6. STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2013

Stock-Based Compensation

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

Options and Warrants

We have two long-term incentive plans which we refer to as the 2000 Plan and the 2006 Plan. The 2000 Plan was terminated as to future grants when the 2006 Plan was approved by the stockholders in 2006. As of March 31, 2013, we have reserved for issuance under the 2006 Plan 11,000,000 shares of common stock. Certain options granted under the 2006 Plan to employees are intended to qualify as incentive stock options under existing tax regulations. In addition, we may issue non-qualified stock options and warrants under the 2006 Plan from time to time to non-employees, in connection with acquisitions and for other purposes and we may also issue restricted stock under the 2006 Plan. Stock options and warrants generally vest over two to five years and expire five to ten years from date of grant.

As of March 31, 2013, 5,481,250, or approximately 89.4%, of the 6,131,250 outstanding stock options and warrants granted under our option plans are fully vested.  During the three months ended March 31, 2013, we did not grant options or warrants under the 2006 Plan.

We have issued warrants outside the 2006 Plan under various types of arrangements to employees, and in exchange for outside services. All warrants issued to employees or consultants after our February 2007 listing on the NASDAQ Global Market have been characterized as awards under the 2006 Plan.  All warrants outside the 2006 Plan have been issued with an exercise price equal to the fair value of the underlying common stock on the date of grant. The warrants expire from five to seven years from the date of grant.  Vesting terms are determined by the board of directors or the compensation committee of the board of directors at the date of grant.

As of March 31, 2013, 330,000, or 100%, of all the outstanding warrants outside the 2006 Plan are fully vested. During the three months ended March 31, 2013, we did not grant warrants outside of our 2006 Plan.

The following summarizes all of our option and warrant transactions in 2013:

Outstanding Options and Warrants				Weighted Average Exercise price Per Common		Weighted Average Remaining Contractual Life		Aggregate Intrinsic
Under the 2006 Plan and 2000 Plan	Shares			Share		(in years)		Value
Balance, December 31, 2012		6,231,250		$	3.58
Granted		–			–
Exercised		–			–
Canceled or expired		(100,000	)		9.23
Balance, March 31, 2013		6,131,250			3.49		1.67	$	1,392,200
Exercisable at March 31, 2013		5,481,250			3.52		1.54		1,292,317

				Weighted Average Exercise price Per		Weighted Average Remaining Contractual Life		Aggregate Intrinsic
Non-Plan Outstanding Warrants	Shares			Common Share		(in years)		Value
Balance, December 31, 2012		1,502,898		$	1.50
Granted		–			–
Exercised		(1,172,898	)		1.12
Canceled or expired		–			–
Balance, March 31, 2013		330,000			2.87		1.85	$	36,000
Exercisable at March 31, 2013		330,000			2.87		1.85		36,000

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on March 31, 2013 and the exercise price, multiplied by the number of in-the-money options or warrants, as applicable) that would have been received by the holder had all holders exercised their options or warrants, as applicable, on March 31, 2013. Total intrinsic value of options and warrants exercised during the three months ended March 31, 2013 and 2012 was approximately $2.3 million and $265,000, respectively. As of March 31, 2013, total unrecognized stock-based compensation expense related to non-vested employee awards was approximately $668,000, which is expected to be recognized over a weighted average period of approximately 1.0 year.

Restricted Stock Awards

The 2006 Plan permits the award of restricted stock. On January 2, 2013, we granted awards for 450,000 shares of our common stock to certain employees. Of the awards granted, 170,000 were vested on the award date, 140,000 cliff vest after one year provided that the employees remain continuously employed through the vesting date and 140,000 cliff vest after two years provided that the employees remain continuously employed through the vesting date. We valued the awards based on the closing market price of our stock on January 2, 2013 which was $2.51 per share.

At March 31, 2013, the total unrecognized fair value of all restricted stock awards was approximately $1.4 million, which will be recognized over the remaining vesting period of 2.0 years.

In sum, of the 11,000,000 shares of common stock reserved for issuance under the 2006 Plan, at March 31, 2013, we had 7,563,750 options, warrants and shares of restricted stock outstanding and 3,416,250 available for grant.