Stock-based Compensation

3 Months Ended

Mar. 31, 2012

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

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

Note 4 – Stock-based Compensation

At March 31, 2012 the Company had seven stock-based compensation plans. Six of these 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. A new plan, the Heritage Global Partners Plan (the “HGP Plan”) was set up to facilitate the issue of options as part of the acquisition of Heritage Global Partners. It is similar to the Company’s 2003 Stock Option and Appreciation Rights Plan, except that options issued under the HGP Plan survive termination of employment.

The Company’s total compensation cost related to stock options is $115 and $18 for the three months ended March 31, 2012 and 2011, respectively. The fair value compensation costs of unvested stock options in the first three months of 2012 and 2011 were determined using the Black-Scholes Option Pricing Model for grant dates between 2007 and 2012. Historical inputs to the model included expected volatility between 133% and 323%, risk-free interest rates between 0.94% and 1.93%, 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 first three months of 2012, the Company recognized a tax benefit of $16, related to the exercise of options to purchase common stock. No tax benefit from stock-based compensation was recognized in the first three months of 2011, as no options were exercised. The Company’s stock-based compensation provided $8 in financing cash flows during the first three months of 2012, due to the exercise of 21,750 options, and had no effect on its cash flows during the first three months of 2011.

On February 29, 2012, 625,000 options, having an exercise price of $2.00 and a fair value of $1.8092, were granted to the former owners of Heritage Global Partners, as part of the Company’s acquisition of Heritage Global Partners. The inputs to the Black-Scholes Option Pricing Model were an expected volatility of 133%, a risk-free interest rate of 1.25%, an expected term of 4.75 years, and an expected dividend yield of zero. No similar grants were made during the first three months of 2011.

On March 28, 2012, 265,000 options, having an exercise price of $2.00 and a fair value of $1.7251, were granted to employees. These options are part of the 2003 Stock Option and Appreciation Rights Plan. The inputs to the Black-Scholes Option Pricing Model were an expected volatility of 135%, a risk-free interest rate of 1.32%, an expected term of 4.75 years, and an expected dividend yield of zero. During the first three months of 2011, similar grants of 1,540,000 options were made to employees, officers and directors of the Company, and to a consultant.

The following summarizes the changes in common stock options for the three months ended March 31, 2012 and 2011, respectively:

	Options			Weighted Average Exercise Price
Outstanding at December 31, 2011		3,141,198		$	1.65
Granted		890,000		$	2.00
Exercised		(21,750	)	$	0.63
Forfeited		(250,000	)	$	1.83
Expired		(1,250	)	$	1.40
Outstanding at March 31, 2012		3,758,198		$	1.72
Options exercisable at March 31, 2012		1,120,698		$	1.28

	Options			Weighted Average Exercise Price
Outstanding at December 31, 2010		728,246		$	0.89
Granted		1,540,000		$	1.81
Expired		(6,215	)	$	8.29
Outstanding at March 31, 2011		2,262,031		$	1.49
Options exercisable at March 31, 2011		654,531		$	0.88