1700000
P4Y
7.04
33505521
128400000
400000
74500000
11990000
5.67
8658000
2746000
2.16
27489000
2567000
71933000
62186000
1897000
6.42
11952000
2718000
0.30
2.79
P6Y8M1D
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47046000
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6945000
27975000
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41822000
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41248000
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14816000
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2322000
33629000
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4205000
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32051000
2.83
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27975000
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76262000
1348000
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12428000
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51211000
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6.84
6238000
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41005000
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15758000
5414000
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246000
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33319000
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107663000
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32152000
33500000
751000
6545000
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40655000
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71501000
32558000
20089000
366000
5929000
21045000
1693000
33491000
109022000
0
3611000
4262000
30166000
2
3.21
4.18
P10Y
33500000
-46626000
4262000
109022000
6000000
11000000
1785000
15043000
42700000
12400000
2670000
12759000
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232000
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P7Y4D
164206000
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4381000
17354000
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3.14
1.14
7.25
P9Y2M16D
P3Y11M16D
P9Y9M18D
700000
P9Y5M9D
300000
2.02
100000
P7Y
P5Y9M
P7Y
0.0155
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0.0316
0.688
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292000
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1463000
583000
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P6Y1M2D
47000
1008000
1000
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4.42
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9.46
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6174000
424000
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3040000
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P7Y7M2D
200596000
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600000
27829000
53000
72000
2582000
-14831000
-823000
2100000
1840000
53000
20000
-4246000
2.77
20000
22290000
25000
5.99
0.46
7.76
P10Y2M9D
P2Y8M5D
P8Y1M21D
P7Y2M9D
400000
2.88
0
P5Y6M
P6Y6M
0.0113
0.626
0.0194
0.639
20000
194000
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1008000
424000
404000
4429000
2582000
VITC
Vitacost.com, Inc.
Yes
false
Accelerated Filer
FY
No
2012
10-K
2012-12-31
0001401688
No
--12-31
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Reconciliation of the federal statutory income tax rate to the
Company’s effective tax rate is as follows: </p>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<table style="WIDTH: 95%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.25in" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year Ended December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in; WIDTH: 46%">
Taxes computed at federal tax rate</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">(6,500</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">)</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">(5,025</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">)</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">(4,682</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">State
income taxes, net of federal income tax benefit, excluding change
in valuation allowance</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(281</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(277</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(236</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">Non-taxable
income</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">-</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(6</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(27</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">Meals
and entertainment</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">7</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">6</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">6</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">
Incentive stock options</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">268</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(34</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">83</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">Other
tax assets</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">916</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">556</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(75</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">Change
in valuation allowance – state</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">437</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">404</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">944</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">
Change in valuation allowance - federal</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
5,206</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
4,429</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
5,408</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">
Income tax expense</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
53</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
53</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
1,421</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Reclassifications</u></i>:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">A
reclassification on the 2011 consolidated balance sheets has been
made to conform to the 2012 presentation. Reclassifications on the
2011 and 2010 consolidated statements of cash flows has been made
to conform to the 2012 presentation.</p>
</div>
-281000
2573000
-19272000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u><i>Revenue Recognition and Freight</i>: </u></i></p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Revenue
from the sale of vitamins, nutritional supplements and other health
and wellness products is recognized when all the following criteria
are met: a customer executes an order, the sales price and the
shipping and handling fee have been determined, credit card
authorization has occurred, collection is reasonably assured and
the product has been received by the customer. The Company
establishes a deferred revenue liability which represents orders
that have been shipped but not yet received by the customer at the
end of a given period. The Company’s sales terms grant
customers certain limited rights of return for a 30-day period. It
has been the Company’s experience that such returns have been
insignificant. The Company recorded a reserve for returns of $0.2
million at December 31, 2012 and 2011.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Freight
billed to customers is classified as revenue and totaled
approximately $12.5 million, $9.0 million and $14.5 million for the
years ended December 31, 2012, 2011, and 2010, respectively.
Freight costs are expensed as incurred and recorded as a component
of cost of goods sold. Freight expense totaled approximately $31.7
million, $26.0 million, and $23.0 million for the years ended
December 31, 2012, 2011, and 2010, respectively.</p>
</div>
-1554000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u><i>Inventory</i>:</u></i></p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Inventory, consisting principally of health and wellness products,
is primarily stated at the lower of cost or market using the first
in, first out (“FIFO”) method. </p>
</div>
4262000
P6Y9M22D
154000
1999000
-19171000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Accounts Receivable</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Accounts receivable consist primarily of amounts in transit from
banks for customer credit card, debit card and electronic benefit
transfer transactions that are generally processed by the banks
within seven days of authorization. Based on the Company’s
historical collection experience and a review of the status of
accounts receivable, an allowance for doubtful accounts of $0.2
million was recorded as of December 31, 2012 and 2011.</p>
</div>
200000
277000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Property and Equipment</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Property and equipment is stated at cost less accumulated
depreciation. Leasehold improvements are amortized using the
straight-line method over the shorter of the estimated useful life
of the assets or the lease term. Depreciation is computed using the
straight-line method over the following estimated useful
lives: </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"></p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: top">
<td style="PADDING-BOTTOM: 1pt; WIDTH: 80%"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; WIDTH: 19%; FONT-WEIGHT: bold">
<font style="FONT: 10pt Times New Roman, Times, Serif"><b>Years</b></font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Furniture, fixtures and
equipment</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 10</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Computers</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 5</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Software</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 5</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Leasehold and building
improvements</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 39</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Buildings</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">39</font></td>
</tr>
</table>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Upon
retirement or sale, the cost and accumulated depreciation are
eliminated from the accounts and the gain or loss, if any, is
included in the consolidated statements of operations.</p>
</div>
0.00
12500000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Cash and Cash Equivalents</u></i>: </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company considers all highly-liquid investments purchased with
original maturities of three months or less at the date of purchase
to be cash equivalents. The Company maintains its cash and cash
equivalents in various bank deposit accounts which, at times, may
exceed the federally-insured limits. The Company has not
experienced any losses in such accounts. The Company believes it is
not exposed to any significant credit risk on such accounts.</p>
</div>
-6500000
1999000
6.73
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>7.
Leases</b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Certain
office space is leased under noncancelable operating leases
expiring in various years through 2019. Future minimum lease
payments, by year, and in the aggregate, under operating leases are
due as follows as of December 31, 2012: </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 50%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
Operating</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-WEIGHT: bold">
Year Ending December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">Leases</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left"> </td>
<td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 75%">2013</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 22%; COLOR: black">1,700</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">2014</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">1,660</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">2015</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">588</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">2016</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">606</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">2017</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">624</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Thereafter</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
751</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">Total minimum
lease payments</td>
<td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black">
5,929</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black">
 </td>
</tr>
</table>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
total rental expense included in the statements of comprehensive
loss for the years ended December 31, 2012, 2011, and 2010 was $2.0
million, $2.1 million, and $2.1 million, respectively</p>
</div>
7000
6.61
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="BACKGROUND-COLOR: white; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><i>Recent Accounting Guidance</i></b>  <i> </i></p>
<p style="BACKGROUND-COLOR: white; TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Recently Adopted Accounting Guidance</u>:</i></p>
<p style="BACKGROUND-COLOR: white; TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">On
January 1, 2012, the Company adopted provisions of the
authoritative guidance related to changes to fair value measurement
and disclosure. Specifically, the guidance includes clarification
about when the concept of highest and best use is applicable to
fair value measurements, requires quantitative disclosures about
inputs used and qualitative disclosures about the sensitivity of
recurring Level 3 measurements, and requires the classification of
all assets and liabilities measured at fair value in the fair value
hierarchy, including those assets and liabilities which are not
recorded at fair value but for which fair value is disclosed. The
adoption of this guidance did not have a material impact on the
Company’s consolidated financial statements.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="BACKGROUND-COLOR: white; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
On January 1, 2012, the Company adopted provisions of the
authoritative guidance related to the changes to the presentation
of comprehensive income. Specifically, the guidance gives an entity
the option to present the total of comprehensive income, the
components of net income, and the components of other comprehensive
income either in a single continuous statement of comprehensive
income or in two separate but consecutive statements. The Company
elected to present components of net income and other comprehensive
income in a single continuous statement. The components of other
comprehensive income are presented net of the related tax effects.
Other than the changes in presentation, the adoption of this
guidance did not have a material impact on the Company’s
consolidated financial statements.</p>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The tax
effects of temporary differences that give rise to significant
components of deferred tax assets at December 31, 2012 and 2011 are
presented below:</p>
<p style="TEXT-ALIGN: center; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Deferred tax assets:</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 64%">Net operating loss and
credits carryforward</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">15,758</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">8,930</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Inventory</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">366</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">375</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Accrued compensation</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">29</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">393</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Stock-based compensation</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">3,258</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">4,153</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Accrued expenses</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">-</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">174</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Deferred revenue
and reserves</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
678</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
791</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">20,089</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">14,816</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Deferred tax liability:</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Depreciation and amortization</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(3,611</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(4,205</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">-</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">-</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Valuation allowance - state</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(1,785</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(1,348</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Valuation
allowance - federal</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
(15,043</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
)</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
(9,837</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 9pt">
Deferred tax liability, net</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
(350</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">)</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
(574</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">)</td>
</tr>
</table>
</div>
74000
-0.59
605000
0.05
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Concentration of Credit Risk</u>:</i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company’s cash and cash equivalents were held by one major
financial institution and for certain accounts exceed federally
insured limits. These cash and cash equivalent balances could be
impacted if this financial institution fails or is subjected to
other adverse conditions in the financial markets.  To
date, the Company has experienced no loss or lack of access to its
cash and cash equivalents.</p>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>9.
Related Party Transactions</b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">In
October 2010, the Company entered into a stockholder agreement with
Great Hill Investors, LLC, Great Hill Equity Partners III, L.P.,
and Great Hill Equity Partners IV, L.P. (collectively,
“GHP”), whereby GHP agreed to various restrictions with
respect to the voting, transfer and sale of shares of the
Company’s common stock which it currently owns and with
respect to any shares it may own in the future in excess of 30% of
the Company’s outstanding common stock. In addition, the
Company and Great Hill entered into a registration rights
agreement, which provides Great Hill with certain demand,
incidental and shelf registration rights subject to various
exceptions and qualifications. Lastly, the Company agreed to
reimburse Great Hill $0.7 million for its reasonable and documented
out-of-pocket expenses incurred in connection with a consent
solicitation that occurred in 2010. The Company reimbursed $0.4
million and $0.3 million to Great Hill in 2011 and 2010,
respectively.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company paid Board members a total of $0.1 million in consulting
fees during the year ended December 31, 2010. Such amounts have
been included in general and administrative expenses in the
statements of comprehensive loss. No consulting fee payments were
made to Board members in 2012 and 2011.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">As
discussed in Note 2, on February 16, 2012, the Company entered into
the Purchase Agreement with the Investors for the purchase of
shares of common stock and warrants to purchase shares of common
stock of the Company for an aggregate purchase price of $34.8
million. Concurrently with entering into the Purchase Agreement,
the Company entered into a registration rights agreement with
Jeffrey Horowitz and JHH which provides Jeffrey Horowitz and JHH
with demand, shelf and piggyback registration rights subject to
various exceptions and qualifications. The registration rights
agreement further provides that if the Company enters into a
registration rights agreement (or similar agreement) with any
person or entity on more favorable terms than those contained in
the registration rights agreement, the registration rights
agreement will be amended to include such more favorable terms.
Pursuant to the registration rights agreement, the Company has
agreed to pay all of the registration costs and expenses incurred
in connection with such demand, shelf and piggyback
registrations.</p>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
provision for income taxes charged to operations for the years
ended December 31, 2012, 2011 and 2010, consists of the
following:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<table style="WIDTH: 95%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.25in" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year Ended December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 46%">Current tax expense
(benefit)</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">277</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">-</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">(1,630</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Deferred tax
(benefit) expense</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
(224</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
)</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
53</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
3,051</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">Income tax
expense</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
53</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
53</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
1,421</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
</div>
6474000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Contingencies</u></i>:  </p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">On an
ongoing basis, the Company assesses potential liabilities related
to lawsuits or claims brought against it. While it is typically
very difficult to determine the timing and ultimate outcome of such
actions, the Company’s management uses their best judgment to
determine if it is probable that it will incur an expense related
to the settlement or final adjudication of such matters and whether
a reasonable estimation of such probable loss, if any, can be made.
In assessing probable losses, the Company takes into consideration
estimates of the amount of insurance recoveries, if any. The
Company accrues a liability when it believes a loss is probable and
the amount of loss can be reasonably estimated. Due to the inherent
uncertainties related to the eventual outcome of litigation and
potential insurance recoveries, it is possible that certain matters
may be resolved for amounts materially different from any
provisions or disclosures that the Company has previously made.</p>
</div>
1384000
-9427000
-6383000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Depreciation is computed using the straight-line method over the
following estimated useful lives: </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"></p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: top">
<td style="PADDING-BOTTOM: 1pt; WIDTH: 80%"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; WIDTH: 19%; FONT-WEIGHT: bold">
<font style="FONT: 10pt Times New Roman, Times, Serif"><b>Years</b></font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Furniture, fixtures and
equipment</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 10</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Computers</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 5</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Software</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 5</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Leasehold and building
improvements</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 39</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Buildings</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">39</font></td>
</tr>
</table>
</div>
841000
31700000
2.29
29377000
6457000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Inventory consists of the following as of December 31, 2012 and
2011:</p>
<p style="TEXT-ALIGN: center; BACKGROUND-COLOR: white; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 60%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">
(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 64%">Raw materials</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%">-</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%">2,959</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Work in process and bulk</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">761</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2,591</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Finished
goods</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
32,558</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
29,272</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
33,319</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
34,822</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
</div>
19213000
29614000
-2251000
P3Y7M21D
32675000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">A
summary of the Company’s stock option activity for common
stock for the years ended December 31, 2012, 2011 and 2010 is as
follows:</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 95%; BORDER-COLLAPSE: collapse; FONT: 8pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.25in" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="18">Options</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td nowrap="nowrap"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Shares</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted<br />
Average<br />
Exercise<br />
Price</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted<br />
Average Grant<br />
Date Fair Value</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted Average<br />
Remaining<br />
Contractual Life<br />
(Years)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Aggregate<br />
Intrinsic Value</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="18">
( In thousands, except per share)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="WIDTH: 45%">Outstanding, January 1, 2010</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 8%">2,746</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 8%">5.67</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 8%">2.16</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 8%">6.67</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 8%">11,990</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Granted</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">447</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">9.36</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">5.60</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">9.21</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Exercised</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(292</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.91</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">1.14</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">3.96</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2,400</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Cancelled</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(47</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">7.25</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.02</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">9.80</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Forfeited</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
(136</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
8.08</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
3.14</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
9.44</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Outstanding, December 31, 2010</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2,718</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">6.42</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">2.79</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">7.01</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">1,897</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Granted</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">1,840</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">4.42</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.77</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">10.19</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Exercised</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(194</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.19</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">0.46</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.68</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">733</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Cancelled</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(25</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">7.76</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.88</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">8.14</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Forfeited</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
(77</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
9.46</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
5.99</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
7.19</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Outstanding, December 31, 2011</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">4,262</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">5.69</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">2.83</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">7.59</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">6,945</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Granted</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2,197</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">6.73</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">3.42</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">8.13</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Exercised</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(605</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.29</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">0.85</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.01</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2,573</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Cancelled</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(28</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">7.89</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">3.33</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">0.06</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Forfeited</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
(617</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
6.61</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
3.62</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt">Outstanding, December 31,
2012</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
5,209</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6.40</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
3.21</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
7.79</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6,238</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">-</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">-</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Exercisable at December 31,
2011</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
2,582</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">$</td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
6.12</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">$</td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
2.68</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
6.09</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">$</td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
4,373</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt">Exercisable at December 31,
2012</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
2,391</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6.84</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
4.18</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6.81</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
3,341</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
</div>
1384000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Goodwill</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
excess of purchase price over fair value of assets acquired and
liabilities assumed in business combinations is classified as
goodwill. The Company reviews goodwill for impairment at the
reporting unit level annually or, when events or circumstances
dictate, more frequently. The Company assesses qualitative factors
to determine whether it is more likely than not that the fair value
of its reporting unit is less than its carrying amount. In
performing the qualitative assessment, the Company assesses
relevant events and circumstances that may impact the fair value of
its reporting unit, including the following: (i) macroeconomic
conditions, (ii) industry and market considerations, (iii) overall
financial performance, (iv) events affecting the reporting unit,
(v) share price and (vi) recent fair value calculation for the
reporting unit, if available. The Company performed this
qualitative assessment as of December 31, 2012 as allowable per the
applicable authoritative guidance.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">After
assessing the above described events and circumstances, if the
Company determines that it is more likely than not that the fair
value of its reporting unit is greater than its carrying value,
then no further testing is required. Otherwise, the Company would
perform a two-step impairment test to evaluate goodwill. Under the
first step, the Company compares the estimated fair value of the
reporting unit with its carrying value. If the estimated fair value
of the reporting unit is less than its carrying value, the Company
will complete a second step to determine the amount of the goodwill
impairment that should be recorded.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Based
on the Company’s qualitative assessment, it has concluded
that it was more likely than not that the estimated fair value of
its reporting unit exceeded its carrying value as of December 31,
2012 and thus, did not proceed to the two-step goodwill impairment
test. No indicators of impairment exist primarily because the
Company’s reporting unit’s fair value has consistently
exceeded its carrying value by a significant margin.</p>
</div>
330680000
444000
-19118000
32306000
268000
35023000
-642000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Income Taxes</u></i>:  </p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to reverse. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized as income in the
period that includes the enactment date.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">When
tax returns are filed, it is highly certain that some positions
taken would be sustained upon examination by the taxing
authorities, while others are subject to uncertainty about the
merits of the position taken or the amount of the position that
would be ultimately sustained. The benefit of a tax position is
recognized in the financial statements in the period during which,
based on all available evidence, management believes it is more
likely than not that the position will be sustained upon
examination, including the resolution of appeals or litigation
processes, if any. Tax positions taken are not offset or aggregated
with other positions. Tax positions that meet the
more-likely-than-not recognition threshold are measured as the
largest amount of tax benefit that is more than 50 percent likely
of being realized upon settlement with the applicable taxing
authority. The Company has determined that there were no material
uncertain tax positions and accordingly no associated interest and
penalties were required to be accrued at December 31, 2012 and
2011, respectively.</p>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Securities that were not included in the calculation of diluted
earnings per share because to do so would have been antidilutive
for the periods presented, are as follows:</p>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15.1pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year Ended December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">
(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 55%">Stock options</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">2,391</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">2,582</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">2,341</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Warrants</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
1,681</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">
Total antidilutive common stock equivalents excluded from diluted
earnings per share</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
4,072</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
2,582</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
2,341</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>4.
Property and Equipment</b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Property and equipment consists of the following as of December 31,
2012 and 2011:</p>
<p style="TEXT-ALIGN: center; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">
(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 64%">Buildings and building
improvements</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">12,759</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">12,428</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Furniture, fixtures and equipment</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">24,157</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">21,594</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Computers</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">3,387</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">2,709</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Software</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">7,778</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">7,235</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Leasehold improvements</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">2,670</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">2,620</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Land</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
460</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
460</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">51,211</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">47,046</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Less accumulated
depreciation</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
(21,045</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
)</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
(14,995</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">30,166</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">32,051</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Construction-in-progress</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
3,325</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
1,578</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
33,491</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
33,629</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
<p style="TEXT-ALIGN: center; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Construction-in-progress was primarily related to the upgrade of
the Company’s Lexington, North Carolina distribution
facility. During 2011, the Company was released from its obligation
to purchase $1.2 million of equipment which was previously recorded
in construction-in-progress.</p>
</div>
617000
95425000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
following table reconciles basic weighted-average shares
outstanding to diluted weighted-average shares outstanding for the
years ended December 31, 2012, 2011, and 2010:</p>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15.1pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year Ended December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">
(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="WIDTH: 55%">Weighted-average shares outstanding -
basic</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">32,675</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">27,829</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">27,704</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Effect of
dilutive securities</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt">Weighted-average shares
outstanding - diluted</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
32,675</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
27,829</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
27,704</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
</div>
32675000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>8.
Income Taxes</b></p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company files income tax returns in the U.S. federal jurisdiction
and various state and local jurisdictions. Pursuant to applicable
statutes of limitation, returns open for adjustment by the Internal
Revenue Service (“IRS”) are the consolidated federal
income tax returns for tax years ended December 31, 2011 and 2012.
Pursuant to applicable statutes of limitation, state income tax
returns open for adjustment by the state tax authorities are for
tax years ended December 31, 2004 through December 31, 2012. The
IRS previously examined the Company’s 2008 federal income tax
return, which resulted in no change to the Company’s tax
return. The Company has also recently concluded an examination of
its income tax returns for 2009 and 2010 by the IRS. The
examination resulted in no material changes.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">A
number of years may elapse before an uncertain tax position is
audited and finally resolved. Settlement of any particular position
would usually require the use of cash. The resolution of a matter
would be recognized as an adjustment to the provision for income
taxes and the effective tax rate in the period of resolution. The
Company has determined that there are no material uncertain tax
positions and accordingly no associated interest and penalties are
required to be accrued at December 31, 2012.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Reconciliation of the federal statutory income tax rate to the
Company’s effective tax rate is as follows: </p>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<table style="WIDTH: 95%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.25in" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year Ended December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in; WIDTH: 46%">
Taxes computed at federal tax rate</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">(6,500</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">)</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">(5,025</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">)</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">(4,682</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">State
income taxes, net of federal income tax benefit, excluding change
in valuation allowance</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(281</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(277</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(236</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">Non-taxable
income</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">-</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(6</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(27</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">Meals
and entertainment</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">7</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">6</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">6</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">
Incentive stock options</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">268</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(34</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">83</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">Other
tax assets</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">916</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">556</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(75</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">Change
in valuation allowance – state</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">437</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">404</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">944</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">
Change in valuation allowance - federal</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
5,206</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
4,429</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
5,408</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">
Income tax expense</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
53</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
53</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
1,421</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 <b> </b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
provision for income taxes charged to operations for the years
ended December 31, 2012, 2011 and 2010, consists of the
following:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<table style="WIDTH: 95%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.25in" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year Ended December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 46%">Current tax expense
(benefit)</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">277</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">-</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">(1,630</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Deferred tax
(benefit) expense</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
(224</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
)</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
53</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
3,051</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">Income tax
expense</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
53</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
53</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
1,421</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The tax
effects of temporary differences that give rise to significant
components of deferred tax assets at December 31, 2012 and 2011 are
presented below:</p>
<p style="TEXT-ALIGN: center; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Deferred tax assets:</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 64%">Net operating loss and
credits carryforward</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">15,758</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">8,930</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Inventory</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">366</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">375</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Accrued compensation</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">29</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">393</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Stock-based compensation</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">3,258</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">4,153</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Accrued expenses</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">-</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">174</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Deferred revenue
and reserves</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
678</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
791</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">20,089</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">14,816</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Deferred tax liability:</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Depreciation and amortization</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(3,611</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(4,205</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">-</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">-</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Valuation allowance - state</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(1,785</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">(1,348</td>
<td style="TEXT-ALIGN: left; COLOR: black">)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Valuation
allowance - federal</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
(15,043</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
)</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
(9,837</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 9pt">
Deferred tax liability, net</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
(350</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">)</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
(574</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">)</td>
</tr>
</table>
<p style="TEXT-ALIGN: center; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 The deferred tax amounts mentioned above have been classified
on the accompanying consolidated balance sheets as
follows: </p>
<p style="TEXT-ALIGN: center; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Deferred tax liability, net</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 9pt; WIDTH: 64%">
Noncurrent liability</td>
<td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 15%">
350</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 15%">
574</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%">
 </td>
</tr>
</table>
<p style="TEXT-ALIGN: center; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company evaluates its deferred tax assets on a regular basis to
determine if valuation allowances are required. In its evaluation,
the Company considers taxable loss carryback availability,
expectations of sufficient future taxable income, trends in
earnings, existence of taxable income in recent years, the future
reversal of temporary differences and the available tax planning
strategies that could be implemented, if required. Valuation
allowances are established based on the consideration of all
available evidence using a more likely than not standard. Based on
the Company’s evaluation, a valuation allowance of $16.8
million was established against its net deferred tax assets as of
December 31, 2012. The Company’s deferred tax assets for
which it has not established a valuation allowance relate to
amounts than can be realized through future reversals of existing
taxable temporary differences. The Company’s valuation
allowance will be reversed if and when it becomes more likely than
not that the Company can generate sufficient taxable income in the
future to utilize the tax benefits of the related deferred tax
assets. The noncurrent deferred tax liability of $0.4 million
relates to the excess book basis over tax basis of our goodwill,
net of a tax credit carryforward, which has an indefinite life.
Because goodwill has an indefinite life, the reversal of the book
basis over tax basis is not considered a source of taxable income
to support the realization of the Company’s deferred tax
assets. Subsequent revisions to the estimated net realizable value
of the deferred tax asset or deferred tax liability could cause the
provision for income taxes to vary significantly from period to
period. </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">As of
December 31, 2012, the Company had unused federal net operating
loss carryforwards of approximately $42.7 million, which were
generated during the year ended December 31, 2012, 2011 and 2010.
As of December 31, 2012, the Company had Florida and North Carolina
net operating loss carryforwards of approximately $12.4 million and
$11.0 million, respectively. The state net operating loss
carryforwards, if not utilized, expire beginning in December
2023.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">During
the years ended December 31, 2012, 2011 and 2010 employees
exercised incentive stock options and sold the stock in
disqualifying dispositions. For the year ended December 31, 2010 a
portion of the tax benefit associated with the sale of the stock
has been recognized as an income tax benefit. Generally, incentive
stock options provide employees with significant tax benefits by
allowing the employee to exercise stock options without being taxed
on the intrinsic value on the exercise date provided the employee
owns the stock for specified periods of time. Since the employer
will not receive a tax benefit upon the exercise of incentive stock
options, unless there is a disqualifying disposition, the
compensation expense associated with incentive stock options is
treated as a permanent difference between book and tax accounting
and consequently affects the effective tax rate of the Company. For
the year ended December 31, 2010, the disqualifying disposition of
incentive stock options resulted in a related tax benefit of $0.6
million, which has been recorded as a reduction in income taxes
payable and an increase in additional paid-in capital in the
accompanying consolidated balance sheet; there were no tax benefits
recognized during the years ended December 31, 2012 and 2011.</p>
</div>
-1503000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Restricted Cash</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Restricted cash consists of cash pledged as collateral to secure a
vendor obligation.</p>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u><i>Principles of Consolidation</i>:  </u></i></p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
consolidated financial statements include the accounts of Vitacost
and its wholly-owned subsidiary. All intercompany accounts and
transactions have been eliminated in consolidation.</p>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>12.
Quarterly Selected Financial Data (Unaudited)</b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 8pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">First Quarter</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">Second Quarter</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">Third Quarter</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">Fourth Quarter</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td style="FONT-WEIGHT: bold">(In Thousands, Except per</td>
<td> </td>
<td style="TEXT-ALIGN: center" colspan="2"> </td>
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: center" colspan="2"> </td>
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold">Share
Data)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 10pt; WIDTH: 20%">Net
sales</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">83,592</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">63,762</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">79,877</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">65,891</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">82,218</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">63,456</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">84,992</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">67,414</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 10pt">Operating loss</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(6,573</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(2,216</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(4,310</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,684</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(5,206</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(5,359</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,184</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,566</td>
<td style="TEXT-ALIGN: left">)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 10pt">Net loss</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(6,554</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(2,222</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(4,302</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,700</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(5,141</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(5,341</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,173</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,568</td>
<td style="TEXT-ALIGN: left">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-INDENT: 10pt">Loss per share</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-INDENT: 20pt">Basic</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.21</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.08</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.15</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.19</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.09</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-INDENT: 20pt">Diluted</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.21</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.08</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.15</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.19</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.09</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
</tr>
</table>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">During
the quarter ended December 31, 2012, the Company recorded an
adjustment to reduce bonus expense by $1.1 million dollars.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">During
the quarter ended September 30, 2011, the Company recorded an out
of period adjustment to increase stock-based compensation expense
by $0.4 million related to a stock-based option grant that occurred
in June 2011 under the Company’s 2007 Stock Award Plan, the
terms of which provided for the immediate vesting of certain
options under the grant. The adjustment was to expense the portion
of the award which vested immediately at the grant date. The
Company concluded that the adjustment was not material to the
previously reported consolidated financial statements. </p>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Accrued
expenses consist of the following at December 31, 2012 and
2011:</p>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">
(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 64%">Accrued salaries and
related expenses</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">1,693</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">2,322</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Advertising and related expenses</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">1,110</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">487</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Other accrued
expenses</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
3,742</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
3,616</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6,545</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6,425</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
</div>
121000
P7Y9M15D
33639000
254527000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>3.
Inventory</b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Inventory consists of the following as of December 31, 2012 and
2011:</p>
<p style="TEXT-ALIGN: center; BACKGROUND-COLOR: white; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 60%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">
(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 64%">Raw materials</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%">-</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%">2,959</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Work in process and bulk</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">761</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2,591</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Finished
goods</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
32,558</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
29,272</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
33,319</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
34,822</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
<p style="TEXT-ALIGN: center; BACKGROUND-COLOR: white; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="BACKGROUND-COLOR: white; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
On August 28, 2012, the Company entered into an agreement to
outsource its manufacturing operations and lease its manufacturing
facilities to a third party provider effective September 1, 2012.
In connection with the outsourcing of its manufacturing operations,
the Company sold certain inventory to the third party provider
which will be used to manufacture products for the Company. The
total selling price was $2.2</p>
<p style="BACKGROUND-COLOR: white; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="BACKGROUND-COLOR: white; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
million, which will be paid in six monthly payments of $0.4 million
with the first payment due on October 1, 2012. The Company incurred
a loss of $0.1 million on the sale of the inventory.</p>
</div>
-47000
2000000
76153000
<table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 8pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td></td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">First Quarter</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">Second Quarter</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">Third Quarter</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">Fourth Quarter</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td style="FONT-WEIGHT: bold">(In Thousands, Except per</td>
<td> </td>
<td style="TEXT-ALIGN: center" colspan="2"> </td>
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: center" colspan="2"> </td>
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
 </td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td style="BORDER-BOTTOM: black 1pt solid; FONT-WEIGHT: bold">Share
Data)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 10pt; WIDTH: 20%">Net
sales</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">83,592</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">63,762</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">79,877</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">65,891</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">82,218</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">63,456</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">84,992</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 7%">67,414</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 10pt">Operating loss</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(6,573</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(2,216</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(4,310</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,684</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(5,206</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(5,359</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,184</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,566</td>
<td style="TEXT-ALIGN: left">)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; TEXT-INDENT: 10pt">Net loss</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(6,554</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(2,222</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(4,302</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,700</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(5,141</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(5,341</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,173</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(3,568</td>
<td style="TEXT-ALIGN: left">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-INDENT: 10pt">Loss per share</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-INDENT: 20pt">Basic</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.21</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.08</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.15</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.19</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.09</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-INDENT: 20pt">Diluted</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.21</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.08</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.15</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.19</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.09</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">(0.13</td>
<td style="TEXT-ALIGN: left">)</td>
</tr>
</table>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>10.
Retirement Plan</b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company has a defined contribution plan which covers substantially
all of the Company’s employees. Under the plan, the Company
matches 100% of the first 3% of contributions and 50% of the next
2% of contributions. The Company’s contribution is based on a
maximum of 5% of the employee’s contributions. The amount
contributed to the plan by the Company amounted to $0.7 million,
$0.6 million, and $0.3 million for the years ended December 31,
2012, 2011, and 2010, respectively.</p>
</div>
-916000
P5Y
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Stock-Based Compensation</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">In
September 2011, the Company obtained shareholder approval of the
2011 Incentive Compensation Plan (the “Plan”) which
replaced the 2007 Stock Award Plan (the “2007 Plan”).
The 2007 Plan will continue to govern awards previously granted
under it. The Plan’s share reserve includes the sum of 6.0
million shares of the Company’s common stock, plus (i) any
shares of its common stock which have been reserved but not issued
pursuant to any awards granted under the 2007 Plan, and (ii) the
number of shares subject to outstanding awards under the 2007 Plan
that expire or otherwise terminate without having been exercised in
full, or are forfeited to or repurchased by the Company. Under the
terms of the Plan, options to purchase stock are granted at an
exercise price that approximates the fair market value of the
underlying shares at the time of the grant. Nonqualified options
generally become exercisable on the date of grant and expire in ten
years. Incentive stock options generally become exercisable over a
five-year period and the maximum term of the option may not exceed
ten years. Compensation expense related to stock options recognized
in earnings in 2012, 2011, and 2010, was approximately $2.0
million, $1.0 million, and $1.5 million on a pretax basis,
respectively.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company recognizes compensation expense for stock awards based on
their fair value and related tax effects over the requisite service
period. The fair value of each option award is estimated on the
date of grant using an option valuation method that uses the
assumptions noted in the below table. The valuation technique
incorporates assumptions for the expected volatility of the stock
price, the expected term of the option, expected dividends,
forfeitures and risk-free interest rate for the expected term of
the option. As a result of its limited trading history, the Company
uses expected volatilities based on the historical volatility of a
sample of companies in a similar industry and of a comparable size
as the Company. The expected term of the option is calculated using
simplified method, which analyzes the vesting terms of an option
along with the contractual term, setting the expected term at a
midpoint in between. The risk-free interest rate takes into account
the time-value of money. The risk-free rate for periods within the
contractual life of the option is based on the U.S. Treasury yield
curve in effect at time of grant. The Company estimates forfeitures
based on historical pre-vesting forfeitures and revises those
estimates in subsequent periods if actual forfeitures differ from
those estimates.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
fair value of each option granted was estimated using the following
assumptions:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold">
2012</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold">
2011</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold">
2010</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 46%; COLOR: black">Expected
life - employees</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">
<font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">
6-7 years</font></td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">
<font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">
N/A</font></td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">
<font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">
7 years</font></td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; COLOR: black">Expected life -
executives</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">6-7
years</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">5.5 - 6.5
years</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">5.75 - 7
years</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; COLOR: black">Volatility
percentage</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">54.0%-55.2</font></td>
<td style="TEXT-ALIGN: left">%</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">62.6% - 63.9</font></td>
<td style="TEXT-ALIGN: left">%</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">67.9% - 68.8</font></td>
<td style="TEXT-ALIGN: left">%</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; COLOR: black">Risk free interest
rate</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">0.83%-1.22</font></td>
<td style="TEXT-ALIGN: left">%</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">1.13% - 1.94</font></td>
<td style="TEXT-ALIGN: left">%</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">1.55% - 3.16</font></td>
<td style="TEXT-ALIGN: left">%</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="COLOR: black">Dividends</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">None</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">None</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">None</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
</table>
</div>
700000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>11.
Contingencies</b> </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Securities Class Action</u>:</i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">On May
24, 2010, a punitive class action complaint was filed in the United
States District Court for the Southern District of Florida against
the Company and certain current and former officers and directors
by a stockholder on behalf of herself and other stockholders who
purchased Vitacost common stock between September 24, 2009 and
April 20, 2010, captioned Miyahira v. Vitacost.com, Inc., Ira P.
Kerker, Richard P. Smith, Stewart Gitler, Allen S. Josephs, David
N. Ilfeld, Lawrence A. Pabst, Eran Ezra, and Robert G. Trapp, Case
9:10-cv-80644-KLR. After being appointed to represent the purported
class of shareholders, the lead plaintiffs filed an amended
complaint asserting claims under Sections 11, 12(a)(2), and 15 of
the Securities Act of 1933 and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated thereunder against Vitacost, its current and former
officers and directors, and the underwriters of its initial public
offering (“IPO”). On December 12, 2011, the Court
granted defendants’ motion to dismiss the complaint, and
granted plaintiffs leave to amend.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">On
January 11, 2012, lead plaintiff filed its second amended complaint
asserting claims under Sections 11, 12(a)(2), and 15 of the
Securities Act of 1933 against Vitacost, its current and former
officers and directors, and its underwriters. Lead plaintiff
purports to bring its action on behalf of investors who purchased
stock in connection with or traceable to the Company’s IPO
between September 24, 2009 and April 20, 2010. The complaint
alleges that the defendants violated the federal securities laws
during the period by, among other things, disseminating false and
misleading statements and/or concealing material facts concerning
the Company’s current and prospective business and financial
results. The complaint also alleges that as a result of these
actions the Company’s stock price was artificially inflated
during the class period. The complaint seeks unspecified
compensatory damages, costs, and expenses.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">On June
25, 2012, the Southern District of Florida entered its order
granting defendants’ motion to dismiss in full and dismissing
the second amended complaint with prejudice. On July 23, 2012, lead
plaintiff filed a notice of appeal to the Eleventh Circuit of the
order granting defendants’ motion to dismiss.
Plaintiff-Appellant filed its opening appellate brief on September
17, 2012, Defendant-Appellees filed their responding brief on
October 29, 2012, and Plaintiff Appellant filed its reply in
support of its opening brief on December 3, 2012. Oral argument
before the Eleventh Circuit is currently scheduled for the week of
April 8, 2013.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company records provisions in its consolidated financial statements
for pending litigation when it determines that an unfavorable
outcome is probable and the amount of loss can be reasonably
estimated. As of December 31, 2012, the Company has concluded that
it is not probable that a loss has been incurred and is unable to
estimate the possible loss or range of loss that could result from
an unfavorable verdict. Therefore, the Company has not provided any
amounts in the consolidated financial statements for an unfavorable
outcome. The Company believes that it has meritorious arguments for
affirmation of the Southern District of Florida’s order that
it will raise in the appeal. It is possible that the
Company’s consolidated financial statements could be
materially adversely affected by an unfavorable outcome.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Sales or Other Taxes</u>:  </i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">A
number of states have sought to impose sales or other taxon 
collection obligations online retailers. Certain states have
imposed such a sales tax obligation requirement on remote online
retailers that use residents of that state to directly or
indirectly refer potential customers, via a link on an internet
website or other means, to the online retailer for a
commission-based fee. There is still significant uncertainty as to
whether or how existing laws governing these matters apply to
Vitacost and its relationships with its sales affiliates and how
these laws will be interpreted for the Company and other online
retailers. As a result, it is currently not possible to determine
the ultimate outcome as to whether these obligations apply to the
Company under its specific facts and circumstances. Because the
Company does not believe that it is probable that these obligations
are applicable to its specific facts and circumstances, it has not
accrued for these obligations as of December 31, 2012. The Company
is also currently unable to estimate the amount of the loss, if
any, should these obligations apply to it. The eventual outcome of
a successful assertion by one or more states that the Company
should collect sales or other taxes may be materially different
from any provisions or disclosures the Company has previously made
and could have a material adverse effect on the Company’s
financial position, results of operations and cash flows.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i> </i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Other matters</u>:</i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">In
addition to the matter described above, the Company is involved in
litigation and administrative proceedings primarily arising in the
normal course of its business. In the opinion of the Company,
except as set forth above, its liability, if any, under any other
pending litigation or administrative proceedings would not
materially affect its financial condition, results of operations or
cash flows. Furthermore, the Company has not been the subject of
any product liability litigation.</p>
</div>
32675000
-224000
4072000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Future
minimum lease payments, by year, and in the aggregate, under
operating leases are due as follows as of December 31,
2012: </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 50%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; FONT-WEIGHT: bold"> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">
Operating</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-WEIGHT: bold">
Year Ending December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">Leases</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left"> </td>
<td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 75%">2013</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 22%; COLOR: black">1,700</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">2014</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">1,660</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">2015</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">588</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">2016</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">606</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">2017</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">624</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Thereafter</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
751</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">Total minimum
lease payments</td>
<td style="PADDING-BOTTOM: 2.5pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; COLOR: black">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; COLOR: black">
5,929</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; COLOR: black">
 </td>
</tr>
</table>
</div>
-19171000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Long-Lived Assets</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Long-lived assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. The Company would evaluate potential
impairment by comparing the carrying amount of the asset with the
estimated undiscounted future cash flows associated with the use of
the asset and its eventual disposition. Should the review indicate
the asset is not recoverable; the Company’s carrying value of
the asset would be reduced to its estimated fair value, which is
measured by future discounted cash flows.</p>
</div>
1790000
2000000
2197000
53000
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Accounting Estimates</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
preparation of the consolidated financial statements in conformity
with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates. Significant estimates inherent in the
preparation of the accompanying consolidated financial statements
include management’s forecast of future cash flows used as a
basis to assess recoverability of long-lived assets, including
intangible assets and goodwill; the reserve for inventory
obsolescence, deferred revenue and assumptions used in the
valuation of the Company’s stock-based compensation.</p>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Earnings per Share </u></i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company computed earnings per share by dividing net income by the
weighted-average number of common shares outstanding during the
period. Diluted earnings per share is computed by giving effect to
all potentially dilutive common shares, including stock options and
warrants. The following table reconciles basic weighted-average
shares outstanding to diluted weighted-average shares outstanding
for the years ended December 31, 2012, 2011, and 2010:</p>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15.1pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year Ended December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">
(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="WIDTH: 55%">Weighted-average shares outstanding -
basic</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">32,675</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">27,829</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">27,704</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Effect of
dilutive securities</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt">Weighted-average shares
outstanding - diluted</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
32,675</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
27,829</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
27,704</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15.1pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">For the
periods where the Company reported losses, all common stock
equivalents are excluded from the computation of diluted earnings
per share, since the result would be antidilutive. Securities that
were not included in the calculation of diluted earnings per share
because to do so would have been antidilutive for the periods
presented, are as follows:</p>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15.1pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year Ended December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">
(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 55%">Stock options</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">2,391</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">2,582</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 12%">2,341</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Warrants</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
1,681</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in">
Total antidilutive common stock equivalents excluded from diluted
earnings per share</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
4,072</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
2,582</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
2,341</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
fair value of each option granted was estimated using the following
assumptions:</p>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: top">
<td style="PADDING-BOTTOM: 1pt; WIDTH: 40%" nowrap="nowrap">
 </td>
<td style="PADDING-BOTTOM: 1pt; WIDTH: 1%"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; WIDTH: 18%; FONT-WEIGHT: bold">
<font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black"><b>2012</b></font></td>
<td style="WIDTH: 1%"> </td>
<td style="PADDING-BOTTOM: 1pt; WIDTH: 1%"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; WIDTH: 18%; FONT-WEIGHT: bold">
<font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black"><b>2011</b></font></td>
<td style="WIDTH: 1%"> </td>
<td style="PADDING-BOTTOM: 1pt; WIDTH: 1%"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; WIDTH: 18%; FONT-WEIGHT: bold">
<font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black"><b>2010</b></font></td>
<td style="WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: top">
<td nowrap="nowrap"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">Expected
life - employees</font></td>
<td> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">6-7
years</font></td>
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">N/A</font></td>
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">7
years</font></td>
<td> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: top">
<td nowrap="nowrap"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">Expected
life - executives</font></td>
<td> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">6-7
years</font></td>
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">5.5 - 6.5
years</font></td>
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">5.75 - 7
years</font></td>
<td> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: top">
<td nowrap="nowrap"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">Volatility
percentage</font></td>
<td> </td>
<td style="TEXT-ALIGN: right" nowrap="nowrap"><font style="FONT: 10pt Times New Roman, Times, Serif">54.0%-55.2</font></td>
<td>%</td>
<td> </td>
<td style="TEXT-ALIGN: right" nowrap="nowrap"><font style="FONT: 10pt Times New Roman, Times, Serif">62.6% - 63.9</font></td>
<td>%</td>
<td> </td>
<td style="TEXT-ALIGN: right" nowrap="nowrap"><font style="FONT: 10pt Times New Roman, Times, Serif">67.9% - 68.8</font></td>
<td>%</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: top">
<td nowrap="nowrap"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">Risk free
interest rate</font></td>
<td> </td>
<td style="TEXT-ALIGN: right" nowrap="nowrap"><font style="FONT: 10pt Times New Roman, Times, Serif">0.83%-1.22</font></td>
<td>%</td>
<td> </td>
<td style="TEXT-ALIGN: right" nowrap="nowrap"><font style="FONT: 10pt Times New Roman, Times, Serif">1.13% - 1.94</font></td>
<td>%</td>
<td> </td>
<td style="TEXT-ALIGN: right" nowrap="nowrap"><font style="FONT: 10pt Times New Roman, Times, Serif">1.55% - 3.16</font></td>
<td>%</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: top">
<td nowrap="nowrap"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">Dividends</font></td>
<td> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">None</font></td>
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">None</font></td>
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">None</font></td>
<td> </td>
</tr>
</table>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>1.
Nature of Business, Recent Developments, Significant Accounting
Policies and Recent Accounting Guidance</b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 
<i> </i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><i>Nature of Business</i></b></p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Vitacost.com, Inc.  (“Vitacost” or the
“Company”) is a leading online retailer of health and
wellness products, including dietary supplements such as vitamins,
minerals, herbs and other botanicals, as well as cosmetics, natural
personal care products, pet products, sports nutrition and health
foods. Vitacost was incorporated in 1994 and began its online
retail activity in 1999.  Vitacost sells an internally
developed proprietary line of nutraceuticals as well as a wide
selection of other manufacturers’ brand-name health and
wellness products.  The Company ships products from two
distribution centers located in Lexington, North Carolina and Las
Vegas, Nevada.  </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><i>Significant Accounting Policies</i></b></p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Principles of Consolidation</u></i>:  </p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
consolidated financial statements include the accounts of Vitacost
and its wholly-owned subsidiary. All intercompany accounts and
transactions have been eliminated in
consolidation.    </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Reclassifications</u></i>:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">A
reclassification on the 2011 consolidated balance sheets has been
made to conform to the 2012 presentation. Reclassifications on the
2011 and 2010 consolidated statements of cash flows has been made
to conform to the 2012 presentation.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Accounting Estimates</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
preparation of the consolidated financial statements in conformity
with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates. Significant estimates inherent in the
preparation of the accompanying consolidated financial statements
include management’s forecast of future cash flows used as a
basis to assess recoverability of long-lived assets, including
intangible assets and goodwill, the reserve for inventory
obsolescence, deferred revenue and assumptions used in the
valuation of the Company’s stock-based compensation. 
<i> </i></p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Cash and Cash Equivalents</u></i>: </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company considers all highly-liquid investments purchased with
original maturities of three months or less at the date of purchase
to be cash equivalents. The Company maintains its cash and cash
equivalents in various bank deposit accounts which, at times, may
exceed the federally-insured limits. The Company has not
experienced any losses in such accounts. The Company believes it is
not exposed to any significant credit risk on such
accounts. </p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Restricted Cash</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Restricted cash consists of cash pledged as collateral to secure a
vendor obligation.  <i> </i> </p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Accounts Receivable</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Accounts receivable consist primarily of amounts in transit from
banks for customer credit card, debit card and electronic benefit
transfer transactions that are generally processed by the banks
within seven days of authorization. Based on the Company’s
historical collection experience and a review of the status of
accounts receivable, an allowance for doubtful accounts of $0.2
million was recorded as of December 31, 2012 and 2011. 
<i> </i></p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Inventory</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Inventory, consisting principally of health and wellness products,
is primarily stated at the lower of cost or market using the first
in, first out (“FIFO”) method.   </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>  </i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Property and Equipment</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Property and equipment is stated at cost less accumulated
depreciation. Leasehold improvements are amortized using the
straight-line method over the shorter of the estimated useful life
of the assets or the lease term. Depreciation is computed using the
straight-line method over the following estimated useful
lives: </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: top">
<td style="PADDING-BOTTOM: 1pt; WIDTH: 80%"> </td>
<td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; WIDTH: 19%; FONT-WEIGHT: bold">
<font style="FONT: 10pt Times New Roman, Times, Serif"><b>Years</b></font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Furniture, fixtures and
equipment</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 10</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Computers</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 5</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Software</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 5</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Leasehold and building
improvements</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">3 – 39</font></td>
</tr>
<tr style="VERTICAL-ALIGN: top">
<td><font style="FONT: 10pt Times New Roman, Times, Serif">Buildings</font></td>
<td style="TEXT-ALIGN: center"> </td>
<td style="TEXT-ALIGN: center"><font style="FONT: 10pt Times New Roman, Times, Serif">39</font></td>
</tr>
</table>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Upon
retirement or sale, the cost and accumulated depreciation are
eliminated from the accounts and the gain or loss, if any, is
included in the consolidated statements of operations.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Goodwill</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
excess of purchase price over fair value of assets acquired and
liabilities assumed in business combinations is classified as
goodwill. The Company reviews goodwill for impairment at the
reporting unit level annually or, when events or circumstances
dictate, more frequently. The Company assesses qualitative factors
to determine whether it is more likely than not that the fair value
of its reporting unit is less than its carrying amount. In
performing the qualitative assessment, the Company assesses
relevant events and circumstances that may impact the fair value of
its reporting unit, including the following: (i) macroeconomic
conditions, (ii) industry and market considerations, (iii) overall
financial performance, (iv) events affecting the reporting unit,
(v) share price and (vi) recent fair value calculation for the
reporting unit, if available. The Company performed this
qualitative assessment as of December 31, 2012 as allowable per the
applicable authoritative guidance.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">After
assessing the above described events and circumstances, if the
Company determines that it is more likely than not that the fair
value of its reporting unit is greater than its carrying value,
then no further testing is required. Otherwise, the Company would
perform a two-step impairment test to evaluate goodwill. Under the
first step, the Company compares the estimated fair value of the
reporting unit with its carrying value. If the estimated fair value
of the reporting unit is less than its carrying value, the Company
will complete a second step to determine the amount of the goodwill
impairment that should be recorded.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Based
on the Company’s qualitative assessment, it has concluded
that it was more likely than not that the estimated fair value of
its reporting unit exceeded its carrying value as of December 31,
2012 and thus, did not proceed to the two-step goodwill impairment
test. No indicators of impairment exist primarily because the
Company’s reporting unit’s fair value has consistently
exceeded its carrying value by a significant margin.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i> </i> </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Long-Lived Assets</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Long-lived assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. The Company would evaluate potential
impairment by comparing the carrying amount of the asset with the
estimated undiscounted future cash flows associated with the use of
the asset and its eventual disposition. Should the review indicate
the asset is not recoverable, the Company’s carrying value of
the asset would be reduced to its estimated fair value, which is
measured by future discounted cash flows.  <i> </i></p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Revenue Recognition and Freight</u></i>:  </p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Revenue
from the sale of vitamins, nutritional supplements and other health
and wellness products is recognized when all the following criteria
are met: a customer executes an order, the sales price and the
shipping and handling fee have been determined, credit card
authorization has occurred, collection is reasonably assured and
the product has been received by the customer. The Company
establishes a deferred revenue liability which represents orders
that have been shipped but not yet received by the customer at the
end of a given period. The Company’s sales terms grant
customers certain limited rights of return for a 30-day period. It
has been the Company’s experience that such returns have been
insignificant. The Company recorded a reserve for returns of $0.2
million at December 31, 2012 and 2011.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Freight
billed to customers is classified as revenue and totaled
approximately $12.5 million, $9.0 million and $14.5 million for the
years ended December 31, 2012, 2011, and 2010, respectively.
Freight costs are expensed as incurred and recorded as a component
of cost of goods sold. Freight expense totaled approximately $31.7
million, $26.0 million, and $23.0 million for the years ended
December 31, 2012, 2011, and 2010, respectively.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 <i> </i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Operating Expenses</u></i>:  </p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company’s operating expenses are grouped into three
categories: fulfillment, sales and marketing, and general and
administrative. The following is a brief synopsis of each
category:</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
   </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
<i>Fulfillment Expenses</i>:</p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
Fulfillment expenses include the costs of warehousing and shipping
supplies, machinery and equipment, maintenance, employees,
professional services and rent.</p>
<p style="TEXT-INDENT: 15.1pt; MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
<i>Sales and Marketing Expenses</i>:</p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
Sales and marketing expenses include online advertising and
promotional expenditures, including third-party content license
fees, affiliates and partners’ commissions, traditional media
advertising, print expenses and payroll related expenses for
personnel engaged in marketing, sales, customer service, and
website development and maintenance. We expense advertising costs
as incurred.</p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
<i>General and Administrative Expenses: </i></p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
General and administrative expenses consist of executive
compensation, information technology expenses, credit card
processing fees, legal fees, professional services, employee
expenses and general corporate expenses.  </p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Earnings per Share </u></i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company computed earnings per share by dividing net income by the
weighted-average number of common shares outstanding during the
period. Diluted earnings per share is computed by giving effect to
all potentially dilutive common shares, including stock options and
warrants. The following table reconciles basic weighted-average
shares outstanding to diluted weighted-average shares outstanding
for the years ended December 31, 2012, 2011, and 2010:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year Ended December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">
(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="WIDTH: 61%">Weighted-average shares outstanding -
basic</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%">32,675</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%">27,829</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%">27,704</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Effect of
dilutive securities</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt">Weighted-average shares
outstanding - diluted</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
32,675</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
27,829</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
27,704</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15.1pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">For the
periods where the Company reported losses, all common stock
equivalents are excluded from the computation of diluted earnings
per share, since the result would be antidilutive. Securities that
were not included in the calculation of diluted earnings per share
because to do so would have been antidilutive for the periods
presented, are as follows:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year Ended December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">(In
thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 61%">Stock options</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%">2,391</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%">2,582</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 10%">2,341</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Warrants</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
1,681</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.125in; PADDING-LEFT: 0.125in">
Total antidilutive common stock equivalents excluded from diluted
earnings per share</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
4,072</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
2,582</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
2,341</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15.1pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Stock-Based Compensation</u></i>:</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">In
September 2011, the Company obtained shareholder approval of the
2011 Incentive Compensation Plan (the “Plan”) which
replaced the 2007 Stock Award Plan (the “2007 Plan”).
The 2007 Plan will continue to govern awards previously granted
under it. The Plan’s share reserve includes the sum of 6.0
million shares of the Company’s common stock, plus (i) any
shares of its common stock which have been reserved but not issued
pursuant to any awards granted under the 2007 Plan, and (ii) the
number of shares subject to outstanding awards under the 2007 Plan
that expire or otherwise terminate without having been exercised in
full, or are forfeited to or repurchased by the Company. Under the
terms of the Plan, options to purchase stock are granted at an
exercise price that approximates the fair market value of the
underlying shares at the time of the grant. Nonqualified options
generally become exercisable on the date of grant and expire in ten
years. Incentive stock options generally become exercisable over a
five-year period and the maximum term of the option may not exceed
ten years. Compensation expense related to stock options recognized
in earnings in 2012, 2011, and 2010, was approximately $2.0
million, $1.0 million, and $1.5 million on a pretax basis,
respectively.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company recognizes compensation expense for stock awards based on
their fair value and related tax effects over the requisite service
period. The fair value of each option award is estimated on the
date of grant using an option valuation method that uses the
assumptions noted in the below table. The valuation technique
incorporates assumptions for the expected volatility of the stock
price, the expected term of the option, expected dividends,
forfeitures and risk-free interest rate for the expected term of
the option. As a result of its limited trading history, the Company
uses expected volatilities based on the historical volatility of a
sample of companies in a similar industry and of a comparable size
as the Company. The expected term of the option is calculated using
simplified method, which analyzes the vesting terms of an option
along with the contractual term, setting the expected term at a
midpoint in between. The risk-free interest rate takes into account
the time-value of money. The risk-free rate for periods within the
contractual life of the option is based on the U.S. Treasury yield
curve in effect at time of grant. The Company estimates forfeitures
based on historical pre-vesting forfeitures and revises those
estimates in subsequent periods if actual forfeitures differ from
those estimates.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
fair value of each option granted was estimated using the following
assumptions:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold">
2012</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold">
2011</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold">
2010</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 46%; COLOR: black">Expected
life - employees</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">
<font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">
6-7 years</font></td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">
<font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">
N/A</font></td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">
<font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">
7 years</font></td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; COLOR: black">Expected life -
executives</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">6-7
years</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">5.5 - 6.5
years</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">5.75 - 7
years</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; COLOR: black">Volatility
percentage</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">54.0%-55.2</font></td>
<td style="TEXT-ALIGN: left">%</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">62.6% - 63.9</font></td>
<td style="TEXT-ALIGN: left">%</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">67.9% - 68.8</font></td>
<td style="TEXT-ALIGN: left">%</td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; COLOR: black">Risk free interest
rate</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">0.83%-1.22</font></td>
<td style="TEXT-ALIGN: left">%</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">1.13% - 1.94</font></td>
<td style="TEXT-ALIGN: left">%</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"><font style="FONT: 10pt Times New Roman, Times, Serif">1.55% - 3.16</font></td>
<td style="TEXT-ALIGN: left">%</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="COLOR: black">Dividends</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">None</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">None</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black"><font style="FONT: 10pt Times New Roman, Times, Serif; COLOR: black">None</font></td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
</table>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 <i><u>Fair Value of Financial Instruments</u></i>:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Existing accounting guidance defines fair value, establishes a
framework and gives guidance regarding the methods used for
measuring fair value, and requires disclosures about fair value
measurements. The guidance applies to all assets and liabilities
that are being measured and reported on a fair value basis. It
requires disclosure that establishes a framework for measuring fair
value in GAAP and about fair value measurements. This guidance
enables the reader of the financial statements to assess the inputs
used to develop those measurements by establishing a hierarchy for
ranking the quality and reliability of the information used to
determine fair values. Assets and liabilities carried at fair value
are classified and disclosed in one of the following three
categories:</p>
<p style="TEXT-INDENT: 18.1pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>Level 1</i>:  Quoted market prices in active markets
for identical assets or liabilities.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>Level 2</i>:  Observable market based inputs or
unobservable inputs that are corroborated by market data.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>Level 3</i>:  Unobservable inputs that are not
corroborated by market data. </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
carrying amounts of other financial instruments, including cash and
cash equivalents, accounts receivable, other receivables and
accounts payable approximate fair value due to the short maturity
of these instruments. Cash and cash equivalents are a Level 1
instrument within the fair value hierarchy.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  <i> </i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Concentration of Credit Risk</u>:</i></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company’s cash and cash equivalents were held by one major
financial institution and for certain accounts exceed federally
insured limits. These cash and cash equivalent balances could be
impacted if this financial institution fails or is subjected to
other adverse conditions in the financial markets.  To
date, the Company has experienced no loss or lack of access to its
cash and cash equivalents.</p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Income Taxes</u></i>:  </p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to reverse. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized as income in the
period that includes the enactment date.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">When
tax returns are filed, it is highly certain that some positions
taken would be sustained upon examination by the taxing
authorities, while others are subject to uncertainty about the
merits of the position taken or the amount of the position that
would be ultimately sustained. The benefit of a tax position is
recognized in the financial statements in the period during which,
based on all available evidence, management believes it is more
likely than not that the position will be sustained upon
examination, including the resolution of appeals or litigation
processes, if any. Tax positions taken are not offset or aggregated
with other positions. Tax positions that meet the
more-likely-than-not recognition threshold are measured as the
largest amount of tax benefit that is more than 50 percent likely
of being realized upon settlement with the applicable taxing
authority. The Company has determined that there were no material
uncertain tax positions and accordingly no associated interest and
penalties were required to be accrued at December 31, 2012 and
2011, respectively.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
  </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Contingencies</u></i>:  </p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">On an
ongoing basis, the Company assesses potential liabilities related
to lawsuits or claims brought against it. While it is typically
very difficult to determine the timing and ultimate outcome of such
actions, the Company’s management uses their best judgment to
determine if it is probable that it will incur an expense related
to the settlement or final adjudication of such matters and whether
a reasonable estimation of such probable loss, if any, can be made.
In assessing probable losses, the Company takes into consideration
estimates of the amount of insurance recoveries, if any. The
Company accrues a liability when it believes a loss is probable and
the amount of loss can be reasonably estimated. Due to the inherent
uncertainties related to the eventual outcome of litigation and
potential insurance recoveries, it is possible that certain matters
may be resolved for amounts materially different from any
provisions or disclosures that the Company has previously
made.  <i> </i></p>
<p style="BACKGROUND-COLOR: white; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="BACKGROUND-COLOR: white; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b><i>Recent Accounting Guidance</i></b>  <i> </i></p>
<p style="BACKGROUND-COLOR: white; TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Recently Adopted Accounting Guidance</u>:</i></p>
<p style="BACKGROUND-COLOR: white; TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">On
January 1, 2012, the Company adopted provisions of the
authoritative guidance related to changes to fair value measurement
and disclosure. Specifically, the guidance includes clarification
about when the concept of highest and best use is applicable to
fair value measurements, requires quantitative disclosures about
inputs used and qualitative disclosures about the sensitivity of
recurring Level 3 measurements, and requires the classification of
all assets and liabilities measured at fair value in the fair value
hierarchy, including those assets and liabilities which are not
recorded at fair value but for which fair value is disclosed. The
adoption of this guidance did not have a material impact on the
Company’s consolidated financial statements.</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="BACKGROUND-COLOR: white; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
On January 1, 2012, the Company adopted provisions of the
authoritative guidance related to the changes to the presentation
of comprehensive income. Specifically, the guidance gives an entity
the option to present the total of comprehensive income, the
components of net income, and the components of other comprehensive
income either in a single continuous statement of comprehensive
income or in two separate but consecutive statements. The Company
elected to present components of net income and other comprehensive
income in a single continuous statement. The components of other
comprehensive income are presented net of the related tax effects.
Other than the changes in presentation, the adoption of this
guidance did not have a material impact on the Company’s
consolidated financial statements.</p>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>6.
Stock Option Plan</b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">A
summary of the Company’s stock option activity for common
stock for the years ended December 31, 2012, 2011 and 2010 is as
follows:</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 95%; BORDER-COLLAPSE: collapse; FONT: 8pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.25in" cellspacing="0" cellpadding="0">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="18">Options</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td nowrap="nowrap"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Shares</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted<br />
Average<br />
Exercise<br />
Price</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted<br />
Average Grant<br />
Date Fair Value</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted Average<br />
Remaining<br />
Contractual Life<br />
(Years)</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Aggregate<br />
Intrinsic Value</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap">
 </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="18">
( In thousands, except per share)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="WIDTH: 45%">Outstanding, January 1, 2010</td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 8%">2,746</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 8%">5.67</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 8%">2.16</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 8%">6.67</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
<td style="WIDTH: 1%"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 8%">11,990</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Granted</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">447</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">9.36</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">5.60</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">9.21</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Exercised</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(292</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.91</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">1.14</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">3.96</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2,400</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Cancelled</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(47</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">7.25</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.02</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">9.80</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Forfeited</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
(136</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
8.08</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
3.14</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
9.44</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Outstanding, December 31, 2010</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2,718</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">6.42</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">2.79</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">7.01</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">1,897</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Granted</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">1,840</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">4.42</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.77</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">10.19</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Exercised</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(194</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.19</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">0.46</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.68</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">733</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Cancelled</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(25</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">7.76</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.88</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">8.14</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Forfeited</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
(77</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
9.46</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
5.99</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
7.19</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Outstanding, December 31, 2011</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">4,262</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">5.69</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">2.83</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">7.59</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left">$</td>
<td style="TEXT-ALIGN: right">6,945</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Granted</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2,197</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">6.73</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">3.42</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">8.13</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Exercised</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(605</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.29</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">0.85</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2.01</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">2,573</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Cancelled</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">(28</td>
<td style="TEXT-ALIGN: left">)</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">7.89</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">3.33</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">0.06</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Forfeited</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
(617</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
6.61</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
3.62</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
-</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
 </td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt">Outstanding, December 31,
2012</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
5,209</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6.40</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
3.21</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
7.79</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6,238</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">-</td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right">-</td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Exercisable at December 31,
2011</td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
2,582</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">$</td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
6.12</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">$</td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
2.68</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
6.09</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">$</td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right">
4,373</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt">Exercisable at December 31,
2012</td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
2,391</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6.84</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
4.18</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
 </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6.81</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
3,341</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">As of
December 31, 2012 there was approximately $7.2 million of total
unrecognized compensation cost, net of estimated forfeitures
related to stock options granted under the Company’s stock
incentive plan, which is expected to be recognized over a weighted
average period of 3.64 years.</p>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Fair Value of Financial Instruments</u></i>:</p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Existing accounting guidance defines fair value, establishes a
framework and gives guidance regarding the methods used for
measuring fair value, and requires disclosures about fair value
measurements. The guidance applies to all assets and liabilities
that are being measured and reported on a fair value basis. It
requires disclosure that establishes a framework for measuring fair
value in GAAP and about fair value measurements. This guidance
enables the reader of the financial statements to assess the inputs
used to develop those measurements by establishing a hierarchy for
ranking the quality and reliability of the information used to
determine fair values. Assets and liabilities carried at fair value
are classified and disclosed in one of the following three
categories:</p>
<p style="TEXT-INDENT: 18.1pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>Level 1</i>:  Quoted market prices in active markets
for identical assets or liabilities.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>Level 2</i>:  Observable market based inputs or
unobservable inputs that are corroborated by market data.</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i>Level 3</i>:  Unobservable inputs that are not
corroborated by market data. </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<b> </b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
carrying amounts of other financial instruments, including cash and
cash equivalents, accounts receivable, other receivables and
accounts payable approximate fair value due to the short maturity
of these instruments. Cash and cash equivalents are a Level 1
instrument within the fair value hierarchy.</p>
</div>
120000
3.42
33505000
28000
P30D
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>5.
Accrued Expenses  </b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">Accrued
expenses consist of the following at December 31, 2012 and
2011:</p>
<p style="TEXT-ALIGN: center; TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">
(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 64%">Accrued salaries and
related expenses</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">1,693</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">2,322</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Advertising and related expenses</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">1,110</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">487</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Other accrued
expenses</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
3,742</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
3,616</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6,545</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
6,425</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
Property and equipment consists of the following as of December 31,
2012 and 2011:</p>
<p style="TEXT-ALIGN: center; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; COLOR: black; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black; FONT-WEIGHT: bold">
 </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="FONT-WEIGHT: bold"> </td>
<td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">
(In thousands)</td>
<td style="FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; WIDTH: 64%">Buildings and building
improvements</td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">12,759</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
<td style="WIDTH: 1%; COLOR: black"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td>
<td style="TEXT-ALIGN: right; WIDTH: 15%; COLOR: black">12,428</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Furniture, fixtures and equipment</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">24,157</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">21,594</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td>Computers</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">3,387</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">2,709</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td>Software</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">7,778</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">7,235</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Leasehold improvements</td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">2,670</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">2,620</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Land</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
460</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
460</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">51,211</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">47,046</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Less accumulated
depreciation</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
(21,045</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
)</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
(14,995</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
)</td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">30,166</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="COLOR: black"> </td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
<td style="TEXT-ALIGN: right; COLOR: black">32,051</td>
<td style="TEXT-ALIGN: left; COLOR: black"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt">Construction-in-progress</td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
3,325</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
<td style="PADDING-BOTTOM: 1pt; COLOR: black"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; COLOR: black">
 </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; COLOR: black">
1,578</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; COLOR: black">
 </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
33,491</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
<td style="PADDING-BOTTOM: 2.5pt"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right">
33,629</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td>
</tr>
</table>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"><b>2.
Private Placement</b></p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">On
February 16, 2012, the Company entered into a Purchase Agreement
(the “Purchase Agreement”) by and among Vitacost, JHH
Capital, LLC, an entity affiliated with Jeffrey Horowitz, our Chief
Executive Officer (“JHH”), Great Hill Equity Partners
III, L.P. (“Great Hill III”), Great Hill Equity
Partners IV, L.P. (“Great Hill IV”), Great Hill
Investors, LLC (“Great Hill Investors”), Freshford
Partners, LP (“Freshford Partners”), Freshford Master
Fund, Ltd (“Freshford Master Fund”) and Baron Small Cap
Fund (“Baron” and, together with JHH, Great Hill III,
Great Hill IV, Great Hill Investors, Freshford Partners, Freshford
Master Fund, collectively, the “Investors”) pursuant to
which the Investors purchased, and Vitacost sold, an aggregate of
4.9 million shares of the Company’s common stock at a
purchase price of $7.04 per share, and warrants to purchase an
aggregate of 1.7 million shares of the Company’s common stock
for an aggregate purchase price of $34.8 million. The warrants have
an exercise price of $7.04 per share and a term of four years. The
net proceeds of $33.6 million, after the deduction of fees of $1.2
million incurred in connection with the transaction, were allocated
between common stock and warrants based on their relative fair
values as of the purchase date.</p>
</div>
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
<i><u>Operating Expenses</u></i>:  </p>
<p style="TEXT-INDENT: 26.9pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
Company’s operating expenses are grouped into three
categories: fulfillment, sales and marketing, and general and
administrative. The following is a brief synopsis of each
category:</p>
<p style="TEXT-INDENT: 15pt; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
   </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
<i>Fulfillment Expenses</i>:</p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
Fulfillment expenses include the costs of warehousing and shipping
supplies, machinery and equipment, maintenance, employees,
professional services and rent.</p>
<p style="TEXT-INDENT: 15.1pt; MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
<i>Sales and Marketing Expenses</i>:</p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
Sales and marketing expenses include online advertising and
promotional expenditures, including third-party content license
fees, affiliates and partners’ commissions, traditional media
advertising, print expenses and payroll related expenses for
personnel engaged in marketing, sales, customer service, and
website development and maintenance. We expense advertising costs
as incurred.</p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
<i>General and Administrative Expenses: </i></p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif">
General and administrative expenses consist of executive
compensation, information technology expenses, credit card
processing fees, legal fees, professional services, employee
expenses and general corporate expenses.</p>
</div>
3.62
0.85
0.50
7.89
P8Y1M17D
P2Y4D
P22D
<div style="FONT: 10pt Times New Roman, Times, Serif">
<p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">The
deferred tax amounts mentioned above have been classified on the
accompanying consolidated balance sheets as follows: </p>
<p style="TEXT-ALIGN: center; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif">
 </p>
<table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center">
<tr style="VERTICAL-ALIGN: bottom">
<td style="PADDING-BOTTOM: 1pt"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="VERTICAL-ALIGN: bottom">
<td> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
<td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td>
<td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td>
</tr>
<tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left">Deferred tax liability, net</td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
<td> </td>
<td style="TEXT-ALIGN: left"> </td>
<td style="TEXT-ALIGN: right"> </td>
<td style="TEXT-ALIGN: left"> </td>
</tr>
<tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom">
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 9pt; WIDTH: 64%">
Noncurrent liability</td>
<td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 15%">
350</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%">
 </td>
<td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%">
$</td>
<td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 15%">
574</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%">
 </td>
</tr>
</table>
</div>
P3M
P0Y
3.33
1994
0
P6Y
P7Y
P6Y
P7Y
0.0083
0.540
P3Y
P3Y
P3Y
P3Y
0.0122
0.552
P39Y
P5Y
P39Y
P5Y
P10Y
605000
4920000
-19171000
4262000
1999000
29377000
1384000
1.00
0.50
P10Y
437000
2023-12
5206000
1681000
2391000
-2216000
-0.08
63762000
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-2222000
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-0.13
65891000
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-0.21
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79877000
-0.13
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-0.19
63456000
-0.19
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400000
-5206000
-0.15
82218000
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-5141000
-3566000
-0.13
67414000
-0.13
-3568000
-3184000
-0.09
84992000
-0.09
-3173000
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shares
iso4217:USD
shares
iso4217:USD
pure
vitc:Facility
vitc:Installment