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Note 9 - Stock-Based Compensation
 3 Months Ended
Mar. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
NOTE 9 – STOCK-BASED COMPENSATION

Authoritative guidance relating to stock-based compensation requires the Company to measure compensation cost for stock awards at fair value and recognize compensation over the service period for awards expected to vest. Total stock-based compensation expense recorded in the Consolidated Statements of Operations was $253,000 and $975,000 for the three months ended March 31, 2013 and 2012, respectively.

Stock Option Awards

The fair value of stock option awards granted is estimated on the date of grant using a Black-Scholes option pricing model. Expected volatilities are calculated based on the historical volatility of the price of the Company's Common Stock. Management monitors stock option exercise and employee termination patterns to estimate forfeiture rates within the valuation model. The expected holding period of stock options represents the period of time that stock options granted are expected to be outstanding. The risk-free interest rate for periods within the expected life of the stock option award is based on the interest rate of U.S. Treasury notes in effect on the date of the grant.

The following table summarizes the Company’s stock option award activity:

           
Weighted Average
 
   
Number of
   
Exercise Price
 
   
Shares
   
Per Share
 
Balance at December 31, 2012
   
4,205,881
   
$
2.11
 
Options granted
   
293,500
   
$
0.75
 
Options cancelled
   
(171,947
)
 
$
1.80
 
Options expired
   
(1,088,689
)
 
$
3.27
 
Options exercised
   
--
   
$
--
 
Balance at March 31, 2013
   
3,238,745
   
$
1.74
 

There were 274,250 stock option awards granted during the first quarter of 2013. At March 31, 2013, there was no aggregate intrinsic value of the fully vested stock option awards and the weighted average remaining contractual life of the stock option awards was approximately eight years. The Company did not capitalize any compensation cost, or modify any of its stock option awards during the first quarter of 2013. There were no stock option exercises and no cash was used to settle equity instruments granted under the Company’s equity incentive plans during the first quarter of 2013.

For the three months ended March 31, 2013 and 2012, the Company recognized expense of approximately $247,000 and $975,000, respectively, in connection with these awards.

Stock Option 1997 and 2000 Plans

On May 1, 2013, the 750 stock option awards outstanding in the 1997 Plan contractually expired and there were no remaining shares in the 2000 Plan.

Restricted Stock Awards

The following table is a summary of activity related to restricted stock awards for key employees at March 31, 2013:

           
Weighted Average
 
   
Restricted
   
Grant Date
 
   
Stock
   
Fair Value
 
   
Awards
   
(per share)
 
Balance at December 31, 2012
   
22,321
   
$
1.12
 
Shares granted
   
--
   
$
--
 
Shares forfeited
   
--
   
$
--
 
Shares restriction lapses
   
--
   
$
--
 
Balance at March 31, 2013
   
22,321
   
$
1.12
 
                 
Aggregate grant date fair value
 
$
25,000
         
                 
Vesting service period of shares granted
   
1 year
         
                 
Number of shares vested during the three months ended March 31, 2013
   
--
         
                 
Number of shares non-vested at March 31, 2013
   
22,321
         

For the three months ended March 31, 2013, the Company recognized expense of approximately $6,000 related to restricted stock awards. There were no restricted stock awards issued during the three months ended March 31, 2012 or outstanding as of March 31, 2012 and, accordingly, the Company did not recognize any expense related to restricted stock awards.