Stock-Based Compensation Arrangements

6 Months Ended

Jun. 30, 2013

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

Stock-Based Compensation Arrangements

Note 9—Stock-Based Compensation Arrangements

Total stock-based compensation is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Stock option grants beginning of period	$	25,243	$	48,185	$	51,965	$	94,796
Stock-based arrangements during the period:
Stock option grants		3,061		3		6,110		3
Restricted stock issued:
Employee stock purchase plan		1,291		169		2,208		1,332
	$	29,595	$	48,357	$	60,284	$	96,131

Stock option and restricted stock grants

The following table details stock option and restricted stock activity for the six months ended June 30, 2013 and 2012:

		Six Months Ended		June 30, 2013		Six Months Ended		June 30, 2012
	Shares		Weighted Avg Exercise Price		Shares		Weighted Avg Exercise Price
Outstanding, beginning of period		2,302,000	$	1.06		2,228,067	$	1.14
Stock options granted		200,000		0.29		500		0.34
Stock options exercised		(2,000)		0.12		—		—
Restricted stock exercised		(2,500)		0.00		(2,500)		0.00
Canceled/Expired		(80,250)		1.58		(125,800)		0.59
Outstanding, end of period		2,417,250	$	.98		2,100,267	$	1.17
Exercisable, end of period		1,443,075	$	1.40		1,393,217	$	1.50

During the six month period ended June 30, 2013, the Company granted 200,000 stock options under the 2004 Employee, Director & Consultant Stock Plan. At June 30, 2013, the Company had an aggregate of 1,860,030 shares of common stock available for grant under this plan.

It is the Company’s policy to grant stock options with an exercise price equal to the fair market value of the Company’s common stock at the grant date, and stock options to employees generally vest over four years based upon continuous service. Historically, the majority of the Company’s stock options have been granted in connection with the employee’s start date with the Company. In addition, the Company may grant stock options in recognition of promotion and/or performance.

Employee Stock Purchase Plan

Purchases made under the Company’s Employee Stock Purchase Plan are deemed to be compensatory because employees may purchase stock at a price equal to 85% of the fair market value of the Company’s common stock on either the first day or the last day of a calendar quarter, whichever is lower. During the six months ended June 30, 2013 and 2012, employees purchased 50,624 and 52,158 shares, respectively, of common stock at a weighted-average purchase price of $0.26 and $0.17, respectively, while the weighted-average market value was $0.30 and $0.20 per share, respectively, resulting in compensation expense of $2,208 and $1,332, respectively.

Restricted Stock Awards

Holders of restricted stock awards participate fully in the rewards of stock ownership of the Company, including voting and dividend rights. Recipients of restricted stock awards are generally not required to pay any consideration to the Company for these restricted stock awards. The Company measures the fair value of the shares based on the last reported price at which the Company’s common stock traded on the date of the grant and compensation cost is recognized over the remaining service period. During each of the six months ended June 30, 2013 and 2012, the Company granted no restricted stock awards.

At June 30, 2013, there was approximately $252,000 of total unrecognized compensation related to non-vested share-based compensation arrangements granted under the Company’s stock plans.