Stock-Based Compensation

3 Months Ended

Mar. 31, 2013

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION

8. STOCK-BASED COMPENSATION

As of March 31, 2013, the Company had one stock-based compensation plan, the 2005 Stock Incentive Plan (“2005 Plan”), under which the Board of Directors may currently grant incentives to employees, consultants, directors, officers and collaborating scientists in the form of incentive stock options, nonqualified stock options and restricted stock awards.

Stock awards under the Company’s stock option plan have been granted at prices which are no less than the market value of the stock on the date of the grant. Options granted under the 2005 Plan are generally time-based or performance-based, and vesting varies accordingly. Options under this plan expire in up to a maximum of ten years from the date of grant.

The compensation expense recognized in the Statement of Operations in the first quarter of 2013 and 2012 for stock options amounted to $268 (of which $125 relates to performance milestones) and $348 (of which $146 relates to performance milestones), respectively. Cash received from options and warrants exercised under all share-based payment arrangements for the three months ended March 31, 2013 and 2012 was $18 and $33, respectively.

The fair value of each option award granted is estimated on the date of grant using the Black-Scholes option valuation model and assumptions as noted in the following table:

	For the Three Months	For the Three Months
	Ended March 31, 2013	Ended March 31, 2012
Expected life	6.5 years	6.5 years
Expected volatility	76.83%	79.68%
Risk-free interest rate	1.25-1.38%	1.40-1.51%
Dividend yield	0%	0%

The expected life of the options is based on the expected time to full-vesting, forfeiture and exercise. The expected volatility assumptions were determined based upon the historical volatility of the Company’s daily closing stock price. The risk-free interest rate is based on the continuous rates provided by the U.S. Treasury with a term equal to the expected life of the option. The expected dividend yield is zero as the Company has never paid dividends and does not currently anticipate paying any in the foreseeable future.

During the three months ended March 31, 2013, the weighted average fair value of options granted, estimated as of the grant date using the Black-Scholes option valuation model, was $1.16. For the three month period ended March 31, 2012, the weighted average fair value of options granted was $2.62. For the three months ended March 31, 2013 the total intrinsic value of options exercised was $17. During the three months ended March 31, 2012 the total intrinsic value of options exercised was $74.

The status of the Company’s stock option plans at March 31, 2013 is summarized below.

At March 31, 2013, stock options to purchase 1,435,314 shares of common stock at exercise prices ranging from $1.48 to $11.11 per share are outstanding and exercisable at various dates through 2023. The 900,000 share fully vested options subject to a forebearance agreement dated February 11, 2013 between the option holder and the Company have been excluded from the ‘Outstanding’ and ‘Vested’ total numbers of option shares. The 900,000 share options are included under number of shares ‘Forfeited’ until such time as a sufficient number of shares are authorized. On April 25, 2013, the Company’s stockholders approved such sufficient increase in the Company’s authorized number of shares.

						Weighted
				Weighted		Average
				Average		Remaining
				Exercise		Contractual		Aggregate
	Number of			Price per		Term in		Intrinsic
	Shares			Share		Years		Value
Outstanding at December 31, 2012		2,426,533		$	4.01		7.0	$	29
Granted		58,850			1.68		—		—
Exercised		(18,059	)		1.00		—		—
Forfeited or expired		(1,032,010	)		3.80		—		—
Outstanding at March 31, 2013		1,435,314		$	4.11		7.9		0
Vested and exercisable at March 31, 2013		760,289		$	4.32		7.2	$	0

			Options Outstanding
			Weighted-			Options Exercisable
			Average	Weighted				Weighted-
			Remaining	Average				Average
	Number		Contractual	Exercise		Number		Exercise
Range of Exercise Prices	Outstanding		Life	Price		Exercisable		Price
$  .01-$  3.00		229,351	9.5 years	$	2.20		67,151	$	2.30
$3.01-$  6.00		910,763	8.6 years	$	3.49		532,088	$	3.43
$6.01-$11.11		295,200	4.5 years	$	7.52		161,050	$	8.11
$  .01-$11.11		1,435,314	7.9 years	$	4.11		760,289	$	4.32

As of March 31, 2013, of the total 1,435,314 options outstanding (which excludes 900,000 fully vested options subject to a forebearance agreement dated February 11, 2013, between the option holder and the Company), 675,025 have not vested. Of this total unvested amount, 242,825 options will vest upon the attainment of certain milestones, and the balance will vest over the requisite service period. The weighted average vesting period for the non-milestone, non-vested awards not yet recognized is 1.5 years.

As of March 31, 2013, of the $696 of total unrecognized compensation cost related to unvested options to be recognized, $186 is to be recognized over a period to be determined by performance-based milestones, and $510 is to be recognized over the requisite service period through 2017.

As of March 31, 2013, there were 1,295,899 shares available for future grants under the Company’s 2005 Plan.

On April 25, 2013, at the Company’s 2013 Annual Meeting of Stockholders, the Company’s stockholders approved the Company’s adoption of the new 2013 Stock Option Incentive Plan having terms substantially similar to the Company’s 2005 Plan and having 3.5 million shares available for grant.