Stock incentive plan and share-based compensation

3 Months Ended

Mar. 31, 2013

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

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

Note 9: 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 and Nomination 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 three months ended March 31, 2013, and March 31, 2012, respectively.

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.

Restricted shares vest one-third each six months from date of issue, except for a December 26, 2012, issuance, which vests three and eight months from issuance date requiring milestone conditions which have been met as of March 31, 2013. 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 are 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 three months ended March 31, 2013, and 2012, stock based compensation to employees and directors was $359 and $32, respectively.

A summary of the Company’s restricted stock as of March 31, 2013 is presented below:

	Number of shares			Weighted average grant  date fair value
Non-vested at December 31, 2012		314,667		$	5.20
Granted		-			-
Vested		(7,000	)		6.04
Forfeited		–			–
Non-vested at March 31, 2013		307,667		$	5.18

Unrecognized compensation cost

As of March 31, 2013, and 2012, unrecognized compensation costs related to non-vested share-based compensation arrangements was $1,178 and $nil, respectively. That cost is expected to be recognized over a weighted average period of 0.92 years.

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

	Three months ended March 31,
	2013		2012
Selling, general and administrative	$	359	$	25
Research and development		-		7
Total	$	359	$	32

Of the stock-based expense for the three months ended March 31, 2013, and 2012, $nil and $15, respectively, was allocated to non-controlling interest.

 Warrants

The following table summarizes information about warrants outstanding at March 31, 2013:

	Number of shares		Weighted average exercise price
Warrants outstanding at December 31, 2012		4,038,753	$	3.68
Issued		–		–
Exercised		–		–
Expired		–		–
Warrants outstanding at March 31, 2013		4,038,753	$	3.68

For the three months ended March 31, 2013, all issued warrants are exercisable and expire through 2017. There were no warrants issued for the three months ended March 31, 2012. As described in Note 12, the Company made an offer to the holders of the $3.85 Common Stock Purchase Warrants to exercise and exchange such warrants.