Convertible Preferred Stock Warrants

9 Months Ended

Sep. 30, 2012

Convertible Preferred Stock [Abstract]

Convertible Preferred Stock: warrants [Text Block]

Convertible Preferred Stock:  Warrants

In July 2004, the Company completed a private placement of Series A-1 Convertible Preferred Stock ("Series A-1 Preferred") to four unaffiliated institutional investors.  The investors were also issued unit warrants to purchase Series A-2 Convertible Preferred Stock ("Series A-2 Preferred").  In 2005, three of the four investors exercised their right to purchase the Series A-2 Preferred.  We also issued to the investors warrants to purchase shares of our Class A common stock at various exercise prices that range from $6.72 to $7.93, with most of them striking at $6.95.  The conversion, exercise and redemption prices, along with the number of shares and warrants, were adjusted for stock dividends paid on December 31, 2004 and 2005.

On July 13, 2009, the Company converted all of its outstanding Series A-1 Preferred and Series A-2 Preferred into Class A common shares in accordance with the mandatory redemption provision of the preferred shareholder agreement dated July 12, 2004.  The total amount of Class A common shares issued as part of the conversion was 1,706,682, inclusive of pro rata dividends due through the conversion date.

As of September 30, 2012, there were outstanding warrants to purchase the Company's stock at $7.86, which were issued to investors of the Series A-2 Preferred. These warrants were converted into 12,487 Class A shares through a cashless exercise provision on their October 6, 2012 expiration date.

As of 9/30/2012
Warrants Outstanding	Expiration  Date	Exercise Price		Fair Value
				(In thousands)
52,121	10/6/2012	$	7.86	$	137

The fair value of the warrants is calculated using the Black-Scholes option pricing model and is classified as a liability on the balance sheet in the amount of approximately $137 thousand and $451 thousand at September 30, 2012 and December 31, 2011, respectively.  The change in fair value of warrants is reported as a component of revenue in the statement of comprehensive income.