EQUITY TRANSACTIONS

9 Months Ended

Sep. 30, 2012

EQUITY TRANSACTIONS

EQUITY TRANSACTIONS

NOTE 7—EQUITY TRANSACTIONS

        We account for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation. Total stock-based compensation expense recognized during the three and nine months ended September 30, 2012 was $0.2 million and $0.9 million, and for the three and nine months ended September 30, 2011 was $0.4 million and $0.8 million, respectively. These amounts are included in general and administrative expenses in our consolidated statements of operations.

        Nonqualified stock options ("Stock Options") and restricted stock units ("RSUs") are approved by the Compensation Committee of the Board of Directors and are granted to executive officers, certain key employees and nonemployee members of the Board of Directors as permitted under the 2010 Long-Term Incentive Plan ("2010 Plan"). Stock Options primarily vest ratably over three years and RSUs granted to employees primarily vest and become non-forfeitable upon the third anniversary of the date of grant. RSUs granted to non-employee directors vest immediately and are delivered upon the date that is the earlier of termination of service on the Board of Directors or the consummation of a change of control of the Company.

        A summary of the Stock Option activity for the nine months ended September 30, 2012 is as follows:

	Options			Range of Exercise Prices		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life		Aggregate Intrinsic Value
								(in years)		(in millions)
Outstanding—December 31, 2011		800,800		$	2.04–16.27	$	6.22		6.81	$	—
Granted		392,100			2.44–4.02		2.53
Exercised		—			—		—
Expired		(25,000	)		15.00		15.00
Forfeited		—			—		—
Outstanding—September 30, 2012		1,167,900		$	2.04–$16.27	$	4.79		7.28	$	1.7
Exercisable at September 30, 2012		502,824		$	2.04–$16.27	$	7.90		5.11	$	0.4

        The weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2012 was $1.65 per share.

        As of September 30, 2012, there was $0.8 million of unrecognized compensation expense related to non-vested stock option awards that is expected to be recognized over a weighted-average period of approximately 1.98 years.

        The fair value of each stock option granted under the 2010 Plan is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for options granted during the nine months ended September 30, 2012:

Assumptions:
Expected dividend yield(1)	N/A
Expected stock price volatility(2)	74.3	%
Risk-free interest rates(3)	1.32	%
Expected term of options (in years)(4)	6.00

(1)

The expected dividend yield was based on our expectation of not paying dividends for the foreseeable future.

(2)

The expected volatility was based on the historical volatility of our common stock.

(3)

Based on the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected term of our stock options.

(4)

Represents the period of time options are expected to be outstanding. The weighted average expected term was determined using the "simplified method" for plain vanilla options as the Company lacks sufficient historical exercise experience. The "simplified method" calculates the expected term as the average of the vesting term and original contractual term of the options.

        A summary of the RSU activity for the nine months ended September 30, 2012 is as follows:

	RSUs			Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Life		Aggregate Fair Value
						(in years)		(in millions)
Unvested outstanding as of December 31, 2011		227,769		$	2.11		1.85	$	0.4
Granted		192,790			3.39
Vested		(102,190	)		3.88
Forfeited		—			—
Unvested outstanding as of September 30, 2012		318,369		$	2.32		1.83	$	1.3

        As of September 30, 2012, we had approximately $0.5 million of unrecognized compensation expense related to unvested RSUs that is expected to be recognized over a weighted-average period of approximately 1.83 years.