Stock-based Compensation

9 Months Ended

Sep. 30, 2011

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

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

Note 5 – Stock-based Compensation

At September 30, 2011 the Company had six stock-based compensation plans, which are described more fully in Note 14 to the audited consolidated financial statements contained in the Company’s most recently filed Annual Report on Form 10-K.

The Company’s total compensation cost related to stock options is $110 and $176 for the three and nine months ended September 30, 2011, respectively, as compared to $8 and $43 for the three and nine months ended September 30, 2010.  The increase in 2011 is due to options granted to employees and officers of both the Company and its parent, Counsel Corporation (together with its subsidiaries, “Counsel”), as detailed below.  The fair value compensation costs of unvested stock options in the first nine months of 2011 and 2010 were determined using the Black-Scholes Option Pricing Model for grant dates between 2006 and 2011.  Historical inputs to the model included expected volatility between 79% and 323%, risk-free interest rates between 1.49% and 5.07%, expected lives of 4.75 or 6.25 years, and an expected dividend yield of zero.  The Company’s estimated forfeiture rate of its stock options is nil.

During the quarter ended September 30, 2011, 30,000 options that had been issued to directors of the Company in 2004 were exercised in exchange for total cash payments of $17.  The Company recognized a tax benefit of $44 associated with these exercises.  No options were exercised during the three and nine months ending September 30, 2010 and therefore no tax benefit from stock-based compensation was recognized.  The Company’s stock-based compensation had no effect on its cash flows during the three and nine months ended September 30, 2010.

During the first quarter of 2011, as detailed in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, as filed with the SEC, the Company issued a total of 1,540,000 options to officers, employees and directors.  During the second quarter of 2011, as detailed in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, as filed with the SEC, the Company issued a total of 880,000 options to the previous owners of Equity Partners, the President of the Company, and officers of Counsel.

On September 21, 2011, 100,000 options, having an exercise price of $2.40 and a fair value of $2.399, were granted to an employee of the Company.  These options are part of the 2003 Stock Options and Appreciation Rights Plan.  The inputs to the Black-Scholes Option Pricing Model were an expected volatility of 320%, a risk-free interest rate of 1.49%, an expected term of 4.75 years, and an expected dividend yield of zero.

With the exception of the 40,000 options granted to the Company’s directors in the first quarter of 2011, no similar grants were made during the first nine months of 2010.

The following summarizes the changes in common stock options for the nine months ended September 30, 2011 and 2010, respectively:

	Options			Weighted Average Exercise Price
Outstanding at December 31, 2010		728,246		$	0.89
Granted		2,520,000		$	1.88
Exercised		(30,000	)	$	0.83
Expired		(37,048	)	$	3.87
Outstanding at September 30, 2011		3,181,198		$	1.64
Options exercisable at September 30, 2011		831,198		$	1.07

	Options			Weighted Average Exercise Price
Outstanding at December 31, 2009		994,027		$	6.02
Granted		40,000		$	0.08
Expired		(305,781	)	$	17.47
Outstanding at September 30, 2010		728,246		$	0.89
Options exercisable at September 30, 2010		630,746		$	0.98