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6. STOCK-BASED COMPENSATION
 9 Months Ended
Sep. 30, 2013
Stock-Based Compensation  
STOCK-BASED COMPENSATION

Options and Warrants

 

We have two long-term incentive plans 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 September 30, 2013, 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 restricted 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 September 30, 2013, 5,156,250, or approximately 93.6%, of the 5,506,250 outstanding stock options and warrants granted under our option plans are fully vested.  During the nine months ended September 30, 2013, 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 September 30, 2013, 330,000, or 100%, of all the outstanding warrants outside the 2006 Plan are fully vested.   During the nine months ended September 30, 2013, we did not grant warrants outside of our 2006 Plan.

 

The following summarizes all of our option and warrant transactions for the nine months ended September 30, 2013:

 

Outstanding Options and Warrants         Weighted Average Exercise price Per Common     Weighted Average Remaining Contractual Life     Aggregate Intrinsic  
Under the 2006 Plan and 2000 Plan   Shares     Share     (in years)     Value  
                         
Balance, December 31, 2012     6,231,250     $ 3.58                  
Granted     –       –                  
Exercised     –       –                  
Canceled or expired     (725,000 )     6.82                  
Balance, September 30, 2013     5,506,250       3.16       1.36     $ 391,013  
Exercisable at September 30, 2013     5,156,250       3.17       1.28       391,013  
                                 
Non-Plan             Weighted Average Exercise price Per Common       Weighted Average Remaining Contractual Life        Aggregate Intrinsic   
Outstanding Warrants     Shares       Share       (in years)       Value  
Balance, December 31, 2012     1,502,898     $ 1.50                  
Granted     –       –                  
Exercised     (1,172,898 )     1.12                  
Canceled or expired     –       –                  
Balance, September 30, 2013     330,000       2.87       1.35     $ –  
Exercisable at September 30, 2013     330,000       2.87       1.35       –  

 

The aggregate intrinsic value in the tables above represents the total pretax intrinsic value (the difference between our closing stock price on September 30, 2013 and the exercise price, multiplied by the number of in-the-money options or warrants, as applicable) that would have been received by the holder had all holders exercised their options or warrants, as applicable, on September 30, 2013. The total intrinsic value of options and warrants exercised during the nine months ended September 30, 2013 and 2012 was approximately $2.3 million and $265,000, respectively. As of September 30, 2013, total unrecognized stock-based compensation expense related to non-vested employee awards was approximately $316,000, which is expected to be recognized over a weighted average period of approximately 0.7 years.

 

Restricted Stock Awards

 

The 2006 Plan permits the award of restricted stock. On January 2, 2013, we granted awards for 450,000 shares of our common stock to certain employees. Of the awards granted, 170,000 were vested on the award date, 140,000 cliff vest after one year provided that the employees remain continuously employed through the vesting date and 140,000 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 January 2, 2013 which was $2.51 per share. On April 1, 2013, we granted an award for 200,000 shares of our common stock to an affiliated physician who provides services to the Company. Of this award granted, 40,000 was vested on the award date, 40,000 cliff vests after one year provided that the affiliated physician continues providing services to the Company through the vesting date, 40,000 cliff vests after two years provided that the affiliated physician continues providing services to the Company through the vesting date, 40,000 cliff vests after three years provided that the affiliated physician continues providing services to the Company through the vesting date and 40,000 cliff vests after four years provided that the affiliated physician continues providing services to the Company through the vesting date. We valued this award based on the closing market price of our stock on April 1, 2013 which was $2.82 per share.

 

At September 30, 2013, the total unrecognized fair value of all restricted stock awards was approximately $1.3 million, which will be recognized over the remaining vesting period of 3.50 years.

 

In sum, of the 11,000,000 shares of common stock reserved for issuance under the 2006 Plan, at September 30, 2013, we had 7,138,750 options, warrants and shares of restricted stock outstanding, 20,000 options exercised and 3,841,250 available for grant.