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13. Shareholders’ Equity
Common Stock: In April 2010, we completed a private placement of 915 shares of our Common Stock at $2.00 per share, resulting in net proceeds of $1,721. The net proceeds were used to capitalize and support AAP, which was formed to establish and operate our regional processing center in Philadelphia. During the fourth quarter of 2011, 34 stock options were exercised that resulted in cash proceeds of $117. The intrinsic value of options exercised during the fourth quarter of 2011 was $96.
Stock options: On May 12, 2011, our shareholders approved and adopted the 2011 Stock Compensation Plan (the “2011 Plan”). The 2011 Plan authorizes the granting of awards in any of the following forms: (i) stock options, (ii) stock appreciation rights, and (iii) other share-based awards, including but not limited to restricted stock, restricted stock units or performance shares, and expires on the earlier of May 12, 2021 or the date that all shares reserved under the 2011 Plan are issued or no longer available. The 2011 Plan provides for the issuance of up to 700 shares of Common Stock pursuant to awards granted under the 2011 Plan. Options granted to employees typically vest over two years while grants to non-employee directors vest in six months. As of December 31, 2011, 15 options were outstanding under the 2011 Plan. On August 2, 2011, we granted 15 stock options to non-employee directors with an exercise price of $4.36 per share, a vesting period of six months and a weighted average fair value of $3.87 per share. Our 2006 Stock Option Plan (the “2006 Plan”) expired on June 30, 2011, but the options outstanding under the 2006 Plan continue to be exercisable in accordance with their terms. As of December 31, 2011, 549 options were outstanding to employees and non-employee directors under the 2006 Plan. On February 24, 2011, we granted 28 stock options from our 2006 Plan to employees with an exercise price of $4.25 per share, a vesting period of one year and a weighted average fair value of $3.50 per share. On May 12, 2011, we granted 30 stock options from our 2006 Plan to non-employee directors with an exercise price of $4.69 per share, a vesting period of six months and a weighted average fair value of $4.20 per share. Our Restated 1997 Stock Option Plan (the “1997 Plan”) has expired, but the options outstanding under the expired 1997 Plan continue to be exercisable in accordance with their terms. As of December 31, 2011, options to purchase an aggregate of 26 shares were outstanding under the 1997 Plan. We issue new Common Stock when stock options are exercised.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions for fiscal years 2011 and 2010:
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|
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For the fiscal year ended
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|
|
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|
December 31,
2011
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January 1,
2011
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|
|
Expected dividend yield
|
|
—
|
|
—
|
|
|
Expected stock price volatility
|
|
97.46
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%
|
107.44
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%
|
|
Risk-free interest rate
|
|
2.93
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%
|
2.79
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%
|
|
Expected life of options (years)
|
|
8.85
|
|
7.47
|
|
Additional information relating to all outstanding options is as follows (in thousands, except per share data):
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|
|
|
|
Weighted
|
|
|
|
|
|
|
Average
|
|
|
|
|
Options
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|
Exercise
|
|
|
|
|
Outstanding
|
|
Price
|
|
|
Balance at January 2, 2010
|
|
413
|
|
$
|
4.10
|
|
|
Granted
|
|
143
|
|
3.24
|
|
|
Exercised
|
|
—
|
|
—
|
|
|
Cancelled/expired
|
|
(3
|
)
|
5.27
|
|
|
Forfeited
|
|
(1
|
)
|
2.22
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|
|
Balance at January 1, 2011
|
|
552
|
|
3.87
|
|
|
Granted
|
|
73
|
|
4.45
|
|
|
Exercised
|
|
(34
|
)
|
3.38
|
|
|
Cancelled/expired
|
|
(1
|
)
|
2.22
|
|
|
Balance at December 31, 2011
|
|
590
|
|
3.97
|
|
|
|
|
|
|
|
|
The weighted average fair value per option of options granted during fiscal years 2011 and 2010 was $3.86 and $2.82, respectively.
The following table summarizes information about stock options outstanding as of December 31, 2011 (in thousands, except per share data):
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|
|
|
|
Weighted Average
|
|
|
|
|
|
|
|
|
|
|
Remaining
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|
|
|
|
|
|
|
|
Options
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|
Contractual Life
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|
Weighted Average
|
|
Aggregate
|
|
|
Range of Exercise Prices
|
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Outstanding
|
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In Years
|
|
Exercise Price
|
|
Intrinsic Value
|
|
|
$5.05 to $6.41
|
|
216
|
|
3.47
|
|
$
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5.48
|
|
|
|
|
$3.55 to $4.69
|
|
183
|
|
6.61
|
|
3.97
|
|
|
|
|
$2.22 to $2.80
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|
154
|
|
4.01
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|
2.38
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|
|
|
|
$1.87
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|
37
|
|
6.77
|
|
1.87
|
|
|
|
|
|
|
590
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|
4.80
|
|
3.97
|
|
$
|
709
|
|
|
|
|
|
|
|
|
|
|
|
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|
The following table summarizes information about stock options exercisable as of December 31, 2011 (in thousands, except per share data):
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|
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Options
|
|
Weighted Average
|
|
Aggregate
|
|
|
Range of Exercise Prices
|
|
Exercisable
|
|
Exercise Price
|
|
Intrinsic Value
|
|
|
$5.05 to $6.41
|
|
216
|
|
$
|
5.48
|
|
|
|
|
$3.55 to $4.69
|
|
140
|
|
3.88
|
|
|
|
|
$2.22 to $2.80
|
|
154
|
|
2.38
|
|
|
|
|
$1.87
|
|
37
|
|
1.87
|
|
|
|
|
|
|
547
|
|
3.95
|
|
$
|
678
|
|
|
|
|
|
|
|
|
|
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The aggregate intrinsic value in the preceding tables represents the total pre-tax intrinsic value, based on our closing stock price of $5.00 on December 30, 2011, which theoretically could have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options exercisable as of December 31, 2011 was 331.
Warrant: On October 21, 2009, we issued a warrant to GE to purchase 248 shares of Common Stock at a price of $0.75 per share. The fair market value of the warrant issued was $479 and is exercisable in full at any time during a term of ten years. The fair value per share of Common Stock underlying the warrant issued to GE was $1.93 based on our closing stock price of $1.97. The exercise price may be reduced and the number of shares of Common Stock that may be purchased under the warrant may be increased if the Company issues or sells additional shares of Common Stock at a price lower than the then-current warrant exercise price or the then-current market price of the Common Stock. The shares underlying the warrant include legal restrictions regarding the transfer or sale of the shares. As a result of our private placement offering in April 2010, the number of shares of Common Stock underlying the warrant increased to 254 shares and the exercise price decreased to $0.73 per share as defined in the agreement. There was no accounting charge as a result of the change in warrant shares or exercise price due to the treatment of the warrant as permanent equity. On May 13, 2010, we issued warrants to non-employees to purchase 24 shares of Common Stock at a price of $3.55 per share, with a vesting period of two years and a fair value of $3.03 per share.
The following table summarizes the assumptions used to estimate the fair value of the warrants issued on October 21, 2009 and May 13, 2010 using the Black-Scholes Model:
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|
|
May 13,
2010
|
|
October 21,
2009
|
|
|
Expected dividend yield
|
|
—
|
|
—
|
|
|
Expected stock price volatility
|
|
105.47
|
%
|
128.27
|
%
|
|
Risk-free interest rate
|
|
2.98
|
%
|
3.42
|
%
|
|
Expected life of warrants (years)
|
|
7.00
|
|
10.00
|
|
Preferred Stock: Our amended Articles of Incorporation authorize two million shares of Preferred Stock that may be issued from time to time in one or more series having such rights, powers, preferences and designations as the Board of Directors may determine. To date no such preferred shares have been issued.
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