Stock-Based Compensation Plans

6 Months Ended

Jun. 30, 2011

Stock-Based Compensation Plans [Abstract]

STOCK-BASED COMPENSATION PLANS

(4) STOCK-BASED COMPENSATION PLANS

The Company has a 2005 Stock Option Plan (the “Option Plan”) and has reserved 3,000,000 shares of common stock for issuance under the Option Plan. Vesting provisions are determined by the Board of Directors. All stock options under the Option Plan expire no later than ten years from the date of grant.

For the three months ended June 30, 2011 and 2010, the Company recorded compensation expense related to stock options of $68 and $65, respectively. For the six months ended June 30, 2011 and 2010, the Company recorded compensation expense related to stock options of $146 and $126, respectively. The stock-based compensation expense was included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

For the six months ended June 30, 2011, the Company granted options to purchase up to 173,500 shares of common stock to employees at exercise prices that ranged from $0.62 to $1.06 per share. During the six months ended June 30, 2010, the Company granted options to purchase up to 178,500 shares of common stock at exercise prices that ranged from $0.63 to $1.06 per share.

The Company used the Black-Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions during the six months ended June 30, 2011 and 2010:

	2011	2010
Expected term	6.25 years	6.25 years
Volatility	105.9% - 107.6%	110.8% - 113.6%
Risk-free interest rate	2.74% - 2.90%	2.62% - 3.36%
Dividend yield	0%	0%

The expected term of stock options represents the period of time that the stock options granted are expected to be outstanding based on historical exercise trends. The expected volatility is based on the historical price volatility of the Company’s common stock. The risk-free interest rate represents the U.S. Treasury bill rate for the expected term of the related stock options. The dividend yield represents the Company’s anticipated cash dividend over the expected term of the stock options. Forfeitures of share-based payment awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The estimated average forfeiture rate for the six months ended June 30, 2011 and 2010 was 35%.

A summary of stock option activity under the Option Plan for the six months ended June 30, 2011, is presented below:

						Weighted
				Weighted		Average
	Shares			Average		Remaining	Aggregate
	Under			Exercise		Contractual	Intrinsic
	Option			Price		Life	Value
Outstanding at January 1, 2011		1,845,250		$	0.96
Granted		173,500		$	0.66
Exercised		(112,500	)	$	0.43
Forfeited		(205,500	)	$	0.78
Outstanding at June 30, 2011		1,700,750		$	0.99	7.1 Years	$	212
Exercisable at June 30, 2011		699,125		$	1.15	3.7 Years	$	75

A summary of status of the Company’s non-vested share awards as of and for the six months ended June 30, 2011, is presented below:

	Nonvested Shares			Weighted Average
	Shares Under Option			Grant Date Fair Value
Non-vested at January 1, 2011		1,195,750		$	0.79
Granted		173,500		$	0.58
Vested		(189,625	)	$	0.89
Forfeited		(178,000	)	$	0.62
Non-vested at June 30, 2011		1,001,625		$	0.76

As of June 30, 2011, the Company had approximately $499 of unrecognized compensation expense related to stock options that will be recognized over a weighted-average period of approximately four years.