XML 44 R14.htm IDEA: XBRL DOCUMENT v2.4.0.8
EQUITY
 9 Months Ended
Sep. 30, 2013
Equity [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]
EQUITY
 
(a)
Dividends

On February 7, 2013, the Company announced that its Board of Directors approved a dividend of $0.035 per share to be paid on March 4, 2013 to common stockholders of record on February 20, 2013. The total dividend payment on March 4, 2013 was $634 of which $517 was in cash and $117 (net of the Dividend Reinvestment Plan (“DRIP”) discount of $6) was in common stock of the Company (representing 18,976 shares of common stock) in accordance with the DRIP. On May 8, 2013, the Company's Board of Directors agreed to halt the Company's dividend in favor of investing in Acorn's portfolio companies.
(b)
Acorn Stock Options

A summary of stock option activity for the nine months ended September 30, 2013 is as follows:

 
 
Number 
of Options
(in shares)
 
Weighted
Average
Exercise
Price Per Share
 
Weighted Average Remaining Contractual Life
 
Aggregate Intrinsic Value
Outstanding at December 31, 2012
 
1,311,397

 
$
5.20

 
 
 
 
Granted
 
192,485

 
$
6.79

 
 
 
 
Exercised
 
—

 
$
—

 
 
 
 
Forfeited or expired
 
—

 
$
—

 
 
 
 
Outstanding at September 30, 2013
 
1,503,882

 
$
5.41

 
4.0 years
 
$
1,632

Exercisable at September 30, 2013
 
1,107,159

 
$
4.78

 
3.1 years
 
$
1,616



The fair value of the options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:
        
Risk-free interest rate
 
1.7
%
Expected term of options
 
6.7 years

Expected annual volatility
 
58
%
Expected dividend yield
 
0.5
%

 

(c)
DSIT Stock Options

In July 2013, DSIT amended the vesting terms of previously granted option agreements under the DSIT 2006 Key Employee Share Option Plan (the "Plan") such that those options become vested and exercisable upon the occurrence of any one of the following:

i)
The date of consummation of an IPO (as defined in the Plan); or
ii)
The date of consummation of a Corporate Transaction (as defined in the Plan); or
iii)
The date of termination or resignation of Optionee’s employment with DSIT, for any reason excluding termination for cause, provided that on the date of termination the Optionee was employed by DSIT for a continuous period of at least 25 years.
   
As a result of the modification of the options, DSIT recorded stock compensation expense of $159 during the third quarter of 2013.

(d)
Stock-based Compensation Expense

Stock-based compensation expense included in the Company’s Condensed Statements of Operations for the three and nine month periods ended September 30, 2012 and 2013 was as follows:

 
 
Nine months ended September 30,
 
Three months ended September 30,
 
 
2012
 
2013
 
2012
 
2013
Cost of sales
 
$
—

 
$
44

 
$
—

 
$
44

Research and development expenses, net of credits
 
68

 
31

 
68

 
10

Selling, general and administrative expenses
 
522

 
907

 
340

 
329

   Total stock-based compensation expense
 
$
590

 
$
982

 
$
408

 
$
383



 
(e)
Warrants

The Company previously issued warrants at exercise prices equal to or greater than market value of the Company’s common stock at the date of issuance.  A summary of warrant activity follows:
 
 
Number 
of Warrants
(in shares)
 
Weighted
Average
Exercise
Price Per Share
 
Weighted Average Remaining Contractual Life
Outstanding at December 31, 2012
 
28,750

 
$
3.68

 
 
Granted
 
—

 
 
 
 
Exercised
 
(2,954
)
 
$
3.68

 
 
Forfeited or expired
 
(2,796
)
 
$
3.68

 
 
Outstanding at September 30, 2013
 
23,000

 
$
3.68

 
2.2 years


During the nine months ended September 30, 2013, 2,954 warrants were exercised and 2,796 warrants were forfeited in connection with the “net exercise” of 5,750 warrants. In a net exercise of a warrant, the Company does not require a payment of the exercise price of the warrant from the warrant holder, but reduces the number of shares of common stock issued upon the exercise of the warrant by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the warrants covered by the warrants exercised. The 5,750 warrants which were exercised under this method had a weighted average exercise price of $3.68 per share.