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12. STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

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 2013, 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 $1.12 per share and the options vested immediately. The options were valued at $4,900 fair value, with assumed 74.73% volatility, a three-year expiration term with expected tenor of 1.49 years, a risk free rate of 0.19% and no dividend yield. For the three-month period ended March 31, 2013, $4,900 was recognized as general and administrative expenses.

The following table summarizes all Company stock option transactions between January 1, 2013 and March 31, 2013.

		Number of Option and Warrants Outstanding						Number of Option and Warrants Vested							Range of Exercise Price per Common Share
Balance, January 1, 2013			1,974,471						1,974,471				$			0.95 - $12.60
Granted and vested during the three-month period ended March 31, 2013			12,500						12,500				$			$1.12
Balance, March 31, 2013			1,986,971						1,986,971				$			0.95 - $12.60

		Stock and Warrants Options Exercisable and Outstanding
						Weighted Average		Weighted Average
						Remaining		Exercise Price of
		Outstanding at March 31, 2013		Range of Exercise Prices		Contractual Life (Years)		Options Currently Outstanding
Exercisable and outstanding		1,986,971		$0.95 - $12.60		2.53		$ 3.98

The weighted average grant-date fair values as at March 31, 2013 and December 31, 2012 were $4.60 and $4.62, respectively.

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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