we may issue non-qualified stock options and warrants under the 2006 Plan from time to time to non-employees, in connection with acquisitions and for other purposes and we may also issue stock under the 2006 Plan. Stock options and warrants generally vest over two to five years and expire five to ten years from date of grant.

As of March 31, 2012, 4,729,750, or approximately 72.8%, of the 6,496,250 outstanding stock options and warrants granted under our option plans are fully vested.  During the three months ended March 31, 2012, we did not grant options or warrants under the 2006 Plan.

We have issued warrants outside the 2006 Plan under various types of arrangements to employees, and in exchange for outside services.  All warrants issued to employees or consultants after our February 2007 listing on the NASDAQ Global Market have been characterized as awards under the 2006 Plan.  All warrants outside the 2006 Plan have been issued with an exercise price equal to the fair value of the underlying common stock on the date of grant. The warrants expire from five to seven years from the date of grant.  Vesting terms are determined by the board of directors or the compensation committee of the board of directors at the date of grant.

As of March 31, 2012, 1,502,898, or 100%, of all the outstanding warrants outside the 2006 Plan are fully vested.  During the three months ended March 31, 2012, we did not grant warrants outside of our 2006 Plan.

The following summarizes all of our option and warrant transactions for the three months ended March 31, 2012:

Outstanding Options and Warrants Under the 2006 Plan and 2000 Plan
 
Shares
   
Weighted Average
Exercise price Per Common Share
   
Weighted Average
Remaining
Contractual Life
   
Aggregate
Intrinsic
 
Balance, December 31, 2011
    6,656,250     $ 3.62              
Granted
    -       -              
Exercised
    -       -              
Canceled or expired
    (160,000 )     4.65              
Balance, March 31, 2012
    6,496,250       3.60       2.67     $ 2,791,475  
Exercisable at March 31, 2012
    4,729,750       3.64       2.35       2,103,575  

Non-Plan Outstanding Warrants
 
Shares
   
Weighted Average
Exercise price Per Common Share
   
Weighted Average
Remaining
Contractual Life (in years)
   
Aggregate
Intrinsic Value
 
Balance, December 31, 2011
    2,502,898     $ 2.58              
Granted
    -       -              
Exercised
    (250,000 )     2.52              
Canceled or expired
    (750,000 )     4.77              
Balance, March 31, 2012
    1,502,898       1.50       1.40     $ 2,528,170  
Exercisable at March 31, 2012
    1,502,898       1.50       1.40       2,528,170  

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on March 31, 2012 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had all option holders exercised their options on March 31, 2012. Total intrinsic value of options and warrants exercised during the three months ended March 31, 2012 and 2011 was approximately $265,000 and $189,075, respectively.  As of March 31, 2012, total unrecognized stock-based compensation expense related to non-vested employee awards was approximately $2.2 million, which is expected to be recognized over a weighted average period of approximately 1.8 years.

Restricted Stock Awards

The 2006 Plan permits the award of restricted stock.  On January 3, 2012, we granted 525,000 restricted stock awards (“awards”) to certain employees and 200,000 awards to non-employee directors of the Company. Of the awards granted, 241,667 were vested on the award date, 241,667 cliff vest after one year provided that the employees or non-employees remain continuously employed or engaged through the vesting date and 241,667 cliff vest after two years provided that the employees or non-employees remain continuously employed or engaged through the vesting date. We valued the award based on the closing market price of our stock on January 3, 2012 which was $2.17 per share.

At March 31, 2012, the total unrecognized fair value of these restricted stock awards was approximately $918,000, which will be recognized over the remaining vesting period of 1.75 years.

In sum, of the 11,000,000 shares of common stock reserved for issuance under the 2006 Plan, 7,221,250 are outstanding with respect to grants of options, warrants and restricted stock and 3,778,750 are available for grant.