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Stock-Based Compensation Plans
 12 Months Ended
Dec. 31, 2012
Stock-Based Compensation Plans [Abstract]  
STOCK-BASED COMPENSATION PLANS

(7) STOCK-BASED COMPENSATION PLANS

The Company has a 2005 Stock Option Plan (the “Option Plan”) and has reserved 3,000,000 shares of common stock for issuance under the Option Plan. Vesting terms 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.

For the years ended December 31, 2012 and 2011, the Company recorded compensation expense related to stock options of $166 and $267, respectively. Stock-based compensation recorded in the accompanying consolidated statements of operations for the years ending December 31, 2012 and 2011 included $20 and $36, respectively, in cost of goods sold and $146 and $231, respectively, in selling, general and administrative expenses.

For the year ended December 31, 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 per share. During the year ended December 31, 2011, the Company granted options to purchase up to 299,000 shares of common stock 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 years ended December 31, 2012 and 2011:

 

                 
    2012     2011  

Weighted average expected term

     6.25 years       6.25 years  

Weighted average volatility

     134 %      124 % 

Weighted average risk-free interest rate

     0.8 %      2.2 % 

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 years ended December 31, 2012 and 2011 was 37% and 33%, respectively.

 

A summary of stock option activity under the Option Plan for the years ended December 31, 2012 and 2011, are presented below:

 

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

Outstanding at January 1, 2011

     1,845,250     $ 0.96              

Granted

     299,000     $ 0.74              

Exercised

     (112,500 )    $ 0.43              

Forfeited

     (370,000 )    $ 0.85              
   

 

 

                      

Outstanding at December 31, 2011

     1,661,750     $ 0.98     7.5 Years   $ 98  
   

 

 

                      

Exercisable at December 31, 2011

     808,252     $ 1.11     6.7 Years   $ 58  
   

 

 

                      

Outstanding at January 1, 2012

     1,661,750     $ 0.98              

Granted

     322,500     $ 0.74              

Exercised

     (34,500 )    $ 0.39              

Forfeited

     (448,250 )    $ 0.97              
   

 

 

                      

Outstanding at December 31, 2012

     1,501,500     $ 0.95     7.0 Years   $ 78  
   

 

 

                      

Exercisable at December 31, 2012

     810,623     $ 1.11     5.8 Years   $ 50  
   

 

 

                      

A summary of status of the Company’s non-vested shares under option as of and for the year ended December 31, 2012 is presented below:

 

                 
    Non-vested     Weighted  
    Shares     Average  
    Under     Grant Date  
    Option     Fair Value  

Non-vested at January 1, 2012

     853,498     $ 0.85  

Granted

     322,500     $ 0.67  

Vested

     (334,371 )    $ 0.89  

Forfeited

     (150,750 )    $ 0.80  
   

 

 

          

Non-vested at December 31, 2012

     690,877     $ 0.69  
   

 

 

          

As of December 31, 2012, the Company had approximately $239 of unrecognized compensation expense related to stock options that will be recognized over a weighted-average period of approximately 2.4 years. In addition, the Company issued 25,000 shares of common stock in 2012 to an investor relations consultant in exchange for services. The common stock was valued at $0.81 per share, resulting in $20 of additional compensation expense.