Quarterly report pursuant to Section 13 or 15(d)

Note 3 - Stock-Based Compensation

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Note 3 - Stock-Based Compensation
 3 Months Ended
Sep. 30, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
3.
STOCK-BASED COMPENSATION

Stock-based compensation expense totaled approximately $38,000 and $22,000 for the three months ended September 30, 2010 and 2011, respectively, and approximately $140,000 and $57,000 for the nine months ended September 30, 2010 and 2011, respectively.  No tax benefits were attributed to the stock-based compensation because a valuation allowance was maintained for substantially all net deferred tax assets.

The following table summarizes the Company’s stock option activity:

   
 
 
Shares
   
Wtd. Avg.
Exercise
Price
   
Wtd. Avg.
Remaining
Contractual
Life
   
Aggregate
Intrinsic
Value1
 
                         
Outstanding at December 31, 2010
    22,500     $ 1.80              
Cancelled, forfeited or expired
    –       –              
Outstanding at September 30, 2011
    22,500       1.80       0.1     $ –  
                                 
Vested and expected to vest at September 30, 2011
    22,500       1.80       0.1       –  
Exercisable at September 30, 2011
    22,500       1.80       0.1       –  

1 Aggregate intrinsic value is defined as the positive difference between the current market value and the exercise price and is estimated using the closing price of the Company’s common stock on the last trading day of the periods ended as of the dates indicated (in thousands).
No stock options vested during the nine months ended September 30, 2010 and 2011.  As of September 30, 2011, no unrecognized stock-based compensation expense related to stock options is remaining.  All stock options outstanding at September 30, 2011 have an exercise price of $1.80 per share.

The following table summarizes the Company’s restricted stock activity:

   
 
 
Shares
   
Wtd. Avg.
Price at
Date of
Issuance
 
       
Outstanding at December 31, 2010
    114,613     $ 0.45  
Granted
    600,000       0.36  
Vested
    (185,137 )     0.38  
Forfeited
    (18,748 )     0.69  
Outstanding at September 30, 2011
    510,728       0.36  

On May 12, 2011, the Company granted 600,000 shares of restricted stock under the 2007 Equity Incentive Plan to its executive officers, directors, and certain key employees.  The restricted stock vests quarterly on a pro rata basis over a three-year period.

As of September 30, 2011, total unrecognized stock-based compensation expense related to non-vested restricted stock was approximately $202,000, which is expected to be recognized over a weighted-average period of 2.4 years.