Note 13 - Stock-Based Compensation

3 Months Ended

Mar. 31, 2013

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

13. Stock-Based Compensation

Compensation expense is calculated each quarter for consultants, employees and directors using the Black-Scholes option pricing model, until the option is fully vested.

For the three months ended March 31, 2013, the Company recognized share-based compensation cost for employees and directors of $213,000 which consisted of $160,000 in general and administrative expenses and $53,000 in research and development expenses. For the three months ended March 31, 2012, the Company recognized share-based compensation cost for employees and directors of $311,000, which consisted of $245,000 in general and administrative expenses, and $66,000 in research and development expenses. The Company did not capitalize any share-based compensation cost.

As of March 31, 2013, there was approximately $494,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the stock option plan. That cost is expected to be recognized over a weighted-average period of approximately 0.5 years.

There were no option awards granted during the three months ended March 31, 2013.  For the three months ended March 31, 2012, the Company estimated the fair value of each option award on the date of grant using the Black-Scholes model. The Company utilized the risk-free interest rate for periods equal to the expected term of the option based upon U.S. Treasury securities in effect at the time of the grant. Currently, there is no present intention of declaring any dividends. Expected volatility is based on historical volatility and the expected term of stock options is estimated using historical exercise experience.  Option forfeiture rates are based on the Company’s historical forfeiture rates.

The following table shows the weighted average assumptions used to develop the fair value estimates:

	Three Months Ended March 31,
	2013		2012
Expected volatility		n/a	61.7	%
Expected dividends		n/a	--
Expected term (in years)		n/a	7.0
Risk-free rate		n/a	1.5	%
Forfeiture rate - employees		n/a	25	%
Forfeiture rate – officers and directors		n/a	0	%

As of March 31, 2013, a forfeiture rate of 15% was applied to employees and officer grants and a forfeiture rate of 0% was applied to director grants.