Stock-Based Compensation

3 Months Ended

Jun. 30, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

10. Stock-Based Compensation

Under our 2007 Stock Incentive Plan, or the Option Plan, we may grant options to purchase shares of common stock to employees, executives, directors and consultants at exercise prices not less than the fair market value at date of grant for incentive stock options and not less than 85% of the fair market value at the date of grant for non-statutory options. An aggregate of 9,261,778 shares have been authorized for issuance under the Option Plan. These options generally expire ten years from the date of grant and generally vest 25% twelve months from the date of grant, and ratably over the next 12 quarters thereafter.

There was no grant of stock options for the three months ended June 30, 2011. We used the Black-Scholes option pricing model for estimating the fair value of stock options granted with the following assumptions for the three months ended June 30, 2010.

	Three Months Ended
	June, 30 2010
Expected dividend yield		0	%
Expected volatility		46.65	%
Risk-free interest rates		2.45	%
Expected life	6.08 years

We have elected to use the calculated-value method under FASB ASC 718 to calculate the volatility assumption for the three months ended June 30, 2011 and 2010. The expected life represents the period of time that stock options are expected to be outstanding, giving consideration to the contractual terms of the awards, vesting schedules, and expectations of future exercise patterns and post-vesting employee termination behavior. Given our limited operating history, the simplified method was applied to calculate the expected term. The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant. We have paid no cash dividends and do not anticipate paying any cash dividends in the foreseeable future and therefore used an expected dividend yield of zero in our option-pricing models.

Options activity under the Option Plan is summarized as follows:

	Options Issued and Outstanding
	Options Issued			Weighted Average
	and Outstanding			Exercise Price
Balances at March 31, 2011		7,534,974		$	0.35
Options Granted		—			—
Options Exercised		(140,500	)		0.28
Options Cancelled		(515,802	)		0.39
Balances at June 30, 2011		6,878,672		$	0.35

Options outstanding and exercisable at June 30, 2011 were 2,421,916 at a weighted average exercise price of $0.30.

A summary by exercise price of outstanding options, vested options, and options vested and expected to vest at June 30, 2011, is as follows:

				Weighted Average
Exercise Price and				Remaining Contractual				Number of Options
Weighted Average		Number of Options		Life of Outstanding		Number of Options		Vested and Expected to
Exercise Price		Outstanding		Options (Years)		Vested		Vest
$	0.23		1,118,000		8.05		551,499		1,091,111
$	0.27		1,368,250		6.41		1,202,980		1,364,321
$	0.41		4,392,422		9.25		667,437		4,156,546

A summary by outstanding options, vested options and options vested and expected to vest at June 30, 2011, is as follows:

			Weighted Average
			Remaining
	Number of		Contractual Life		Weighted Average
	Options		(Years)		Exercise Price
Options Outstanding		6,878,672		8.49	$	0.35
Vested Options		2,421,916		7.42	$	0.30
Options Vested and Expected to Vest		6,611,978		8.46	$	0.35

No income tax benefit has been recognized relating to stock-based compensation expense and no tax benefits have been realized from exercised stock options.

For the three months ended June 30, 2011, we didn’t grant any stock options to purchase any shares of common stock. For the three months ended June 30, 2010, we granted stock options to purchase 2,535,000 of common stock with a weighted average grant date fair value of $0.20 per share. As of June 30, 2011, total unrecognized compensation cost was $832,735.