Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Note 4 — Stock-Based Compensation

The Company follows the guidance in FASB ASC Topic 718, “Compensation — Stock Compensation”, (“ASC 718”). The Company issued 864,616 and 2,795,533 stock options in the three months and nine months ended September 30, 2011, respectively. The Company issued 200,000 and 310,000 shares of restricted stock in the three and nine months ended September 30, 2011, respectively. In the three and nine months ended September 30, 2010, the Company issued 57,700 and 186,018 stock options, respectively. The Company issued 530,500 shares of restricted stock in the nine months ended September 30, 2010. The Company did not issue any shares of restricted stock in the three months ended September 30, 2010.

In accordance with ASC 718, the Company recorded $100,000 and $684,000 of stock-based compensation expense for the three months and nine months ended September 30, 2011, respectively, and $280,000 and $1,261,000 of stock based compensation expense in the three and nine months ended September 30, 2010, respectively.

Options granted under the Company’s stock incentive plans were valued utilizing the Black-Scholes model using the following assumptions and had the following fair values:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Average risk-free interest rate		2.21	%		1.58	%		2.78	%		2.14	%
Expected dividend yield	None			None			None			None
Expected life	3.5 years			3.5 years			3.5 years			3.5 years
Expected volatility	67.0% to 67.6%			70.5% to 71.2%			67.0% to 69.2%			65.6% to 71.6%
Weighted average exercise price	$	0.95		$	1.82		$	1.12		$	1.65
Weighted average fair value	$	0.47		$	0.79		$	0.56		$	0.69

As of September 30, 2011, there was approximately $1,699,000 of total unrecognized compensation cost related to unvested options and restricted stock. That cost is expected to be recognized over a weighted average period of 1.35 years.

The Company’s aggregate intrinsic value of options outstanding at September 30, 2011 was approximately $0. The aggregate intrinsic value of restricted stock outstanding at September 30, 2011, was approximately $294,000. The Company’s aggregate intrinsic value of options outstanding at September 30, 2010 was approximately $489,000. The aggregate intrinsic value of restricted stock outstanding at September 30, 2010, was approximately $1.4 million.