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5. STOCK-BASED COMPENSATION
 3 Months Ended
Mar. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION

NOTE 5 – STOCK-BASED COMPENSATION

 

Stock Incentive Plans

 

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 March 31, 2014, 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 March 31, 2014, 4,248,000, or approximately 95.3%, of the 4,458,000 outstanding stock options and warrants granted under our option plans are fully vested.  During the three months ended March 31, 2014, we did not grant options or warrants under our 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, 2014, all 200,000 the outstanding warrants outside the 2006 Plan are fully vested. During the three months ended March 31, 2014, we did not grant warrants outside of our 2006 Plan.

 

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The following summarizes all of our option and warrant transactions during the three months ended March 31, 2014:

 

                Weighted Average        
          Weighted Average     Remaining     Aggregate  
Outstanding Options and Warrants         Exercise price     Contractual Life     Intrinsic  
Under the 2006 Plan and 2000 Plan   Shares     Per Common Share     (in years)     Value  
                         
Balance, December 31, 2013     4,701,250     $ 3.15                  
Granted     –       –                  
Exercised     (43,250 )     2.41                  
Canceled or expired     (200,000 )     5.66                  
Balance, March 31, 2014     4,458,000       3.04       1.21     $ 1,392,910  
Exercisable at March 31, 2014     4,248,000       3.06       1.11       1,382,327  

 

                Weighted Average        
          Weighted Average     Remaining     Aggregate  
Non-Plan         Exercise price     Contractual Life     Intrinsic  
Outstanding Warrants   Shares     Per Common Share     (in years)     Value  
Balance, December 31, 2013     200,000     $ 2.62                  
Granted     –       –                  
Exercised     –       –                  
Canceled or expired     –       –                  
Balance, March 31, 2014     200,000       2.62       1.67     $ 44,000  
Exercisable at March 31, 2014     200,000       2.62       1.67       44,000  

 

Aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on March 31, 2014 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 March 31, 2014. Total intrinsic value of options and warrants exercised during the three months ended March 31, 2014 and 2013 was approximately $16,000 and $2.3 million, respectively. As of March 31, 2014, total unrecognized stock-based compensation expense related to non-vested employee awards was approximately $150,000, which is expected to be recognized over a weighted average period of approximately 1.3 years.

 

Restricted Stock Awards (“RSA’s”)

 

The 2006 Plan permits the award of restricted stock. On January 2, 2014, we granted awards for 1,011,785 shares of our common stock to certain employees and outside directors. Of these awards granted, 337,262 shares vested on the award date, with the remaining 674,524 shares vesting at the completion of each year’s service by 337,262 shares per year over the next two years. We valued this award based on the closing market price of our stock on January 2, 2014 which was $1.62 per share.

 

At March 31, 2014, the total unrecognized fair value of all restricted stock awards was approximately $1,698,891, which will be recognized over the remaining vesting period of 3.00 years.

 

In sum, of the 11,000,000 shares of common stock reserved for issuance under the 2006 Plan, at March 31, 2014, we had 7,152,285 options, warrants and shares of restricted stock outstanding, 63,250 options exercised and 3,784,465 available for grant.