RESTRICTED STOCK

3 Months Ended

Mar. 31, 2013

Notes to Financial Statements

Note 10. RESTRICTED STOCK

 During the three months ended March 31, 2013, the Company granted an aggregate of 118,375 restricted shares of Common Stock to certain officers, employees, directors and consultants of the Company.  The grants were issued pursuant to the 2008 Plan.  The grant date fair value of these restricted stock grants was approximately $97,324.  Share-based compensation expense related to restricted stock recognized in the three months ended March 31, 2013 and March 31, 2012 was approximately $161,000 and $29,000, respectively.

 A summary of the Company’s nonvested restricted stock activity as of and for the three months ended March 31, 2013, is as follows:

Restricted Stock	Shares			Weighted- Average Grant-Date Fair Value
Nonvested at January 1, 2013		3,160,417		$	1.66
Granted this period		118,375			0.82
Vested		(100,104	)		2.16
Forfeited		—			—
Nonvested at March 31, 2013		3,178,688		$	1.68

 Among the 3,178,688 shares of non-vested restricted stock, the various vesting criteria include the following:

· 1,679,594 shares of restricted stock vest upon the FDA approval of Symphony or the sale of the Company;

· 220,000 shares of restricted stock vest upon the sale of the Company; and

· 1,279,094 shares of restricted stock vest over one to four years, at each of the anniversary dates of the grants.

 As of March 31, 2013, there was approximately $1,713,000 of total unrecognized compensation expense related to non-vested share-based restricted stock arrangements granted pursuant to the Company’s equity compensation plans that vest over time in the foreseeable future. As of March 31, 2013, the Company cannot estimate the timing of completion of performance vesting requirements required by certain of these restricted stock grant arrangements.  Compensation expense related to these restricted share grants will be recognized when the Company concludes that achievement of the performance vesting conditions is probable.