Stock-Based Awards and Per Share Information
|9 Months Ended|
Sep. 30, 2014
|Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]|
|Stock-Based Awards and Per Share Information||
NOTE 3—STOCK-BASED AWARDS AND PER SHARE INFORMATION
The Company currently has one stock-based compensation plan, the 2002 Stock Incentive Plan (as amended effective as of May 26, 2004, November 15, 2005, May 16, 2007, May 5, 2011, June 6, 2013, and October 30, 2014) (the “2002 Plan”), which will expire on May 5, 2019. Eligible persons under the 2002 Plan include certain officers and employees of the Company, and directors of the Company, as well as consultants. Under the 2002 Plan, 9,250,000 shares of common stock have been authorized for issuance. As of September 30, 2014, 2,993,000 shares of common stock have been issued pursuant to options that were exercised, 3,815,000 shares of common stock have been reserved for options that are outstanding, and 2,442,000 shares of common stock remain available for future grant.
Stock-Based compensation cost recognized in operating results totaled approximately $301,000 and $491,000 for the three months ended September 30, 2014 and 2013, respectively; and $887,000 and $1.2 million for the nine months ended September 30, 2014 and 2013, respectively. The net impact to earnings for the three months ended September 30, 2014 and 2013 was $(0.01) and $(0.02) per basic and diluted share, respectively, and $(0.02) and $(0.04) per basic and diluted share for the nine months ended September 30, 2014 and 2013, respectively. At September 30, 2014, the Company had approximately $2.0 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation arrangements. The Company expects that cost to be recognized over a weighted-average period of 1.1 years.
The following table summarizes the income statement classification of compensation expense associated with share-based payments (in thousands):
The stock option fair values, under the Company’s stock option plan, were estimated using the Black-Scholes option-pricing model with the following assumptions:
A summary of option activity under the Company’s stock option plan for the nine months ended September 30, 2014 is as follows:
(1) The intrinsic value calculation does not include negative values. This can occur when the fair market value on the reporting date is less than the exercise price of the grant.
Cash proceeds along with fair value disclosures related to grants, exercises, and vesting options are provided in the following table (in thousands, except per share amounts):
(1) Excess tax benefits received related to stock option exercises are presented as financing cash inflows. The Company currently does not receive a tax benefit related to the exercise of stock options due to the Company’s net operating losses.
(2) The intrinsic value of stock options exercised is the amount by which the market price of the stock on the date of exercise exceeded the market price of the stock on the date of grant.
The Company issues warrants to acquire shares of its common stock underlying such warrants as approved by its Board of Directors (the “Board”).
A summary of warrant activity for the nine months ended September 30, 2014 is as follows:
During the nine months ended September 30, 2014 and 2013, Comerica Bank exercised warrants issued in connection with the lines of credit on a cashless basis pursuant to the Notice of Exercise resulting in a net issuance of 38,708 shares and 40,465 shares, respectively, of common stock.
Net Loss Per Share – Basic and Diluted
Basic net loss per share is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding for the period. In computing diluted net loss per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities.
Outstanding stock options and warrants to purchase 4,703,000 shares were not included in the computation of diluted loss per share for the three and nine months ended September 30, 2014 as a result of their anti-dilutive effect. For the same 2013 periods, anti-dilutive outstanding stock options and warrants to purchase 6,022,000 shares were not included in the computation of diluted loss per share.
Other Stock-Based Awards
On July 13, 2014, the Compensation Committee of the Board of Directors (the “Board”) of the Company approved the Chief Executive Officer’s stock-based compensation consisting of non-qualified stock options to purchase 172,282 shares of the Company’s common stock at an exercise price of $1.98 per share and 37,879 restricted stock units ("RSUs") valued at $1.98 per share. One-sixth of the stock options and one-sixth of the RSUs vested immediately, with the remaining five-sixths vesting ratably on a monthly basis over the twelve-month period ending on July 13, 2015. The fair value of the stock options of $1.31 per share was estimated using the Black-Scholes option-pricing model with assumptions of 3.6 years for expected term, 98.37% volatility and 1.65% risk-free interest rate.
On August 27, 2014, each of the independent directors was granted 9,217 RSUs, totaling 36,868 RSUs valued at $2.17 per share, which vest over a 12-month period.
Retirement of Treasury Stock
On July 18, 2014, the Company retired all 1,963,500 shares of stock held in treasury at that date. The Company recorded the cost of the treasury stock retired as a $2,000 reduction to common stock and a $16,397,000 reduction in additional paid in capital.
In February 2014, the Board declared a one-half percent stock dividend payable March 28, 2014, to stockholders of record on March 14, 2014. There is no assurance, with respect to the amount or frequency, that any stock dividend will be declared in the future.
Disclosure of compensation related costs share based payments and per share Information.
No definition available.