Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation Plans [Abstract]

STOCK-BASED COMPENSATION PLANS

(4) STOCK-BASED COMPENSATION PLANS

The Company has reserved 3,000,000 shares of common stock for issuance under its 2005 Stock Option Plan (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.

In the three months ended September 30, 2011 and 2010, the Company recorded compensation expense related to stock options of $61 and $77, respectively. In the nine months ended September 30, 2011 and 2010, the Company recorded compensation expense related to stock options of $207 and $203, respectively. The stock-based compensation expense was included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

In the nine months ended September 30, 2011, the Company granted options to purchase up to 274,000 shares of common stock to employees at exercise prices that ranged from $0.62 to $0.90 per share. In the nine months ended September 30, 2010, the Company granted options to purchase up to 374,500 shares of common stock at exercise prices that ranged from $0.41 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 nine months ended September 30, 2011 and 2010:

	2011			2010
Weighted average expected term	7 years			6 years
Weighted average volatility		121.3	%		111.5	%
Weighted average risk-free interest rate		2.33	%		2.73	%
Dividend yield		0	%		0	%

The weighted average 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 weighted average expected volatility is based on the historical price volatility of the Company’s common stock. The weighted average 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 nine months ended September 30, 2011 and 2010 was 35%.

A summary of stock option activity under the Option Plan for the nine months ended September 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		274,000		$	0.74
Exercised		(112,500	)	$	0.43
Forfeited		(354,000	)	$	0.85
Outstanding at September 30, 2011		1,652,750		$	0.98	7.7 Years	$	156
Exercisable at September 30, 2011		752,003		$	1.12	6.8 Years	$	76

A summary of status of the Company’s non-vested share awards as of and for the nine months ended September 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		274,000		$	0.66
Vested		(296,128	)	$	0.86
Forfeited		(272,875	)	$	0.73
Non-vested at September 30, 2011		900,747		$	0.86

As of September 30, 2011, the Company had approximately $382 of unrecognized compensation expense related to stock options that will be recognized over a weighted-average period of approximately 2.4 years.