XML 40 R11.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Stock-Based Compensation | 9 Months Ended
--- | ---
Sep. 30, 2014
Stock-Based Compensation [Abstract] |
Stock-Based Compensation | 5. Stock-Based Compensation The stock-based compensation expense for the three and nine months ended September 30, 2014 and 2013 reflects the fair value of the vested portion of options and warrants granted to employees, directors and eligible consultants. Stock-based compensation expense in the accompanying condensed consolidated statements of operations is as follows (in thousands):
|  | Three months ended September 30, |  |  | Nine months ended September 30, |
|  | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |
Product research and development |  | $ | 73 |  |  | $ | 69 |  |  | $ | 433 |  |  | $ | 187 |
Sales and marketing |  |  | 51 |  |  |  | 364 |  |  |  | 302 |  |  |  | 749 |
General and administrative |  |  | 55 |  |  |  | 329 |  |  |  | 859 |  |  |  | 1,165 |
Total stock based compensation expense |  | $ | 179 |  |  | $ | 762 |  |  | $ | 1,594 |  |  | $ | 2,101 |
|  |  | Remaining unamortized expense at September 30, 2014 |
| Stock-based compensation |  |  | $ | 965 |
The remaining unamortized expense related to stock options and warrants will be recognized on a straight line basis monthly as compensation expense over the remaining vesting period, which approximates 1.9 years. The fair value of stock-based awards is calculated using the Black-Scholes option pricing model, even though this model was developed to estimate the fair value of freely tradable, fully transferable options without vesting restrictions, which differ significantly from our stock options. The Black-Scholes model also requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term and forfeiture rate of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior, as well as expected behavior on outstanding options. The risk-free rate is based on the U.S. Treasury rates in effect during the corresponding period of grant. The expected volatility is based on the historical volatility of our stock price. These factors could change in the future, which would affect fair values of stock options granted in such future periods, and could cause volatility in the total amount of the stock-based compensation expense reported in future periods. Stock Options We have adopted equity incentive plans for which stock options and restricted stock awards are available to grant to employees and directors. All employee and director stock options granted under our stock option plans have an exercise price equal to the market value of the underlying common stock on the grant date. There are no vesting provisions tied to performance conditions for any options, as vesting for all outstanding option grants is based only on continued service as an employee, consultant or director. All of our outstanding stock options and restricted stock awards are classified as equity instruments. We had two equity incentive plans as of September 30, 2014:
| ● | The 1998 Non-Officer Stock Option Plan (the “1998 Plan”), which expired in June 2008; and
| ● | The 2006 Equity Incentive Plan, including the Swedish Sub-Plan to the 2006 Equity Incentive Plan, (the “2006 Plan”).
| We also had one non-employee director stock option plan as of September 30, 2014:
| ● | The 2001 Non-Employee Director Stock Option Plan (the “Director Plan”), which expired in March 2011.
A summary of the combined activity under all of the stock option plans is set forth below:
|  |  | Number of Options Outstanding |  |  | Weighted Average Exercise Price |
Outstanding at January 1, 2014 |  |  |  | 1,600,583 |  |  | $ | 5.22 |
Granted |  |  |  | 365,000 |  |  |  | 6.77 |
Expired/forfeited |  |  |  | (142,494 | ) |  |  | 11.74 |
Outstanding at September 30, 2014 |  |  |  | 1,823,089 |  |  | $ | 5.02 |
The aggregate intrinsic value of the 1,823,089 stock options that are outstanding, vested and expected to vest as of September 30, 2014 was $0. For the three and nine months ended September 30, 2014 and 2013, we recorded $0.2 million and $1.6 million and $0.7 million and $1.9 million, respectively, of compensation expense related to the vesting of stock options. The fair value of the stock-based compensation was calculated using the Black-Scholes option pricing model as of the date of grant of the stock option. During the nine months ended September 30, 2014, we granted options to purchase 355,000 shares of our common stock to employees and an option to purchase 10,000 shares of our common stock to a member of our board of directors with a grant date fair value of $1.2 million computed using the Black-Scholes option pricing model. The weighted-average grant date fair value of the options granted during the nine months ended September 30, 2014 was $3.35 per share. See below for assumptions used in the valuation of stock options:
|  | For the nine months
|  | ended September 30, 2014
Annual dividend yield |  | -
Expected life (years) |  | 1.50 – 4.30
Risk-free interest rate |  | 0.27% - 1.47%
Expected volatility |  | 61% - 109%
The 1998 Plan terminated effective June 15, 2008 and the Director Plan terminated effective March 2011. Although we can no longer issue stock options out of the plans, the outstanding options at the date of termination will remain outstanding and vest in accordance with their terms. Options granted under the Director Plan vested over a one to four-year period, expire five to seven years after the date of grant and have exercise prices reflecting market value of the shares of our common stock on the date of grant. Stock options granted under the 1998 and 2006 Plans are exercisable over a maximum term of ten years from the date of grant, vest in various installments over a one to four-year period and have exercise prices reflecting the market value of the shares of common stock on the date of grant. Warrants In May 2014, we issued a warrant to an investor that may be exercised by November 15, 2015 to purchase up to an aggregate of 2,500,000 shares of our common stock at an exercise price of $5.09 per share. Full exercise of the investor warrant will result in us receiving $12,725,000 in gross proceeds, excluding any placement agent fee paid as described below. The holder may exercise the warrant in whole or in part. The terms of the investor warrant require that exercise may only be for cash and not a cashless basis unless, after November 15, 2014, there has been a failure to maintain the effective registration of the common shares issuable upon exercise of the investor warrant shares. We filed a registration statement with the SEC to register the common shares issuable upon exercise of the investor warrant that became effective on June 12, 2014. The exercise price of the investor warrant is subject to adjustment for stock splits, stock dividends, recapitalizations, and similar transactions a “fundamental event” or “stock combination event” as provided for in the terms of the investor warrant. We have agreed to pay a placement agent fee of up to $600,000 in connection with exercises of the investor warrant. In addition, we issued to the placement agent a warrant to acquire up to an aggregate of 75,000 shares of our common stock. The agent warrant is subject to the same terms and provisions of the investor warrant described above. A summary of all warrant activity is set forth below:
|  | September 30, 2014 |
Outstanding and exercisable |  | Warrants |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life |
January 1, 2014 |  |  | 828,573 |  |  | $ | 2.39 |  |  |  | 2.06 |
Granted |  |  | 2,575,000 |  |  |  | 5.09 |  |  |  | -- |
Expired/cancelled |  |  | (40,000 | ) |  |  | 3.98 |  |  |  | -- |
Exercised |  |  | (28,500 | ) |  |  | 2.85 |  |  |  | -- |
Outstanding and exercisable, September 30, 2014 |  |  | 3,335,073 |  |  | $ | 4.45 |  |  |  | 1.19 |
Outstanding Warrants to Purchase Common Stock as of September 30, 2014:
Description |  | Issue Date |  |  | Exercise Price |  |  | Shares |  |  | Expiration Date |
August 2009 Employee Warrants |  |  | 8/25/2009 |  |  | $ | 0.50 |  |  |  | 80,000 |  |  |  | 8/25/2016 |
2007 Debt Extension Warrants |  |  | 9/22/2010 |  |  | $ | 1.00 |  |  |  | 16,000 |  |  |  | 9/22/2015 |
December 2010 Employee Warrants |  |  | 12/3/2010 |  |  | $ | 1.63 |  |  |  | 200,000 |  |  |  | 12/3/2015 |
February 2011 Legal Advisor Warrant |  |  | 2/22/2011 |  |  | $ | 2.50 |  |  |  | 80,000 |  |  |  | 2/22/2016 |
March 2011 Investor Warrants |  |  | 3/9/2011 |  |  | $ | 3.13 |  |  |  | 349,973 |  |  |  | 3/9/2016 |
March 2011 Investor Warrants |  |  | 4/7/2011 |  |  | $ | 3.13 |  |  |  | 34,100 |  |  |  | 4/7/2016 |
May 2014 Agent Warrant |  |  | 5/15/2014 |  |  | $ | 5.09 |  |  |  | 75,000 |  |  |  | 11/15/2015 |
May 2014 Investor Warrant |  |  | 5/15/2014 |  |  | $ | 5.09 |  |  |  | 2,500,000 |  |  |  | 11/15/2015 |
Total Warrants Outstanding |  |  |  |  |  |  |  |  |  |  | 3,335,073 |  |  |  |  |

X
- Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration