Stockholders' Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

8. Stockholders’ Equity:

Stock-based compensation:

During the nine months ended September 30, 2012, a total of 666,714 options to purchase Common Stock with an aggregate fair market value of approximately $1.2 million were granted to Company employees and directors. The options granted have a term of 10 years from the grant date. Of the options granted, 251,508 options vested immediately and the remainder vest ratably over a three year period. The fair value of each option is amortized as compensation expense evenly through the vesting period. The fair value of each option award is estimated on the grant date using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on implied volatilities from historical volatility of the Common Stock, and other factors estimated over the expected term of the options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. The weighted average for key assumptions used in determining the fair value of options granted during the nine months ended September 30, 2012 follows:

Expected price volatility	82.37%-83.69%
Risk-free interest rate	0.62%-1.02%
Weighted average expected life in years	6 years
Dividend yield	—

Option activity during the nine months ended September 30, 2012 was as follows:

	Number of Shares			Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value
Outstanding at January 1, 2012		4,553,251		$	3.66
Granted in 2012:
Officers and Directors		281,174			2.36
Others		385,540			2.30
Exercised		(728,872	)		2.57
Forfeitures		(250,741	)		3.26
Outstanding at September 30, 2012		4,240,352		$	3.67	$	11,443,601

Options outstanding at September 30, 2012 are as follows:

Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value
$ 1.00 – 5.00		3,329,107		6.31	$	2.94
$ 5.01 – 10.00		911,245		4.91	$	6.30
		4,240,352					$	11,443,601

Options exercisable at September 30, 2012 are as follows:

Range of Exercise Prices	Number Exercisable		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value
$ 1.00 – 5.00		2,574,467		5.58	$	3.03
$ 5.01 – 10.00		911,245		4.91	$	6.30
		3,485,712					$	8,688,721

The weighted average grant date fair value of options granted during the nine months ended September 30, 2012 was $1.83. There were no options granted during the nine months ended September 30, 2012 whose exercise price was lower than the estimated market price of the stock at the grant date. A summary of the status of the Company’s non-vested stock options as of January 1, 2012, and changes during the nine months ended September 30, 2012 is summarized as follows:

Nonvested Shares	Shares			Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Nonvested at January 1, 2012		786,188
Granted		415,206
Vested		(377,170	)
Forfeited		(69,584	)
Nonvested at September 30, 2012		754,640		$	2.67	$	2,754,880

As of September 30, 2012, there was approximately $1.0 million of unrecognized compensation cost related to unvested share-based compensation awards granted. These costs will be expensed ratably over the next three years.

Warrants:

The Company has granted warrants to purchase shares of Common Stock. Warrants may be granted to affiliates in connection with certain agreements. Warrants outstanding at September 30, 2012, all of which are exercisable are as follows:

Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value
$ 0.01 – 5.00		2,246,301		2.15	$	3.82	$	5,620,485

Restricted stock units:

During the nine months ended September 30, 2012, a total of 57,500 restricted stock units with a fair market value of approximately $0.3 million were granted to independent directors of the Company pursuant to the Company’s director remuneration policy. The fair value of restricted units is determined using quoted market prices of the common stock and the number of shares expected to vest. These units were originally issued in July 2012 as restricted stock units under our 2011 Equity Incentive Plan. Such restricted stock units vested in their entirety, and the shares were issued accordingly, in September 2012.

Warrant exercises:

During the nine months ended September 30, 2012, one of the Company’s affiliates exercised warrants to purchase 45,000 shares of Common Stock for $3.00 per share.