XML 17 R10.htm IDEA: XBRL DOCUMENT v2.4.0.8
Stockholders' Equity
 6 Months Ended
Jun. 30, 2013
Stockholders' Equity [Abstract]  
Stockholders' Equity

5.     Stockholders' Equity

Stock Warrants - On January 21, 2013, the Company issued Century Media Group Inc. ("Century Media") a two year warrant to purchase up to 50,000 shares of the Company's common stock at an exercise price of $3.00 per share ("Warrant"). The Warrant vested on the date of grant ("Grant Date"), and carries a term of two years commencing from the Grant Date. In conjunction with the issuance of the above-described Warrant, the Company cancelled a warrant previously issued to Century Media on February 20, 2012 (the "February 2012 Warrant"). The February 2012 Warrant consisted of a 14-month, immediately vested warrant to purchase up to 250,000 shares of the Company's common stock, par value $.02 per share, at exercise prices of $4.50, $4.75, $5.00, $5.25 and $6.00 for each 50,000 block of shares covered by the February 2012 Warrant. The February 2012 Warrant was issued as partial consideration for a one-year investor relations consulting agreement previously entered into between the Company and Century Media on February 20, 2012 (the "Century Media Consulting Agreement"). The Century Media Consulting agreement expired on its stated termination date of February 20, 2013. As a result of the new Warrant, approximately $33,000 of stock based compensation expense was recorded in the six months ended June 30, 2013.

 

Stock Options - During the six months ended June 30, 2013, the Company issued options to purchase up to an aggregate of 28,750 shares of its common stock to its non-executive board members at an exercise price of $2.51 per share. The fair value of these options amounted to approximately $29,000 determined by utilizing the Black Scholes Merton option pricing model.

 

On January 10, 2013, the Company modified 80,000 fully vested options held by former non-executive board members that were set to expire on January 14, 2013 by extending the expiration dates to between January 2, 2014 and January 14, 2014. These options had been granted between 2009 and 2012. The incremental compensation costs associated with this modification of approximately $34,000 was recognized during the six months ended June 30, 2013 and is included in selling, general and administrative expenses.

 

Stock-Based Compensation - The Company records stock-based payment expense related to options and warrants based on the grant date fair value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to employees, directors and consultants. Such awards include option grants, warrant grants, and restricted stock awards. During the six months ended June 30, 2013, the Company had stock compensation expense of approximately $1,289,000 or $0.06 per share ($332,000; $0.02 per share - 2012). This amount includes approximately $723,000 of stock based compensation expense for fair value of 386,678 shares issued to Palladium Capital Advisors, LLC upon the closing of the Merger on July 1, 2013. This amount does not include the expense associated with 400,000 shares issued to Palladium Capital upon the closing of the Merger on July 1, 2013 that are being held in escrow which vest upon the occurrence of certain events which the Company does not believe are likely.

 

As of June 30, 2013, there was approximately $635,000 of total unrecognized compensation costs related to options and restricted stock granted under the Company's stock option plans, which the Company expects to recognize over the weighted average period of approximately three years. This amount excludes $536,000 of potential stock based compensation for stock options that vest upon the occurrence of certain events which the Company does not believe are likely and the expense associated with 400,000 shares issued to Palladium Capital upon the closing of the Merger on July 1, 2013 that are being held in escrow which vest upon the occurrence of certain events which the Company does not believe are likely. This amount also excludes approximately $1,460,000 of stock based compensation expense for employee stock options that the Company will assume as a result of the merger with Lexington on July 1, 2013.