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STOCK-BASED COMPENSATION
 6 Months Ended
Jun. 30, 2012
STOCK-BASED COMPENSATION

NOTE 12 – STOCK-BASED COMPENSATION

 

Pursuant to the Company’s Amended and Restated 2007 Equity Incentive Plan, the aggregate number shares of the Company’s common stock available for grant of stock options and issuance is 4,341,989 shares.

 

The fair value of each option award below is estimated on the date of grant using the Black-Scholes option-pricing model. The risk free rate is based on the yield-to-maturity in continuous compounding of the US Government Bonds with the time-to-maturity similar to the expected tenor of the option granted, volatility is based on the annualized historical stock price volatility of the Company, and the expected life is based on the estimated average of the life of options using the “simplified” method, as prescribed in FASB ASC 718, due to insufficient historical exercise activity during recent years as a basis from which to estimate future exercise patterns.

 

In early March 2012, the Company granted to an independent director an option to purchase 12,500 shares of the Company’s common stock at an exercise price of $2.77 per share and the options vested immediately. The options were valued at $15,300 fair value, with assumed 95.89% volatility, a three-year expiration term with expected tenor of 1.49 years, a risk free rate of 0.21% and no dividend yield. For the three-month and six-month periods ended June 30, 2012, $0 and $15,300 was recognized as general and administrative expenses.

 

In early May 2012, the Company granted to an independent director an option to purchase 12,500 shares of the Company’s common stock at an exercise price of $2.06 per share and the options vested immediately. The options were valued at $11,000 fair value, with assumed 95.21% volatility, a three-year expiration term with expected tenor of 1.49 years, a risk free rate of 0.21% and no dividend yield. For the three-month and six-month periods ended June 30, 2012, $11,000 was recognized as general and administrative expenses.

 

On July 2 2012, the Company granted to an independent director an option to purchase 12,500 shares of the Company’s common stock at an exercise price of $1.22 per share and the options vested immediately. The options were valued at $7,000 fair value, with assumed 94.92% volatility, a three-year expiration term with expected tenor of 1.49 years, a risk free rate of 0.24% and no dividend yield, which will be recognized as general and administrative expense in third quarter of 2012.

 

The following table summarizes all Company stock option transactions between January 1, 2012 and June 30, 2012.

 

    Number of Option
and Warrants
Outstanding		     Number of Option
and Warrants
Non-vested		     Number of Option
and Warrants
Vested		     Range of
Exercise Price per
Common Share		  
Balance, January 1, 2012     1,144,471       -       1,144,471     $2.41 - $12.60  
Granted during the six-month period ended June 30, 2012     25,000       25,000       -     $2.06 - $2.77  
Vested during the six-month period ended June 30, 2012     -       (25,000 )     25,000     $2.06 - $2.77  
Balance, June 30, 2012     1,169,471       -       1,169,471     $2.06 - $12.60  

  

    Stock and Warrants Options Outstanding  
                Weighted Average     Weighted Average  
                Remaining     Exercise Price of  
    Outstanding at
June 30, 2012		     Range of
Exercise Prices		     Contractual Life
(Years)		     Options Currently
Outstanding		  
Exercisable and outstanding     1,169,471     $2.06 - $12.60       2.42     $ 6.21  

 

The weighted average grant-date fair values as at June 30, 2012 and December 31, 2011 were $7.18 and $7.29, respectively.

 

At June 30, 2012, the aggregate intrinsic value of the stock options and warrants was $1,382,612.