Note 5 - Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

5. Stock-Based Compensation

On August 26, 2011, the Company’s stockholders approved and adopted the PositiveID Corporation 2011 Stock Incentive Plan (the “2011 Plan”). The 2011 Plan provides for awards of incentive stock options, nonqualified stock options, restricted stock awards, performance units, performance shares, SARs and other stock-based awards to employees and consultants. Under the 2011 Plan, up to 1 million shares of common stock may be granted pursuant to awards.

A summary of option activity under the Company’s stock incentive plans as of June 30, 2013, and changes during the six months then ended is presented below (in thousands, except per share amounts):

	Number of Options			Weighted Average Exercise Price Per Share
Outstanding at January 1, 2013		429		$	15.50
Granted		—		$	—
Exercised		—		$	—
Forfeited		(2	)	$	66.20
Outstanding at June 30, 2013		427		$	15.30
Exercisable at June 30, 2013		393		$	16.54

The Black-Scholes model, which the Company uses to determine compensation expense, requires the Company to make several key judgments including:

● the value of the Company’s common stock;

● the expected life of issued stock options;

● the expected volatility of the Company’s stock price;

● the expected dividend yield to be realized over the life of the stock option; and

● the risk-free interest rate over the expected life of the stock options.

The Company’s computation of the expected life of issued stock options was determined based on historical experience of similar awards giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations about employees’ future length of service. The interest rate was based on the U.S. Treasury yield curve in effect at the time of grant. The computation of volatility was based on the historical volatility of the Company’s common stock.

A summary of restricted stock outstanding under the Company’s stock incentive plans as of June 30, 2013 and changes during the six months then ended is presented below (in thousands):

Unvested at January 1, 2013	215
Issued	180
Vested	(95	)
Forfeited	—
Unvested at June 30, 2013	300

Additionally, the Company has 3,314,090 unvested restricted shares outstanding, not issued under stock incentive plans, which have been issued to employees, directors, and consultants. These restricted shares vest between October 1, 2013 and January 1, 2016.

The Company recorded an expense related to stock options and restricted stock issued to employees and advisors of approximately $204,000 and $170,000 for the three months ended June 30, 2013 and 2012, respectively and $449,000 and $759,000 to the six months ended June 30, 2013 and 2012, respectively.

As of June 30, 2013 the Company had $1.2 million of unamortized compensation related to stock option and restricted share grants. This compensation will be amortized as an operating expense over the remainder of 2013, and the years ended December 31, 2014 and 2015.