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NOTE 7 - STOCK-BASED COMPENSATION
 6 Months Ended
Jun. 30, 2012
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

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 June 30, 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 June 30, 2012, 5,014,750, or approximately 80.5%, of the 6,231,250 outstanding stock options and warrants granted under our option plans are fully vested.  During the six months ended June 30, 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 June 30, 2012, 1,502,898, or 100%, of all the outstanding warrants outside the 2006 Plan are fully vested.   During the six months ended June 30, 2012, we did not grant warrants outside of our 2006 Plan.

  

The following summarizes all of our option and warrant transactions for the six months ended June 30, 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 (in years)     Aggregate Intrinsic Value  
                                 
Balance, December 31, 2011     6,656,250     $ 3.62                  
Granted     –       –                  
Exercised     –       –                  
Canceled or expired     (425,000 )     4.19                  
Balance, June 30, 2012     6,231,250       3.58       2.39     $ 984,075  
Exercisable at June 30, 2012     5,014,750       3.66       2.13       816,692  
                                 
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, June 30, 2012     1,502,898       1.50       1.15     $ 1,814,263  
Exercisable at June 30, 2012     1,502,898       1.50       1.15       1,814,263  

  

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on June 30, 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 June 30, 2012. The total intrinsic value of options and warrants exercised during the six months ended June 30, 2012 and 2011 was approximately $265,000 and $605,650, respectively.  As of June 30, 2012, total unrecognized stock-based compensation expense related to non-vested employee awards was approximately $1.5 million, which is expected to be recognized over a weighted average period of approximately 1.6 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 241,666 cliff vest after two years provided that the employees or non-employees remain continuously employed or engaged through the vesting date. We valued the awards based on the closing market price of our stock on January 3, 2012 which was $2.17 per share.

 

On May 15, 2012, we granted 115,000 restricted stock awards (“awards”) to certain employees. Of the awards granted, 38,333 were vested on the award date, 38,333 cliff vest after one year provided that the employees remain continuously employed through the vesting date and 38,334 cliff vest after two years provided that the employees remain continuously employed through the vesting date. We valued the awards based on the closing market price of our stock on May 15, 2012 which was $3.12 per share.

 

At June 30, 2012, the total unrecognized fair value of these restricted stock awards was approximately $1.0 million, which will be recognized over the remaining vesting period of 1.83 years.

 

In sum, of the 11,000,000 shares of common stock reserved for issuance under the 2006 Plan, 7,013,750 were outstanding at June 30, 2012 with respect to grants of options, warrants and restricted stock and 3,986,250 were available for grant.