Stockholders' Equity

6 Months Ended

Jun. 29, 2013

Equity [Abstract]

Stockholders' Equity

3. Stockholders’ Equity

The following is a summary of stockholders’ equity transactions for the six months ended June 29, 2013:

	Convertible										Capital in
	Preferred Stock					Common Stock					Excess of		Accumulated
	Shares			Amount		Shares			Amount		Par Value		Deficit			Total
Balance at December 31, 2012		564,642		$	1,000		4,193,690		$	4,000	$	272,231,000	$	(261,944,000	)	$	10,292,000
Issuance of common stock net of offering cost							513,827			1,000		1,945,000					1,946,000
Conversion of preferred stock to common stock		(28,122	)				23,432
Cancellation of shares from reverse stock split							(2,865	)
Stock-based compensation							23,200					295,000					295,000
Net loss														(4,844,000	)		(4,844,000	)
Balance at June 29, 2013		536,520		$	1,000		4,751,284		$	5,000	$	274,471,000	$	(266,788,000	)	$	7,689,000

Equity Offering

In a registered direct offering completed April 26, 2013 we raised proceeds of $1.95 million, net of offering costs of $236,000, from the sale of 513,827 shares of common stock and an equal number of warrants.

Stock Options

At June 29, 2013 we had no active equity award option plans. Under our last plan, the 2003 Equity Incentive Plan, which expired March 19, 2013, stock awards were made to our directors, key employees, consultants, and non-employee directors and consisted of stock options, stock appreciation rights, restricted stock awards, performance awards, and performance share awards. Stock options were granted at prices no less than the market value on the date of grant. There were no stock option exercises during the three or six months ended June 29, 2013 or during the three or six months ended June 30, 2012.

The impact to the condensed consolidated statements of operations was $82,000 and $161,000 and $0.02 and $0.03 on basic and diluted earnings per share for the three and six months ended June 29, 2013, respectively, compared to $88,000 and $242,000 and $0.03 and $0.08 on basic and diluted earnings per share for the three and six months ended June 30, 2012, respectively. No stock compensation cost was capitalized during either period. The total compensation cost related to nonvested awards not yet recognized was $528,000 and the weighted-average period over which the cost is expected to be recognized was 1.1 year at June 29, 2013.

The following is a summary of stock option transactions under our stock option plans at June 29, 2013:

	Number of Shares			Price Per Share		Weighted Average Exercise Price		Number of Options Exercisable		Weighted Average Exercise Price
Balance at December 31, 2012		105,383		$	8.16 - $ 894.00	$	46.08		74,706	$	56.52
Granted		33,333			2.52		2.52
Exercised		—
Canceled		(1,798	)		19.44 - 796.80		147.68
Balance at June 29, 2013		136,918		$	2.52 - $ 894.00	$	34.11		94,673	$	46.44

The outstanding options expire on various dates through June 2022. The weighted-average contractual term of options outstanding is 6.7 years and the weighted-average contractual term of stock options currently exercisable is 5.6 years. The exercise prices for these options range from $2.52 to $894 per share, for an aggregate exercise price of approximately $4.7 million. At June 29, 2013, outstanding options covering 33,333 shares, with an intrinsic value of $21,000, had an exercise price less than the current market value and none were exercisable.

Restricted Stock Awards

The grant date fair value of each share of our restricted stock awards is equal to the fair value of our common stock at the grant date. Shares of restricted stock under awards all have service conditions and vest over one to four years. Some of our grants also have performance conditions. The following is a summary of our restricted stock award transactions at June 29, 2013:

	Number of Shares			Weighted Average Grant Date Fair Value
Balance nonvested at December 31, 2012		37,190		$	18.00
Granted		29,167			2.52
Vested		(14,587	)		18.71
Forfeited		(5,967	)		16.27
Balance nonvested at June 29, 2013		45,803		$	8.24

For the majority of restricted stock awards granted, the number of shares issued on the date the restricted stock awards vest is net of the minimum statutory withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. During the three and six months ended June, 30, 2012, we withheld 603 and 8,102 shares, respectively, to satisfy $5,000 and $134,000 of employees’ tax obligations. There was no such withholding in the three and six months ended June 29, 2013.

The impact to the condensed consolidated statements of operations was $48,000 and $134,000 and $0.01 and $0.03 on basic and diluted earnings per share for the three and six months ended June 29, 2013 respectively, and $149,000 and $317,000 and less than $0.04 and $0.10 on basic and diluted earnings per share for the three and six months ended June 30, 2012 respectively. No stock compensation cost was capitalized during the period. The total compensation cost related to nonvested awards not yet recognized was $156,000, and the weighted-average period over which the cost is expected to be recognized was 9 months.

Warrants

The following is a summary of outstanding warrants at June 29, 2013:

	Common Shares
	Total		Currently Exercisable		Price per Share		Expiration Date
Warrants related to February 2012 financing		419,451		419,451	$	16.20	February 22, 2017
Warrants related to November 2012 financing		8,333		—		4.50	November 26, 2015
Warrants related to December 2012 financing		15,625		—		4.50	December 18, 2015
Warrants related to April 2013 financing		256,914		—		5.45	April 26, 2015
Warrants related to April 2013 financing		256,913		—		5.45	April 26, 2019

These warrants are exercisable by paying cash or, solely in the absence of an effective registration statement or prospectus, by cashless exercise for unregistered shares of common stock. The exercise price of the warrants is subject to standard antidilutive provision adjustment in the case of stock dividends or other distributions on shares of common stock or any other equity or equity equivalent securities payable in shares of common stock, stock splits, stock combinations, reclassifications or similar events affecting our common stock, and also, subject to limitations, upon any distribution of assets, including cash, stock or other property to our stockholders. The exercise price of the warrants is not subject to “price-based” anti-dilution adjustment. We have determined that these warrants related to issuance of common stock are subject to equity treatment because the warrant holder has no right to demand cash settlement and there are no unusual anti-dilution rights.