Stockholders' Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

10. Stockholders’ Equity

Reverse Stock Split

On July 10, 2012, the Company filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation to implement a one-for-ten reverse split of our common stock (the “Reverse Stock Split”).  The ratio for the Reverse Stock Split was determined by our Board of Directors pursuant to the approval of the stockholders at the Company’s special meeting of stockholders held on July 10, 2012, authorizing the Board to effect a reverse stock split within a range of one-for-four to one-for-ten shares of the Company’s common stock.  The Reverse Stock Split was effective as of July 10, 2012, and the Company’s common stock began trading on the NASDAQ Global Market on a post-split basis on July 11, 2012.

As a result of the Reverse Stock Split, each ten shares of the Company’s issued and outstanding common stock were automatically combined and converted into one issued and outstanding share of common stock.  The Reverse Stock Split affected all issued and outstanding shares of the Company’s common stock, as well as common stock underlying stock options, stock appreciation rights, restricted stock, restricted stock units, warrants and convertible debentures outstanding immediately prior to the effectiveness of the Reverse Stock Split.  The Reverse Stock Split reduced the number of shares of the Company’s common stock outstanding from approximately 78 million to 7.8 million at the time of the Reverse Stock Split.  In addition, the Amendment increased the number of authorized shares of the Company’s common stock from 100 million to 300 million.  The Reverse Stock Split did not alter the par value of common stock, which remained $0.001 per share, or modify any voting rights or other terms of the Company’s common stock.  Unless otherwise indicated, all information set forth herein gives effect to such Reverse Stock Split.

PIPE Transaction

In May 2012, the Company entered into a Stock and Warrant Purchase Agreement with certain institutional investors whereby it agreed to sell an aggregate of approximately 21.7 million shares of the Company's common stock (the “PIPE Common Stock”) at a price of $0.3361 per share, together with six-year warrants at a price of $0.125 per share to purchase an aggregate of approximately 21.7 million shares of common stock having an exercise price of $0.3361 per share (the “PIPE Warrants”). Each purchaser received a PIPE Warrant to purchase one share of common stock for every share of PIPE Common Stock purchased. 

As described above, on July 10, 2012, the Company effected a one-for-ten Reverse Stock Split of the Company’s common stock.  As a result, the PIPE Common Stock was combined and converted into an aggregate of approximately 2.17 million shares of the Company’s common stock, and the PIPE Warrants became exercisable for an aggregate of approximately 2.17 million shares with an exercise price of $3.361 per share.

Net proceeds from the sale of the securities were approximately $9.1 million, after placement agent fees and other offering expenses.  The Company used the funds to repay $7 million of the revolving credit facility guaranteed by the Lenders and plans to use the balance for working capital and general corporate purposes.

Stock Award Plans

The Company has various stock plans that permit the Company to provide incentives to employees and directors of the Company in the form of equity compensation that are described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.  In August 2012, the Board of Directors adopted a stock incentive plan (the 2012 Stock Incentive Plan) and a non-employee directors’ stock plan (2012 Director Plan).  Each of these plans was subsequently approved by the Company’s stockholders.  At September 30, 2012, the Board of Directors had 48,895remaining shares of the Company’s common stock to provide for current and future grants under its various equity plans. 

At September 30, 2012, the total compensation cost related to options, stock appreciation rights and non-vested stock granted to employees under the Company’s stock award plans but not yet recognized was approximately $5.7 million, net of estimated forfeitures of approximately $3.6 million. This cost will be amortized over a period of up to four years on a straight-line basis over the underlying estimated service periods and will be adjusted for subsequent changes in estimated forfeitures and anticipated vesting periods.

A summary of the option and stock appreciation rights activity for the nine months ended September 30, 2012 is as follows:

	Number of Options/SARs	Range of Exercise Price	Weighted Average Exercise Price per Share
Outstanding, December 31, 2011	562,733	$10.00 - $125.50	$ 48.53
Granted	11,548	$1.69 - $8.10	$ 4.43
Exercised	-	$0.00 - $0.00	-
Forfeited	(173,640)	$1.69 - $125.50	$ 54.45
Outstanding, September 30, 2012	400,641	$1.69 - $116.40	$ 44.70

A summary of the restricted share grant activity for the nine months ended September 30, 2012 is as follows:

	Number of Shares	Weighted Average Grant Date Fair Value per Share
Outstanding, December 31, 2011	52,659	$ 34.17
Granted	85,250	$ 8.00
Vested	(3,959)	$ 37.27
Forfeited	(29,180)	$ 20.61
Outstanding, September 30, 2012	104,770	$ 16.53

A summary of the restricted stock unit activity for the nine months ended September 30, 2012 is as follows:

	Number of Restricted Shares Units	Weighted Average Grant Date Fair Value per Unit
Outstanding, December 31, 2011	98,820	$ 10.89
Granted	486,926	$ 1.89
Vested	(29,919)	$ 10.89
Forfeited	(27,861)	$ 9.57
Outstanding, September 30, 2012	527,966	$ 2.66

A summary of the restricted stock outstanding as of September 30, 2012 is as follows:

	Number of Shares
Time based restricted shares	10,150
Performance based restricted shares	94,620
Outstanding, September 30, 2012	104,770