Equity

12 Months Ended

Dec. 31, 2012

Equity

Note 21. Equity

Issuance of Common Stock and Warrants

Stock Warrants

The Company accounts for equity instruments issued to non-employees based on the fair value of the equity instruments issued. The Warrants were exercisable on a cashless basis under certain circumstances, and are callable by the Company on a cashless basis under certain circumstances.

Roth Capital Partners, LLC acted as exclusive placement agent for the 2007 Private Placement and received cash and warrants to purchase 105,000 shares of the Company’s common stock as a placement agent fee. The Warrants were issued the day after the closing of the 2007 Private Placement (September 11, 2007) and were exercisable after the sixth month anniversary of the issuance date of the Warrants until September 11, 2012. The warrant holder can purchase 105,000 shares of the Company’s common stock. The Warrants have an exercise price of $7.18 per share. On May 18, 2012, the holder of the outstanding warrants elected to exercise its rights to purchase 105,000 warrant shares under the cashless exercise provisions of the warrant. Under the cashless exercise provisions, the holder surrendered its rights to receive the number of shares with a value equal to the exercise price of $754 based on the average of $9.782 or the closing price for the five days, preceding the date of exercise or 77,071 shares. Upon exercise, the warrant holder was issued 27,929 shares of Company, which represents the difference between the 105,000 warrants exercised and the 77,071 shares withheld in lieu of a cash payment for the exercise price.

On June 18, 2007, the Company and Hayden Communications, Inc. (“Hayden”) entered into a contract under which Hayden will provide public and investor relation services to the Company for a period of one year. The contract provides for the issuance of 15,000 warrants to Hayden Communications, Inc. Each warrant allows Hayden to purchase one share of Company Common Stock for $7.08 per share. The warrants were exercisable beginning on June 15, 2008 and expired on June 15, 2011. The warrants issued to Hayden expired, unexercised, on June 15, 2011.

The Series A Warrants and the Series B Warrants (together the “Warrants”) were issued upon the closing of a private placement on November 15, 2006 and were exercisable after the sixth month anniversary of the issuance date of the Warrants until November 15, 2011. The Series A warrant holders can purchase 550,000 shares of the Company’s common stock. The Series A Warrants have an exercise price of $4.05 per share. The Series B warrant holders can purchase 550,000 shares of the Company’s common stock. The Series B Warrants have an exercise price of $4.25 per share. During the 2007, the warrant holders exercised 100,000 Series A warrants and 346,000 Series B warrants. During 2011, the warrant holders exercised 191,199 Series A warrants and 258,801 Series A warrants expired. During 2011, the warrant holders exercised 75,369 Series B warrants and 128,631 Series B warrants expired.

On November 15, 2006, the Company also issued warrants to purchase an aggregate of 192,500 shares of the Company’s common stock to a finder and to Roth Capital Partners, LLC for acting as placement agent in connection with the private placement that closed on November 15, 2006. These warrants were exercisable until November 15, 2011, and have an exercise price of $4.62 per share. These warrants expired, unexercised, on November 15, 2011.

As of December 31, 2012, there were no warrants outstanding as all warrants previously issued had either been exercised or have expired.

At December 31, 2012, 2011 and 2010 the Company had issued and outstanding warrants as follows:

Number of Warrants Shares				Exercise Price		Expiration Date	Reason for Issuance
December 31,
2012	2011	2010
—	—		450,000	$	4.05	November 15, 2011	Private placement
—	—		204,000	$	4.25	November 15, 2011	Private placement
—	—		192,500	$	4.62	November 15, 2011	Placement Agent Fee
—	—		15,000	$	7.08	June 15, 2011	Investor Relation Service
—	105,000		105,000	$	7.18	September 11, 2012	Placement Agent Fee

The following table contains information regarding warrants for the years ended December 31, 2012, 2011, and 2010 respectively:

	2012					2011					2010
	Warrants			Price per Share		Warrants			Price per Share		Warrants		Price per Share
Outstanding on January 1		105,000		$	7.18		966,500		$	4.05-7.18		966,500	$	4.05-7.18
Exercised		(105,000	)	$	7.18		(266,568	)	$	4.05 -4.25
Cancelled (expired)		—					(594,932	)	$	4.05-7.08
Outstanding on December 31		—					105,000		$	7.18		966,500	$	4.05-7.18
Weighted average exercise price		—				$	7.18				$	4.59
Weighted average remaining life of warrants at December 31		—					0.68 years					0.97 years

Cancelled (Expired) Warrants

On June 18, 2011, the Company cancelled 15,000 warrants issued to Hayden that expired on that date. On November 15, 2011, the Company cancelled 579,932 warrants that had expired on that date. In connection with the cancellation of warrants, approximately $1,098 which was previously included in shareholders’ equity under the caption entitled “warrants” was transferred to “paid in capital”. The amount transferred represents the value of the expiring warrant, as it was determined on the issue date of the warrants.

Stock Issuance

Load King acquisition shares

On January 6, 2010, the Company issued 130,890 shares of common stock to settle a promissory note issued on December 31, 2009 in connection with the Load King acquisition. The note was executed to ensure the delivery to the Seller of 130,890 shares of the Company’s Common Stock as provided for in the Purchase Agreement.

Stock issued to employees and Directors

The Company issued shares of common stock to employees and Directors at various times in 2012, 2011 and 2010 as restricted stock units issued under the Company’s 2004 Incentive Plan vested. Upon issuance entries were recorded to increase common stock and decrease paid in capital for the amounts shown below. The following is a summary of stock issuances that occurred during the three year period:

Date of Issue	Employees or Director	Shares Issued		Value of Shares Issued
March 21, 2012	Employees		12,051	$	94
March 21, 2012	Directors		6,600		52
December 31, 2012	Directors		11,700		80
			30,351	$	226

Date of Issue	Employees or Director	Shares Issued		Value of Shares Issued
January 1, 2011	Employees		10,000	$	38
March 15, 2011	Directors		6,617		37
March 31, 2011	Employees		1,360		6
December 31, 2011	Directors		4,950		28
			22,927	$	109

Date of Issue	Employees or Director	Shares Issued		Value of Shares Issued
January 5, 2010	Employees		1,500	$	3
January 6, 2010	Employees		4,000		9
January 18, 2010	Employees		1,000		2
January 28, 2010	Employees		10,500		21
February 1, 2010	Employees		5,500		12
March 31, 2010	Employees		1,320		6
October 1, 2010	Employees		16,831		106
December 31, 2010	Directors		6,800		6
			47,451	$	165

Warrant exercises

On May 18, 2012, the Company issued shares of common stock in connection with a cashless exercise of warrant as detailed below:

Issued Date	Shares Issued		Shares Repurchased		Share Net of Repurchases		Repurchase Price
May 18, 2012		105,000		77,071		27,929	$	9.782

In connection with the above cashless exercise $232, the value of warrants at the date of grant, was transferred from warrants to common stock. The shares 77,071 repurchased and cancelled were acquired $754 or $9.782 per share. The shares being repurchased were originally issued $9.39 per share or $724. The $30 difference was recorded as a direct charge to retained earnings.

On November 15, 2011, the Company issued 266,568 shares of common stock as warrant holders exercised 191,199 Series A warrants and 75,369 Series B warrants. The exercise of warrants resulted in an increase in common stock of $1,554 of which $1,095 represents cash received upon the exercise of the warrants and the balance of approximately $459 represents the value of exercised warrants determined upon issuance of the warrants on November 15, 2006. As a result of the exercise, the $459 which was previously included in shareholders’ equity under the caption warrants is transferred to common stock.

On October 3, 2012, the Company issued 29,112 shares to an executive officer. The executive officer was assigned the rights to receive the shares which had a value of $200 pursuant to a purchase agreement between SL and the Company. See Note 20 for additional details.

Stock offering

On July 17, 2012, the Company issued 500,000 shares of the Company’s common stock, no par value. The shares were issued to certain investors pursuant to subscription agreements between the Company and the investors that were entered into on July 12, 2012 (the “Agreements”). Under the Agreements, the investors paid $8.25 per share for a total purchase price of $4,125. The shares were issued pursuant to a prospectus supplement dated July 12, 2012 and a prospectus dated August 9, 2011, which is part of a registration statement on Form S-3 (Registration No. 333-176189) that was declared effective by the Securities and Exchange Commission on August 23, 2011.

Avondale Partners, LLC acted as the Company’s exclusive placement agent in this offering. In accordance with the terms of a Placement Agency Agreement dated July 12, 2012 between the Company and the placement agent, the Company paid the placement agent a cash fee that represents 5.25% of the gross proceeds of the offering and reimbursed the placement agent for reasonable out-of-pocket expenses. The Company received net cash proceeds of approximately $3,781 after payment of investment bank fees of $217 and legal and other expenses of $127. The net proceeds from the stock offering was used to repay debt.

Stock Repurchase

The Company purchased shares of Common Stock at various times from certain employees at the closing price on date of purchase. The stock was purchased from the employees to satisfy employees’ withholding tax obligations related to stock issuances described above. The following is a summary of common stock purchases that occurred during 2011 and 2010 (no stock purchase occurred in 2012):

Date of Purchase	Shares Purchased		Closing Price on Date of Purchase
January 1, 2011		3,065	$	3.85

Date of Purchase	Shares Purchased		Closing Price on Date of Purchase
January 5, 2010		490	$	2.19
January 6, 2010		1,309	$	2.19
January 18, 2010		327	$	2.30
January 28, 2010		3,429	$	2.30
February 1, 2010		1,798	$	2.25
October 1, 2010		1,477	$	2.48
		8,830

On May 18, 2012, the holder of the outstanding warrants elected to exercise its rights to purchase 105,000 warrant shares under the cashless exercise provisions of the warrant. In connection with cashless exercise, the Company repurchased 77,071 shares that had of value equal the exercise price of warrants being exercised or $754.

2004 Equity Incentive Plan

In 2004, the Company adopted the 2004 Equity Incentive Plan and subsequently amended and restated the plan on May 28, 2009. The maximum number of shares of common stock reserved for issuance under the plan is 500,000 shares. The total number of shares reserved for issuance may, however, may be adjusted to reflect certain corporate transactions or changes in our capital structure. Employees and members of the board of directors who are not our employees or employees of an affiliate are eligible to participate in the plan. The plan is administered by a committee of the board comprised of members who are outside directors. The plan provides that the committee has the authority to, among other things, select plan participants, determine the type and amount of awards, determine award terms, fix all other conditions of any awards, interpret the plan and any plan awards. Under the plan, the committee can grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units, except Directors may not be granted stock appreciation rights, performance shares and performance units. During any calendar year, participants are limited in the number of grants they may receive under the plan. In any year, an individual may not receive options for more than 15,000 shares, stock appreciation rights with respect to more than 20,000 shares, more than 20,000 shares of restricted stock and/or an award for more than 20,000 performance shares or restricted stock units or performance units. The plan requires that the exercise price for stock options and stock appreciation rights be not less than fair market value of our common stock on date of grant.

On April 15, 2008, the Company awarded under the Amended and Restated 2004 Equity Incentive Plan 4,000 restricted stock units to an employee. The employee restricted stock units will vest 33%, 33% and 34% on March 31, 2009, March 31, 2010, and March 31, 2011 respectively. The restricted stock units awarded were valued at $18 or $4.55 per share, which was the closing price of the Company’s common stock on the date of grant.

On December 18, 2008, the Company awarded under the Amended and Restated 2004 Equity Incentive Plan 103,375 and 21,155 restricted stock units to employees and to the independent Directors, respectively. The restricted stock units are subject to the same conditions as the restricted stock awards except the restricted stock units will not have voting rights and the common stock will not be issued until the vesting criteria are satisfied. The employee restricted stock units vested on January 2, 2009, following the Company’s final determination that each of the employees had met certain performance objectives. The units granted to Directors will vest 36.7%, 31.2% and 32.1% on December 31, 2008, December 31, 2009 and December 31, 2010 respectively. The restricted stock units awarded were valued at $112 or $0.90 per share, which was the closing price of the Company’s common stock on the date of grant. The value of the restricted stock units is being charged to compensation expense over the vesting period. The Company awarded under the Amended and Restated 2004 Equity Incentive Plan a total of 135,001; 26,667; and 22,500 restricted stock units to employees and directors during 2012, 2011 and 2010, respectively. The restricted stock units are subject to the same conditions as the restricted stock awards except the restricted stock units will not have voting rights and the common stock will not be issued until the vesting criteria are satisfied.

Compensation expense in 2012, 2011 and 2010 includes $132, $103 and $78 related to restricted stock units, respectively. Compensation expense related to restricted stock units will be $298, $245 and $245 for 2013, 2014 and 2015, respectively.

The following is a summary of restricted stock units that were awarded during 2012, 2011 and 2010:

2012 Grants	Vesting Date	Number of Restricted Stock Units		Closing Price on Date of Grant		Value of Restricted Stock Units Issued
March 21, 2012	March 21, 2012 18,651units; December 31, 2012 6,600 units; December 31, 2013 6,800 units		32,051	$	7.83	$	251
December 31, 2012	34,317 units December 31, 2013; 34,317 units December 31, 2014 and 34,316 units December 31, 2015		102,950	$	7.14		735
			135,001			$	986
2011 Grants	Vesting Date	Number of Restricted Stock Units		Closing Price on Date of Grant		Value of Restricted Stock Units Issued
January 1, 2011	January 1, 2011		10,000	$	3.85	$	38
March 15, 2011	6,667 units March 15, 2011; 4,950 units December 31, 2011 and 5,000 units December 31, 2012		16,667	$	5.56		93
			26,667			$	131
2010 Grants	Vesting Date	Number of Restricted Stock Units		Closing Price on Date of Grant		Value of Restricted Stock Units Issued
January 1, 2010	January 28, 2010		10,000	$	1.92	$	19
January 5, 2010	January 5, 2010		1,500	$	2.19		3
January 6, 2010	January 6, 2010		4,000	$	2.19		9
January 18, 2010	January 18, 2010		1,000	$	2.30		2
January 28, 2010	January 28, 2010		500	$	2.30		1
February 1, 2010	February 1, 2010		5,500	$	2.25		12
			22,500			$	46

The following table contains information regarding restricted stock units for the years ended December 31, 2012, December 31, 2011 and, December 31, 2010, respectively:

	Restricted Stock Units
	2012			2011			2010
Outstanding on January 1,		5,100			1,360			26,379
Issued		135,001			26,667			22,500
Vested and issued		(30,351	)		(19,862	)		(38,621	)
Vested—issued and repurchased for income tax withholding		—			(3,065	)		(8,830	)
Forfeited		—			—			(68	)
Outstanding on December 31		109,750			5,100			1,360