Note 4 - Equity, Stock Plan and Warrants

3 Months Ended

Mar. 31, 2013

Stockholders' Equity Note Disclosure [Text Block]

Note 4 — Equity, Stock Plan and Warrants

Common Stock

During the three months ended March 31, 2013, (1) we issued 371,718 shares of common stock for cash in connection with the exercise of stock options; (2) issued 21,622 shares of common stock for cash in connection with the exercise of warrants; and (3) issued 137,778 shares of common stock as a result of the cashless exercise of warrants.

Stock Incentive Plans

The Company has adopted four stock incentive plans: the 2005 Stock Incentive Plan, the 2007 Stock Incentive Plan, the 2010 Stock Incentive Plan and the 2011 Stock Incentive Plan (collectively, the “Stock Incentive Plans”).  The Stock Incentive Plans allow for an aggregate of up to 2,300,001 shares of our common stock to be awarded through incentive and non-qualified stock options, stock appreciation rights, restricted stock, performance shares and other types of awards.

Our Stock Incentive Plans are administered by our Board of Directors, which has the sole discretion to select participants who will receive the awards and to determine the type, size and terms of each award granted.  As of March 31, 2013, there were 3,071 shares available for issuance under the Stock Incentive Plans.

The following disclosures provide information regarding the Company’s stock-based compensation awards, all of which are classified as equity awards:

The Company grants stock options to employees that allow them to purchase shares of the Company’s common stock. Options are also granted to members of the Board of Directors.  The Company determines the fair value of stock options at the date of grant using the Black-Scholes valuation model.  Most options vest annually over a three-year service period.  The Company will issue shares from its authorized but unissued common stock upon the exercise of stock options.

Total compensation expense recognized for options was approximately $0.6 million and $0.6 million for the three months ended March 31, 2013 and March 31, 2012, respectively.  The Company has recorded approximately $0.3 million of stock compensation expense in selling, general and administrative expenses and approximately $0.3 million in research and development expense for the three months ended March 31, 2013 and approximately $0.3 million of stock compensation expense in selling, general and administrative expenses and approximately $0.3 million in research and development expense for the three months ended March 31, 2012.

A summary of the changes in the total stock options outstanding during the three months ended March 31, 2013 follows:

				Weighted
				Average
	Options			Exercise Price
Outstanding at December 31, 2012		2,254,514		$	7.08
Granted		47,000		$	14.57
Forfeited or expired		--		$	--
Exercised		(371,718	)	$	6.97
Outstanding at March 31, 2013		1,929,796		$	7.28
Vested and exercisable at March 31, 2013		1,338,258		$	7.20

The fair values of the Company’s options were estimated on the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions:

	Three Months Ended March 31, 2013					Three Months Ended March 31, 2012
Expected life (years)				5 years					5 years
Interest rate		0.76	to	0.85	%		0.85	to	0.90	%
Dividend yield				—					—
Volatility		57.26	to	76.35	%				63.63	%
Forfeiture rate				—					—
Weighted average fair value of options granted	$			14.57		$			6.00

At March 31, 2013, there was $2.4 million of total unrecognized compensation cost related to non-vested stock option awards which is expected to be recognized over a weighted-average period of 0.81 years.  There were approximately 0.4 million options that became vested during the three months ended March 31, 2013.

Common Stock Warrants

As of March 31, 2013, the Company has 829,473 common stock warrants outstanding with a weighted average exercise price of $6.56 per share.  Information regarding outstanding warrants as of March 31, 2013 is as follows:

Grant date	Warrants Outstanding		Exercisable		Weighted Exercise Price		Remaining Life (Years)
December 9, 2004		68,127		68,127	$	20.70		1.67
June 10, 2009		17,464		17,464	$	7.50		6.18
August 31, 2009		26,602		26,602	$	7.50		6.18
October 2, 2009		606,218		606,218	$	5.00		6.58
March 15, 2010		8,337		8,337	$	7.50		6.75
March 15, 2010		10,000		10,000	$	5.00		6.75
April 5, 2010		930		930	$	7.50		6.75
December 15, 2010		91,795		91,795	$	6.00		2.67
Total		829,473		829,473