Stockholders' Equity

12 Months Ended

Dec. 31, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

11. Stockholders’ Equity

Public Offerings of Common Stock

In November 2010, we completed a public offering of our common stock in which we issued 460,000 shares at $36.50 per share and realized approximately $15.5 million in proceeds, net of fees and expenses.

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 2.17 million shares of the Company's common stock (the “PIPE Common Stock”) at a price of $3.361 per share, together with six-year warrants at a price of $1.25 per share to purchase an aggregate of approximately 2.17 million shares of common stock having an exercise price of $3.361 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.  All figures reported within this document have been adjusted to reflect this reverse stock split.

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.

The holders of common stock are entitled one vote for each share held and to receive dividends whenever funds are legally available and when declared by the Board of Directors subject to the prior rights of holders of all classes of stock having priority rights as dividends and the conditions of the our Revolving Credit Agreement. No dividends have been declared or paid as of December 31, 2012.

The Company has reserved shares of common stock for the exercise of warrants, the issuance of options granted under the Company’s stock option plan and its stock purchase plan as follows:

	December 31,	December 31,
	2012	2011
Warrants	6,099,476	1,038,161
Stock award plans	131,464	36,469
Employee Stock Purchase Plan	0	10,415
	6,230,940	1,085,045

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.  In August 2012, the Board of Directors adopted a stock incentive plan (the 2012 Stock Incentive Plan) which was subsequently approved by the Company’s stockholders. This plan replaces the 2002 Stock Incentive Plan which expired on March 25, 2012.

The 2012 Stock Incentive Plan allows for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares and restricted share units to employees, directors, and consultants. Options granted under the 2012 Stock Incentive Plan expire no later than ten years from the date of grant. The exercise price of each incentive stock option shall not be less than 100% of the fair value of the stock subject to the option on the date the option is granted. The vesting provisions of individual options may vary, but incentive stock options generally vest 25% on the first anniversary of each grant and 1/48 per month over the next three years. Stock appreciation rights are rights to acquire a calculated number of shares of the Company’s common stock upon exercise of the rights. The number of shares to be issued is calculated as the difference between the exercise price of the right and the aggregate market value of the underlying shares on the exercise date divided by the market value as of the exercise date. Stock appreciation rights granted under the 2012 Stock Incentive Plan generally vest 25% on the first anniversary of such grant and 1/48 per month over the next three years and expire no later than ten years from the date of grant. The Company generally issues new shares upon the exercise of stock options and stock appreciation rights.

Restricted share grants are either time-based or performance-based. Time-based restricted shares generally cliff vest three years after grant. Performance-based restricted shares vest upon the achievement of performance objectives which are determined by the Company’s Board of Directors.

Restricted stock unit grants are time-based and generally vest over a period of 18 months to four years. Options granted to non-employee directors expire no later than ten years from the date of grant. The exercise price of options to non-employee directors shall not be less than 100% of the fair value of the stock subject to the option on the date the option is granted. Initial grants of options to new directors generally vest over a two year period. Annual grants to directors generally vest upon the earlier of one year or the next stockholder meeting.

A summary of the option and stock appreciation rights activity for the year ended December 31, 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	12,048	$1.63 - $8.10	$ 4.32
Exercised	-	$0.00 - $0.00	-
Forfeited	(200,882)	$1.69 - $125.50	$ 54.51
Outstanding, December 31, 2012	373,899	$1.63 - $116.40	$ 43.90

As of December 31, 2012, the weighted average remaining contractual life of the options and stock appreciation rights outstanding was 4.7 years. Of the 373,899 options and stock appreciation rights that were outstanding as of December 31, 2012,  267,149were vested and exercisable with a weighted average exercise price of $49.13 per share and a weighted average remaining term of 4.0 years.  

A summary of the options and stock appreciation rights outstanding by range of exercise price is as follows:

	Year Ended December 31, 2012
							Number of		Weighted
			Weighted		Weighted		Options		Average Exercise
	Options		Average		Average		Currently		Price Per Vested
Range of Exercise Prices	Outstanding		Remaining Life		Exercise Price		Exercisable		Share
$1.00 - $20.00		30,147		8.87 years	$	8.33		7,275	$	10.39
$20.01 - $50.00		264,239		5.04 years	$	38.79		180,383	$	39.53
$50.01 - $100.00		67,863		2.22 years	$	68.00		67,841	$	68.00
$100.01 - $150.00		11,650		3.78 years	$	112.05		11,650	$	112.05
		373,899		4.7 years	$	43.90		267,149	$	49.13

The intrinsic value of options and stock appreciation rights is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for the options and stock appreciation rights that were in-the-money at December 31, 2012. As of December 31, 2012,  6,125options and stock appreciation rights were in-the-money. The intrinsic value of the options and stock appreciation rights outstanding at December 31, 2012 was approximately $5,298based on a closing share price of $2.55 on December 31, 2012. There were no fully vested options and stock appreciation rights outstanding at December 31, 2012. During the year ended December 31, 2012, no options or stock appreciation rights were exercised under the Company’s stock option. The weighted average grant date fair value of options and stock appreciation rights granted during the year ended December 31, 2012 was $4.32per share.

During the year ended December 31, 2012 the Company realized $0 from the exercise of stock options and stock appreciation rights and less than $0.1 million and $0.5 million during 2011 and 2010, respectively.

A summary of the restricted share grant activity for the year ended December 31, 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	(4,001)	$ 37.32
Forfeited	(65,365)	$ 14.05
Outstanding, December 31, 2012	68,543	$ 20.62

A summary of the restricted stock unit activity for the year ended December 31, 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	509,272	$ 1.89
Vested	(29,919)	$ 10.89
Forfeited	(48,861)	$ 6.51
Outstanding, December 31, 2012	529,312	$ 2.64

A summary of the restricted shares outstanding as of December 31, 2012 is as follows:

	Number of Shares
Time based restricted shares	9,458
Performance based restricted shares	59,085
Outstanding, December 31, 2012	68,543

The intrinsic value of restricted shares and restricted stock units outstanding at December 31, 2012 was approximately $0.1million and $1.3million, respectively, based on a closing share price of $2.55 as of December 31, 2012. During the year ended December 31, 2012, the aggregate intrinsic value of restricted shares and restricted stock units vested was approximately $0 and $0.1 million, respectively, determined at the date of vesting.

During the year ended December 31, 2012, the Company determined that it was not probable that the performance conditions related to certain of its outstanding restricted share awards would be achieved and accordingly, recorded approximately $(1.2) million as a cumulative catch-up adjustment resulting in a reduction of share based compensation. During the third quarter of 2011, the Company made an adjustment to its forfeiture rate based on historical information, which resulted in a reduction of share-based compensation of $(0.5) million for the year ended December 31, 2011.

As of December 31, 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 $5.9 million, net of estimated forfeitures of approximately $3.3 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.

2009 Employee Stock Purchase Plan

In 2009, the Company adopted its 2009 Employee Stock Purchase Plan and reserved 25,000 shares of common stock for issuance pursuant to the plan. The Company offered employees the opportunity to participate in the plan beginning July 1, 2009 with an initial purchase date of September 30, 2009. Eligible employees had the opportunity to participate in a new purchase period every 3 months. Under the terms of the plan, employees could purchase up to 15% of their compensation of the Company’s common stock, subject to an annual maximum of $25,000, at 95% of the fair market value of the stock at the end of the purchase period, subject to certain plan limitations. As of December 31, 2012, a total of 24,901 shares had been purchased under this plan. As of December 31, 2012 there were no remaining shares available for issuance under the Employee Stock Purchase Plan as the plan was suspended in 2012.

Warrants

In November 2010, the Company issued warrants to purchase 80,000 shares of common stock in conjunction with the offering as discussed above in “Public Offerings of Common Stock.”

In December 2010, the Company issued warrants to purchase 11,111 shares of common stock in conjunction with the amendment of the loan agreement as described in Note 9.

During 2012, 2011, and 2010, warrants for 0,  0, and 0 shares, respectively, were exercised.

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.