Stockholders' Equity |
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Stockholders' Equity [Text Block] |
Note 8. Stockholders’ Equity At September 30, 2011 there are 500,000,000 shares of authorized common stock. Total common stock outstanding at September 30, 2011 and December 31, 2010 was 12,399,883 and 12,345,840, respectively. At September 30, 2011, there were 13,578 shares reserved for future issuance, 1,034,996 stock warrants, 133,808 unvested restricted stock shares (of which 50,075 shares were issued but not outstanding as of September 30, 2011) and 1,724,149 stock options outstanding, all totaling 15,306,414 of total stock and stock equivalents outstanding at September 30, 2011. Stock Options and Restricted Stock Grants Stock Plan We have a stock-based compensation plan to reward for services rendered by officers, directors, employees and consultants. On July 17, 2006, we amended this stock plan. We have reserved 2,500,000 shares of common stock of our unissued share capital for the stock plan. Other limitations are as follows:
Total stock options outstanding at September 30, 2011 were 1,724,149 of which 1,392,106 of these options were vested at September 30, 2011. Stock option expense was approximately $0.2 million and approximately $0.6 million for the three months ended September 30, 2011 and 2010, respectively and $0.8 million and $1.9 million for the nine months ended September 30, 2011 and 2010, respectively. Stock option transactions to the employees, directors, advisory board members and consultants are summarized as follows for the nine months ended September 30, 2011 were as follows:
The above table includes options issued as of September 30, 2011 as follows:
The following table provides certain information with respect to the above-referenced stock options that are outstanding and exercisable at September 30, 2011:
The aggregate intrinsic value of stock options outstanding at September 30, 2011 was $0. Intrinsic value is calculated based on the difference between the exercise price of the underlying awards and the quoted price of our common stock as of the reporting date ($2.57 per share as of the close on September 30, 2011). Restricted Stock Award Activity The following summarizes our restricted stock unit activity:
Scheduled vesting for outstanding restricted stock units at September 30, 2011 is as follows:
As of September 30, 2011, there was $0.6 million of net unrecognized compensation cost related to unvested restricted stock-based compensation arrangements. This compensation is recognized on a straight line basis resulting in approximately $0.38 million of the compensation expected to be expensed in the next twelve months, and the total unrecognized has a weighted average recognition period of 1.58 years. We use the historical volatility of our stock price since January 5, 2006, the date we announced that we were becoming a public company, to estimate the future volatility of our stock. At this time we do not believe that there is a better objective method to predict the future volatility of our stock. We estimate the term of our option awards based on the full term of the award. To date we have had very few exercises of our options, and those exercises have occurred just before the expiration date of the awards. Since the strike price of most of our outstanding awards is greater than the price of our stock, generally awards have expired at the end of the term. We estimate the effect of future forfeitures of our grants based on an analysis of historical forfeitures of unvested grants, as we have no better objective basis for that estimate. The expense that we have recognized related to our grants of options and restricted stock includes the estimate for future pre-vest forfeitures. We will adjust the actual expense recognized as future pre-vest forfeitures occur. We have estimated that 1.5% and 3.8% of our option and restricted stock grants respectively, will be forfeited prior to vesting. Assumptions used in the Black Scholes option-pricing model for the nine months ended September 30, 2011 and the year ended December 31, 2010 were as follows:
Stock-based compensation expense includes the expense related to (1) grants of stock options, (2) grants of restricted stock, (3) stock issued as consideration for some of the services provided by our directors and strategic advisory council members, and (4) stock issued in lieu of cash to pay bonuses to our employees and contractors. We record stock-based compensation expenses in the caption with all of our other general and administrative expenses. Grants of stock options and restricted stock are awarded to our employees, directors, consultants and board members, and we recognize the fair market value of these awards ratably as they are earned. The expense related to payments in stock for services is recognized as the services are provided. During the three months ended September 30, 2011 and 2010, approximately $0.4 million and $0.7 million was recorded as stock-based compensation, respectively and $1.1 million and $2.3 million for the nine months ended September 30, 2011, was recorded as total stock-based compensation, respectively. Common Stock reserved for Future Issuance Common stock reserved for future issuance at September 30, 2011 consists of:
Stock Warrants On July 22, 2010 we completed an offering (the “Offering”) with certain institutional investors on the sale of 2,069,992 shares of its common stock and warrants to purchase a total of 1,034,996 shares of its common stock for aggregate gross proceeds, before deducting fees to the Placement Agent and other estimated offering expenses payable by us, of approximately $13.7 million. The common stock and warrants were sold in fixed combinations, with each combination consisting of one share of common stock and a warrant to purchase 0.5 shares of common stock. The purchase price was $6.60 per fixed combination. The warrants became exercisable six months and one day following the closing date (July 28, 2010) of the Offering and will remain exercisable for seven years from the date of issuance at an exercise price of $9.00 per share. The exercise price of the warrants is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions. The exercisability of some of the warrants may be limited if, upon exercise, the holder or any of its affiliates would beneficially own more than 4.99% of our common stock. This limit may be increased to up to 9.99% upon no fewer than 60 days' notice. |