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Stock-Based Compensation Plans
 6 Months Ended
Jun. 30, 2012
Stock-Based Compensation Plans [Abstract]  
STOCK-BASED COMPENSATION PLANS

(5) STOCK-BASED COMPENSATION PLANS

The Company has reserved 3,000,000 shares of common stock for issuance under its 2005 Stock Option Plan (the “Option Plan”). Vesting provisions are determined by the Board of Directors. All stock options under the Option Plan expire no later than ten years from the date of grant.

In the three months ended June 30, 2012 and 2011, the Company recorded compensation expense related to stock options of $44 and $68, respectively. In the six months ended June 30, 2012 and 2011, the Company recorded compensation expense related to stock options of $90 and $146, respectively. Stock-based compensation recorded in the accompanying condensed consolidated statement of operations for the three months ended June 30, 2012 and 2011 included $6 and $6, respectively, in cost of goods sold and $38 and $62, respectively, in selling, general and administrative expenses. Stock-based compensation recorded in the accompanying condensed consolidated statement of operations for the six months ended June 30, 2012 and 2011 included $13 and $15, respectively, in cost of goods sold and $77 and $131, respectively, in selling, general and administrative expenses.

In the six months ended June 30, 2012, the Company did not grant options to employees to purchase shares of common stock. In the six months ended June 30, 2011, the Company granted options to purchase up to 173,500 shares of common stock to employees at exercise prices that ranged from $0.62 to $1.06 per share.

 

The Company used the Black Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions during the six months ended June 30, 2011:

 

         
    2011  

Weighted average expected term

     6.25 years  

Weighted average volatility

     139 % 

Weighted average risk-free interest rate

     2.0 % 

Dividend yield

     0 % 

The weighted average expected term of stock options represents the period of time that the stock options granted are expected to be outstanding based on historical exercise trends. The weighted average expected volatility is based on the historical price volatility of the Company’s common stock. The weighted average risk-free interest rate represents the U.S. Treasury bill rate for the expected term of the related stock options. The dividend yield represents the Company’s anticipated cash dividend over the expected term of the stock options. Forfeitures of share-based payment awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The estimated average forfeiture rate for the six months ended June 30, 2012 and 2011 was 33% and 35%, respectively.

 

A summary of stock option activity under the Option Plan for the six months ended June 30, 2012 is presented below:

 

                                     
          Weighted     Weighted
Average		        
    Shares     Average     Remaining     Aggregate  
    Under     Exercise     Contractual     Intrinsic  
    Option     Price     Life     Value  

Outstanding at January 1, 2012

     1,661,750     $ 0.98                      

Granted

     —         —                        

Exercised

     (25,000 )    $ 0.41                      

Forfeited

     (165,500 )    $ 0.95                      
   

 

 

                              

Outstanding at June 30, 2012

     1,471,250     $ 1.00       6.9 Years         $ 152  
   

 

 

                              

Exercisable at June 30, 2012

     847,625     $ 1.13       6.3 Years         $ 75  
   

 

 

                              

 

A summary of status of the Company’s non-vested share awards as of and for the six months ended June 30, 2012 is presented below:

 

                 
    Nonvested Shares     Weighted Average  
    Shares Under Option     Grant Date Fair Value  

Non-vested at January 1, 2012

     853,498     $ 0.85  

Granted

     —       $ —    

Vested

     (170,373 )    $ 0.93  

Forfeited

     (59,500 )    $ 0.88  
   

 

 

          

Non-vested at June 30, 2012

     623,625     $ 0.76  
   

 

 

          

As of June 30, 2012, the Company had approximately $221 of unrecognized compensation expense related to stock options that will be recognized over a weighted-average period of approximately 1.9 years.