Stock incentive plan and share-based compensation

12 Months Ended

Dec. 31, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 15. Stock incentive plan and share-based compensation

Stock incentive plan

The Company’s board of directors established the 2012 Stock Incentive Plan (the “Plan”) on April 15, 2012, and the Company’s shareholders ratified the Plan at the annual meeting of the Company’s stockholders on May 30, 2012. The Company has 415,000 shares of Common stock that are reserved to grant Options, Stock Awards and Performance Shares (collectively the “Awards”) to “Participants” under the Plan. The Plan is administered by the board of directors or the Compensation Committee of the board of directors, which determines the individuals to whom awards shall be granted as well as the type, terms and conditions of each award, the option price and the duration of each award.

Options granted under the Plan vest as determined by the Company’s Compensation and Nominations Committee and expire over varying terms, but not more than seven (7) years from date of grant. In the case of an Incentive Stock Option that is granted to a 10% shareholder on the date of grant, such Option shall not be exercisable after the expiration of five (5) years from the date of grant. No option grants were issued during the year ended December 31, 2012.

Issuance of restricted shares

At the June 25, 2012, board meeting, the members of the Compensation and Nominations Committee approved the grant of 232,000 restricted shares of MGT Common stock under the Plan, with each current independent director of the board receiving 21,000 restricted shares and 190,000 shares awarded to officers and certain employees. These shares were subsequently issued on August 9, 2012. On August 20, 2012, 6,000 restricted shares were granted and issued to a certain employee. On November 19, 2012, 30,000 restricted shares were granted to the independent directors and 114,000 restricted shares were granted to officers and certain employees. These shares were subsequently issued on December 18, 2012. On October 29, 2012, 10,000 restricted shares were granted to a certain employee and subsequently issued on December 26, 2012.

The restricted shares vest one-third each six months from date of issue, except for the December 26, 2012, issuance, which vest three and eight months from issuance date requiring milestone conditions, none of which have been met as of December 31, 2012. The unvested shares are subject to forfeiture if the applicable recipient is not a director, officer and/or employee of the Company at the time the restricted shares are to vest. The restricted shares were valued using the closing market price on date of grant, of which the share-based compensation expense will be recognized over their vesting period. For the years ended December 31, 2012, and 2011, stock based compensation to employees and directors was $536 and $nil, respectively.

A summary of the Company’s restricted stock as of December 31, 2012 is presented below:

	Number of shares			Weighted average grant  date fair value
Non-vested at December 31, 2011		–		$	–
Granted		392,000			5.28
Vested		(77,333	)		5.62
Forfeited		–			–
Non-vested at December 31, 2012		314,667		$	5.20

Unrecognized compensation cost

As of December 31, 2012, there was $1,534 of total unrecognized compensation costs related to non-vested share-based compensation arrangements. That cost is expected to be recognized over a weighted average period of 1.1 years.

Issuance of shares to former directors

At the June 25, 2012, board meeting, the members of the Compensation and Nominations Committee approved the issuance of 33,000 shares of Common stock to certain of our former directors for past service on the Company’s board of directors. These shares were approved on August 7, 2012 and were issued and vested on August 10, 2012. The stock was valued at $185, using the closing market price on June 25,2012, the date of grant. For the year ended December 31, 2012, and 2011, stock based compensation to former directors was $185 and $nil, respectively.

Warrants

The following table summarizes information about warrants outstanding at December 31, 2012:

	Number of shares		Weighted average exercise price
Warrants outstanding at December 31, 2011		–	$	–
Issued		4,038,753		3.68
Exercised		–		–
Expired		–		–
Warrants outstanding at December 31, 2012		4,038,753	$	3.68

As of December 31, 2012, all 4,038,753 issued warrants are exercisable and expire through 2017.

Medicsight Ltd equity plan

On March 26, 2012, at Medicsight Ltd’s General Meeting, stockholders approved a resolution to effect a Reverse Split of the Company’s existing ordinary shares of £0.05 par value per share into 1 new ordinary share of £16,250 par value per share and for MGT to acquire all New Ordinary Shares representing the fractions of shares left over following the Reverse Split. The exchange ratio for the Reverse Split was 1 for 325,000. As a result of the Reverse Split, stockholders holding fewer than 325,000 shares were cancelled and not entitled to a cash payment for fractional shares.

Following Medicsight’s general meeting on March 26, 2012 (Note 14), a shareholder resolution approving the Reverse Split of 1-for-325,000 of the Company’s existing ordinary shares of £0.05 par value into one new ordinary share was duly passed. As a result of the reverse split, option holders under certain existing share option plans are no longer entitled to options under those plans as option holders’ share entitlement is now less than one as a result of the Reverse Split. Following the share reversal, the Company cancelled with immediate effect all redundant option plans with the exception of Plan J. All previously unrecognized stock based compensation expense of $32 was accelerated during the year ended December 31, 2012.

On December 6, 2012, the Company initiated the process of dissolving the non-essential subsidiary of Medicsight Ltd. resulting in the cancellation of stock option Plan J. For the year ended December 31, 2012, there were no grants issued and all options were fully vested and expensed prior to the cancellation of stock option Plan J.

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

	Year ended December 31,
	2012		2011
Selling, general and administrative	$	746	$	215
Research and development		7		32
Total	$	753	$	247

Of the stock-based expense for the year ended December 31, 2012, and 2011, $15 and $113, respectively, was allocated to non-controlling interest.