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Stock-Based Compensation Plans
 9 Months Ended
Sep. 30, 2012
Stock-Based Compensation Plans [Abstract]  
STOCK-BASED COMPENSATION PLANS
(5) STOCK-BASED COMPENSATION PLANS

In the three months ended September 30, 2012 and 2011, the Company recorded compensation expense related to stock options of $60 and $61, respectively. In the nine months ended September 30, 2012 and 2011, the Company recorded compensation expense related to stock options of $150 and $207, respectively. Stock-based compensation recorded in the accompanying condensed consolidated statement of operations for the three months ended September 30, 2012 and 2011 included $7 and $12, respectively, in cost of goods sold and $53 and $49, respectively, in selling, general and administrative expenses. Stock-based compensation recorded in the accompanying condensed consolidated statement of operations for the nine months ended September 30, 2012 and 2011 included $20 and $25, respectively, in cost of goods sold and $130 and $182, respectively, in selling, general and administrative expenses.

In the nine months ended September 30, 2012, the Company granted options to purchase up to 322,500 shares of common stock to employees at exercise prices that ranged from $0.70 to $0.81. In the nine months ended September 30, 2011, the Company granted options to purchase up to 274,000 shares of common stock to employees at exercise prices that ranged from $0.62 to $0.90 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 nine months ended September 30, 2012 and 2011:

 

                 
    2012     2011  

Weighted average expected term

     6.25 years       6.17 years  

Weighted average volatility

     134 %      137 % 

Weighted average risk-free interest rate

     1.0 %      2.0 % 

Dividend yield

     0 %      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 nine months ended September 30, 2012 and 2011 was 33% and 35%, respectively.

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

 

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

Outstanding at January 1, 2012

     1,661,750     $ 0.98                  

Granted

     322,500     $ 0.74                  

Exercised

     (25,000 )    $ 0.41                  

Forfeited

     (251,000 )    $ 0.97                  
   

 

 

                          

Outstanding at September 30, 2012

     1,708,250     $ 0.95       7.2 Years     $ 155  
   

 

 

                          

Exercisable at September 30, 2012

     915,624     $ 1.10       6.0 Years     $ 82  
   

 

 

                          

 

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

 

                 
    Nonvested Shares
Shares Under Option		     Weighted Average
Grant Date Fair Value		  

Non-vested at January 1, 2012

     853,498     $ 0.85  

Granted

     322,500     $ 0.67  

Vested

     (293,372 )    $ 0.90  

Forfeited

     (90,000 )    $ 0.91  
   

 

 

          

Non-vested at September 30, 2012

     792,626     $ 0.71  
   

 

 

          

As of September 30, 2012, the Company had approximately $294 of unrecognized compensation expense related to stock options that will be recognized over a weighted-average period of approximately 2.6 years.

In addition, the Company issued 25,000 shares of common stock to an investor relations consultant in exchange for services. The common stocks were valued at $0.80 per share.