Stockholders' Equity

12 Months Ended

Dec. 31, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

11. Stockholders’ equity:

Common Stock

On December 3, 2012, the Company closed a registered direct offering, issuance and sale of the Common Stock. The final amount of Common Stock issued in the offering was an aggregate of 6,791,887 shares of Common Stock.

Preferred Stock

The Company had authorized five million “blank check” shares of $.001 par value convertible preferred stock. On December 3, 2012, the Company closed a registered direct offering, issuance and sale of Series A Preferred. The final amount of Series Preferred issued in the offering was an aggregate of 2,709,300 shares of Series A Preferred. In the event of the Company’s liquidation, dissolution or winding up, holders of the Series A Preferred will receive a payment equal to $.001 per share of Series A Preferred before any proceeds are distributed to the holders of common stock. After the payment of this preferential amount, and subject to the rights of holders of any class or series of capital stock hereafter created specifically ranking by its terms senior to the Series A Preferred, the holders of Series A Preferred will participate ratably in the distribution of any remaining assets with the common stock and any other class or series of our capital stock hereafter created that participates with the common stock in such distributions. At December 31, 2012, 2,709,300 shares of Series A Preferred were outstanding and 2,290,700 shares of “blank check” preferred stock remain authorized but undesignated.

Restricted Stock Units:

During the year ended December 31, 2012, a total of 1,135,500 restricted stock units (“RSUs”) were issued to directors and key employees of the Company. A total of 57,500 RSUs were issued pursuant to the Company’s 2011 Equity Incentive Plan and fully vested September 14, 2012. The remaining 1,078,000 RSUs (100,000 RSUs were reserved for future officers) were issued pursuant to the Company’s Performance Long Term Incentive Plan (“LTIP”). The LTIP was established under and as part of the Company’s 2011 Equity Incentive Plan. These RSUs will vest in accordance with achievement of predefined cumulative revenue targets. The expense related to the issuance of these RSUs was approximately $0.3 million in 2012 and was recorded in general and administrative expense in the condensed consolidated statement of operations. The fair value of RSUs is determined using actual market prices of the Common Stock and the number of shares expected to vest. There were no RSU issuances in 2011.

Stock options:

The Company has a 2011 Equity Incentive Plan, which was approved by stockholders in July 2011 and covers a total of 4,200,000 shares of Common Stock. An additional 3,447,484 shares of Common Stock underlying options previously granted under the Company’s Amended and Restated 2001 Incentive Plan remain outstanding and exercisable. The Company’s Amended and Restated 2001 Incentive Plan expired in July 2011 and no new securities may be issued thereunder. Options may be awarded during the ten-year term of the 2011 Equity Incentive Plan to Company employees, directors, consultants and other affiliates.

Stock option activity for the years ended December 31, 2012, 2011 and 2010 is as follows:

	Number of Shares			Weighted Average Exercise  Price Per Share		Aggregate Intrinsic Value
Outstanding at January 1, 2010		3,662,133		$	3.78
Granted in 2010:
Officers and Directors		399,661		$	2.68
Others		382,476			3.22
Exercised		(31,733	)		3.08
Forfeitures		(100,998	)		3.10
Outstanding at December 31, 2010		4,311,539		$	3.65	$	2,671,309
Granted in 2011:
Officers and Directors		209,619		$	3.44
Others		238,918			3.41
Exercised		(129,888	)		2.69
Forfeitures		(76,937	)		3.09
Outstanding at December 31, 2011		4,553,251		$	3.66	$	—
Granted in 2012:
Officers and Directors		281,174		$	2.36
Others		485,540			2.80
Exercised		(789,305	)		2.60
Forfeitures		(250,741	)		3.26
Outstanding at December 31, 2012		4,279,919		$	3.70	$	4,572,205

Options outstanding at December 31, 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		3,373,419		6.15	$	3.00
$ 5.01 – 10.00		906,500		4.66	$	6.30
		4,279,919					$	4,572,205

Options exercisable at December 31, 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		2,518,779		5.29	$	3.03
$ 5.01 – 10.00		906,500		4.66	$	6.30
		3,425,279					$	3,323,902

The weighted average grant date fair value of options granted during the year ended December 31, 2012 was $1.97. There were no options granted during the years ended December 31, 2012, 2011 or 2010 whose exercise price was lower than the estimated market price of the stock at the grant date.

Nonvested stock options as of December 31, 2012, and changes during the year then ended, are as follows:

Nonvested Shares	Shares			Weighted Average Grant Date Fair Value		Intrinsic Value
Nonvested at January 1, 2012		786,188
Granted		766,714
Vested		(627,528	)
Forfeited		(70,734	)
Nonvested at December 31, 2012		854,640		$	2.91	$	1,248,303

As of December 31, 2012, there was approximately $1.1 million of unrecognized compensation cost related to unvested share-based compensation awards granted. These costs will be expensed 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 and exercisable at December 31, 2012 are as follows:

Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value
$0.00 – 5.00		2,009,436		1.89	$	3.88	$	1,428,672

Reclassification of derivative liability to equity:

During the year ended December 31, 2012, warrants by various investors were exercised to purchase 281,865 shares of Common Stock at prices ranging from $3.00 to $5.00 per share. Until the time of exercise, 236,865 of the aforementioned warrants were treated as a derivative liability. Upon exercise of the warrants, these amounts were reclassified to equity based on the fair value on the date of exercise.

During the year ended December 31, 2011, CDC IV, LLC (“CDC”) exercised warrants to purchase 601,120 shares of Common Stock for $2.91 per share. Until the time of exercise the warrants were treated as a derivative liability. Upon exercise of the warrants, these amounts were reclassified to equity based on the fair value on the date of exercise.