10. Stock-based compensation

Medicsight has the following thirteen Stock Option Plans: .

Plan A — on February 26, 2003 we approved stock option plan “A” and in the period ended June 30, 2003 we granted options for 2,971,000 shares under this plan. At June 30, 2011 there were nil options outstanding.

Plan B — on August 15, 2005 we approved stock option plan “B” and between July 1, 2003 and March 31, 2005 we granted options for 3,420,500 shares under this plan. At June 30, 2011 there were 150,000 options outstanding, all of which were exercisable.

Plan C — on August 15, 2005 we approved stock option plan “C” and between April 1, 2005 and June 30, 2006 we granted options for 515,000 shares under this plan. Options issued under this plan vest in equal one-thirds after employees have been employed for 12, 24 and 36 months from date of grant. At June 30, 2011 there were 85,000 options outstanding, all of which were exercisable.

Plan D — On July 13, 2006 we approved stock option plan “D” and granted options for 1,375,000 shares under this plan. Options under this plan vest in equal one-thirds after employees have been employed for 12, 24 and 36 months from the date of grant. At June 30, 2011 there were nil options outstanding.

Plan E — on February 22, 2007 we approved and granted options for 5,900,000 shares under stock option plan “E”. Options under this plan vest in equal one-thirds after employees have been employed for 12, 24 and 36 months. At June 30, 2011 there were 790,000 options outstanding, all of which were exercisable.

Plan F — on May 16, 2007 we approved and subsequently granted options for 350,000 shares under stock option plan “F”. Options under this plan vest in equal one-thirds after employees have been employed for 12, 24 and 36 months from the grant date. At June 30, 2011 there were 50,000 options outstanding, all of which were exercisable.

Plan G — on December 18, 2007 we approved and subsequently granted options for 3,025,000 shares under stock option plan “G”. Options under this plan vest in equal one-thirds after employees have been employed for 12, 24 and 36 months from the grant date. At June 30, 2011 there were 150,000 options outstanding, all of which were exercisable.

Plan H — on June 2, 2008 we approved and subsequently granted options for 750,000 shares under stock option plan “H”. Options under this plan vest in equal one-thirds after employees have been employed for 12, 24 and 36 months from the grant date. At June 30, 2011 there were nil options outstanding.

Plan I — on December 16, 2008 we approved and subsequently granted options for 1,805,000 shares under stock option plan “I”. Options under this plan vest in equal one-thirds after employees have been employed for 12, 24 and 36 months from the grant date. At June 30, 2011 there were 100,000 options outstanding, of which 66,667 were exercisable.

Plan J — on May 14, 2009 we approved and subsequently granted options for 7,848,750 shares under stock option plan “J”. Options under this plan vest in equal one-sixths for each six months that employees have been employed for 6, 12, 18, 24, 30 and 36 months from the grant date. At June 30, 2011 there were 5,689,167 options outstanding, of which 3,795,076 were exercisable.

Plan K — on May 20, 2009 we approved and subsequently granted options for 300,000 shares under stock option plan “K”. Options under this plan vested in three tranches in the period to December 31, 2009. At June 30, 2011 there were nil outstanding options.

Plan L — on January 26, 2010 we approved and subsequently granted options for 100,000 shares under stock option plan “L”. Options under this plan vest in equal one-sixths after employees have been employed for 6, 12, 18, 24, 30 and 36 months from the grant date. At June 30, 2011 there were 100,000 options outstanding, 33,336 of which were exercisable.

Plan M — on December 13, 2010 we approved and subsequently granted options for 5,375,000 shares under stock option plan “M”. Options under this plan vest in equal one-sixths after employees have been employed for 6, 12, 18, 24, 30 and 36 months from the grant date. At June 30, 2011 there were 3,160,000 options outstanding, 526,772 of which were exercisable.

The following weighted average assumptions were used to estimate the fair value of stock options granted during the six months ended June 30, 2010:

	Six months ended June 31, 2010

Dividend yield		0	%
Expected volatility		88	%
Risk-free interest rate		3.96	%
Expected life of options	5.9 years

No grants were issued in the six months ended June 30, 2011.

The assumptions above are based on multiple factors including U.K. Treasury Bonds for the risk-free rate at the time of grant, expected future exercising patterns (we cannot base the estimate on the historical exercise patterns as no options have been exercised) and the volatility of Medicsight’s own stock price.

The assumptions used in the Black-Scholes option valuation model are highly subjective, and can materially affect the resulting valuation.

The following table summarizes stock option activity for the six months ended June 30, 2011 under all option plans:

	Outstanding						Exercisable
	Number of Shares			Weighted-Average Exercise Price			Number of Shares		Weighted-Average Exercise Price

Outstanding at December 31, 2010		13,703,334		£	0.13 ($0.20	)		4,928,052	£	0.23 ($0.37	)

Granted		—			—
Exercised		—			—
Forfeited		(3,429,167	)	£	0.06 ($0.10	)

Outstanding at June 30, 2011		10,274,167		£	0.15 ($0.24	)		5,646,851	£	0.21($0.34	)

The following is a summary of the status of stock options outstanding at June 30, 2011:

	Outstanding Options							Exercisable Options
	Number		Remaining Contractual Life (years)		Average Exercise Price			Number		Average Exercise price

Medicsight Plan B		150,000		3.2	$£	0.75 (1.21	)		150,000	$£	0.75 (1.21	)
Medicsight Plan C		85,000		4.6	$£	0.75 (1.21	)		85,000	$£	0.75 (1.21	)
Medicsight Plan E		790,000		5.6	$£	0.50 (0.81	)		790,000	$£	0.50 (0.81	)
Medicsight Plan F		50,000		5.9	$£	0.75 (1.21	)		50,000	$£	0.75 (1.21	)
Medicsight Plan G		150,000		6.5	$£	1.10 (1.78	)		150,000	$£	1.10 (1.78	)
Medicsight Plan I		100,000		7.5	$£	0.24 (0.39	)		66,667	$£	0.24 (0.39	)
Medicsight Plan J		5,689,167		7.9	$£	0.09 (0.15	)		3,795,076	$£	0.09 (0.15	)
Medicsight Plan L		100,000		8.6	$£	0.09 (0.15	)		33,336	$£	0.09 (0.15	)
Medicsight Plan M		3,160,000		9.5	$£	0.05 (0.08	)		526,772	$£	0.05 (0.08	)

On November 30, 2010, Mr. David Sumner, Chairman of Medicsight, resigned from his position within the group. Immediately after his resignation, a two year consultancy agreement was signed whereby Mr. Sumner would continue to assist the group in its commercial needs. As part of this agreement, Mr. Sumner was to continue to vest his existing Medicsight Plan J options throughout the consultancy period. A modification of the 2.0 million existing options has been accounted for, and is not considered to be material to the overall financial statements.

The Company has recorded the following amounts related to its share-based compensation expense in the accompanying Condensed Consolidated Statements of Operations:

	Three months ended June 30,				Six months ended June 30,
	2011		2010		2011		2010
Selling, general and administrative	$	126	$	409	$	139	$	830
Research and development		21		18		24		35
Discontinued operations		—		—		—		11
Total	$	147	$	427	$	163	$	876

Of the $163 stock-based expense for the six months ended June 30, 2011 $74 was allocated to non-controlling interest.

The aggregate intrinsic value for options outstanding and exercisable at June 30, 2011 and 2010 was $nil.

A summary of non-vested options at June 30, 2011 and the change during the six months ended June 30, 2011 is presented below:

	Options			Weighted Average Grant Date Fair Value
Nonvested options at January 1, 2011		8,775,282		£	0.10	$	(0.17	)
Granted		—			—		—
Vested		(1,492,143	)	£	0.14	$	(0.23	)
Forfeited		(2,655,823	)	£	0.09	$	(0.14	)
Nonvested options at June 30, 2011		4,627,316		£	0.10	$	(0.17	)

Issuance of restricted shares

At the March 7, 2011 board meeting, the members of the Compensation and Nominations Committee approved the grant of 500,000 restricted shares of MGT common stock, with each independent director of the board receiving 100,000 restricted shares. The restricted shares vest one-third each six months from date of issue. The unvested shares are subject to forfeiture if the applicable director is not a director of the Company at the time the restricted shares are to vest. The restricted shares were valued at their fair market value on date of issue, of which the share-based compensation expense will be recognized over their vesting period.

A summary of non-vested restricted shares at June 30, 2011 and the change during the six months ended June 30, 2011 is presented below.

	Options		Weighted Average Grant Date Fair Value
Nonvested restricted share at January 1, 2011		—		—		—
Granted		500,000	£	0.21	$	(0.34	)
Vested		—		—		—
Forfeited		—		—		—
Nonvested restricted shares at June 30, 2011		500,000	£	0.21	$	(0.34	)

In the six months ended June 30, 2011, the Company recognized $28 share-based compensation expense relating to the issuance of the restricted shares.

Unrecognized compensation cost

As of June 30, 2011 there was $759 of total unrecognized compensation cost related to non-vested share-based compensation arrangement. Of the $759 total unrecognized compensation cost, $617 related to non-vested share-based compensation granted under the option plans, and $142 related to non-vested share-based compensation granted under the restricted stock issuance. That cost is expected to be recognized over a weighted average period of 1.85 years.