SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2011

Stockholders Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 9 – Shareholders’ Equity

Incentive Compensation Plan

In June 2010 shareholders approved an amendment and restatement of the Company’s stock incentive plan, renaming it the Incentive Compensation Plan (the “Plan”), and among other things, increasing the number of shares of the Company’s common stock reserved for issuance under the Plan to 1,630,000. The Plan provides that the shares reserved under the Plan are available for issuance to officers of the Company, other key employees, non-employee directors, and advisors. The Plan is a successor to the Company’s previous plans, and any shares awarded and outstanding under those plans were transferred to the Plan. No further grants or share issuances will be made under the previous plans.

The Plan provides for nonqualified stock options, qualified (or incentive stock options) and stock grants. The Plan has a provision to reduce the number of shares reserved for award and issuance under the Plan by a ratio of 1.59 shares of common stock for each share of common stock that is issued pursuant to a Full Value Award (stock grant). The Plan also provides for an Incentive Bonus Program with incentive bonus opportunities through performance unit awards and special cash incentive programs tied to the attainment of pre-established performance milestones.

Provisions of the Plan include an automatic annual grant to each non-employee director of options to purchase up to 2,000 shares on the date of the Company’s Annual Shareholder Meeting, at an exercise price equal to the market price of the Company’s common shares on that date, and an automatic annual grant of 500 restricted stock units of the Company’s common shares. Options and restricted stock units awarded under the automatic annual grant program for non-employee directors vest after one year. Other options may vest fully and immediately, or over periods of time as determined by the Plan Administrator, but no longer than seven years from the grant date. Discretionary options currently awarded under the Plan vest over a period of 5 years.

Under the Plan, a total of 50,000 restricted stock units have been granted, consisting of annual automatic grants to non-employee directors and the corporate secretary, compensation to employees and deferred compensation to non-employee directors.

Changes in options outstanding under the Stock Option Plans during 2011 are as follows :

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number			Exercise		Contractual		Intrinsic
Options	of Options			Price		Term (Years)		Value
Balance at December 31, 2010		610,000		$	3.67
Granted		21,000		$	3.15
Exercised		-		$	-
Forfeited		(53,000	)	$	4.35
Balance at December 31, 2011		578,000		$	3.59		3.13	$	-
Exercisable at December 31, 2011		451,000		$	3.70		3.00	$	-

The weighted average grant-date fair value of the options granted during the years 2011, 2010 and 2009 was $1.51, $2.47, and $1.16 respectively. There was no total intrinsic value of options exercised during any of the years ended December 31, 2011 and 2010 and 2009.

There was no cash received from options exercised under any share-based payment arrangements for the years ended December 31, 2011, 2010 and 2009, and as a result, there was no actual tax benefit realized for tax deductions from option exercises in any of those years.

A summary of the status of the Company’s non-vested shares as of December 31, 2011, and changes during the year ended December 31, 2011 is presented below:

				Weighted
				Average
	Number			Grant-Date
Nonvested Shares	of Options			Fair Value
Nonvested at December 31, 2010		225,000		$	1.06
Granted		21,000		$	1.51
Vested		(108,000	)	$	1.46
Forfeited		(11,000	)	$	2.06
Nonvested at December 31, 2011		127,000		$	0.97

At December 31, 2011, there was approximately $84,000 of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. This cost is expected to be recognized over a period of approximately five years.

The Company’s stock-based awards to employees are calculated using the Black-Scholes options valuation model. The Black-Scholes model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, the Black-Scholes model requires the input of highly subjective assumptions including the expected stock price volatility. The Company’s stock-based awards have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the present value estimates. For these reasons, management believes that the existing models do not necessarily provide a reliable single measure of the fair value of its stock-based awards to employees.

The fair value of the Company’s option grants issued during 2011, 2010 and 2009 were estimated using assumptions for expected life, volatility, dividend yield, forfeiture rate, and risk-free interest rate which are specific to each award as summarized in the following table. The estimated fair value of the Company’s options is amortized over the period during which the optionee is required to provide service in exchange for the award, usually the vesting period.

The fair value of the Company’s option grants under the Plan in 2011, 2010 and 2009 was estimated assuming the following weighted-average assumptions:

	2011			2010			2009
Expected life (years)		7.0			7.0			7.0
Expected forfeiture rate		2.0 - 3.7	%		0.0 - 4.6	%		0.0 - 2.0	%
Expected volatility		40 - 45	%		48 - 59	%		111 - 121	%
Dividend yield		0.0	%		0.0	%		0.0	%
Risk-free interest rate		3.0 - 3.3	%		3.0 - 4.1	%		3.3 - 3.5	%

Repurchase of Common Stock, Common Stock Warrants and Stock Options

In 1999 and 2001, the Board of Directors approved resolutions authorizing the Company to repurchase up to a total of 1,000,000 shares of its own stock on the open market, which the Board reaffirmed in 2008. There were no shares of the Company’s stock repurchased during 2011 or 2010. During 2009 the Company repurchased approximately 119,000 shares of its stock, of which 70,000 shares were purchased from two of the Company’s officers. There are approximately 81,000 shares remaining under this repurchase authorization.