Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE 4 STOCK-BASED COMPENSATION

The Company has a stock incentive plan, as amended (the "Plan"), under which stock options for 7,400,000 shares of the Company's common stock may be granted. Grants under the Plan may be made to employees (including officers), directors, consultants, advisors or other independent contractors who provide services to the Company or its subsidiary.

During the three months ended March 31, 2012 and 2011, the Company granted stock options to employees and non-employee directors as follows:

	For the three months ended March 31,
	2012		2011
Options granted during period		1,309,000		1,008,000
Weighted average exercise price	$	4.60	$	7.33
Weighted average grant date fair value	$	3.09	$	4.86
Aggregate intrinsic value at March 31, 2012		None		None

The aggregate intrinsic value is calculated as the difference between the exercise prices of the underlying awards and the quoted closing price of the common stock of the Company as of March 31, 2012 and only include those awards that have an exercise price below the quoted closing price, or in-the-money options.

Each option granted to employees and non-employee directors during the three months ended March 31, 2012 and 2011 vests as to 25% of the shares on each of the first, second, third and fourth anniversary of the vesting commencement date. Following the vesting periods, options are exercisable by employees until the earlier of 90 days after the employee's termination with the Company or the ten-year anniversary of the initial grant, subject to adjustment under certain conditions. Following the vesting periods, options are exercisable by non-employee directors until the earlier of 180 days after they cease to be a member of the Board of Directors or the ten-year anniversary of the initial grant, subject to adjustment under certain conditions. As of January 2012, options that are forfeited or cancelled are not returned to the option pool and are, accordingly, no longer eligible for grant under the Plan.

The fair value of each option award made to employees and directors was estimated on the date of grant using the Black-Scholes-Merton closed-form option valuation model utilizing the assumptions noted in the following table. As of January 1, 2011, the Company began relying exclusively on the trading and price history of the Company's stock in order to determine the expected volatility given that, as of that date, there existed sufficient trading history to be able to determine historical volatility. The Company plans to continue to analyze the expected stock price volatility, as well as other assumptions utilized in the calculations, at each grant date as more historical data becomes available. Also as of January 1, 2011, taking into consideration hiring completed and planned by the Company and the potential impact of forfeitures given the roles of these newly filled positions, the Company estimated a forfeiture rate of 3%. Due to the limited amount of historical data available to the Company, particularly with respect to employee exercise patterns and forfeitures, actual results could differ from the Company's assumptions.

The table below summarizes the assumptions utilized in estimating the fair value of the stock options granted during the three months ended March 31, 2012 and 2011:

	For the three months ended March 31,
	2012			2011
Weighted average risk-free interest rate		0.78	%		1.98	%
Expected life of options		5 years			5 years
Expected dividend yield		0	%		0	%
Expected rate of forfeiture		3	%		3	%
Weighted average expected volatility		85.97	%		87.60	%

The table below summarizes the compensation expense recorded by the Company for the three months ended March 31, 2012 and 2011 in conjunction with option grants made to employees and non-employee directors:

	For the three months ended March 31,
	2012		2011
Stock-based compensation expense recorded during period	$	828,084	$	683,693
Total unrecognized compensation expense remaining	$	8,935,167	$	7,251,388
Remaining average recognition period (in years)		2.7		2.7

The table below summarizes options outstanding, options vested and aggregate intrinsic value as of March 31, 2012:

Total options outstanding		7,101,430
Weighted average remaining contractual life (in years)		6.85
Weighted average exercise price per share	$	4.37
Aggregate intrinsic value of in-the-money options outstanding	$	953,741
Aggregate intrinsic value of in-the-money options outstanding and vested	$	775,532

During the three months ended March 31, 2012 and 2011, no options were exercised. During the three months ended March 31, 2012, unvested options for 20,000 shares were forfeited by an employee that resigned during that period.