Note 8 - Stock-based Compensation

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

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

(8) STOCK-BASED COMPENSATION

As of September 30, 2016, we have unvested restricted stock awards and stock options granted under employee stock-based compensation plans that are described more fully in Note 12 to the consolidated financial statements in our 2015 Form 10-K.

As of September 30, 2016, total unrecognized compensation expense related to unvested restricted stock awards and stock options was $362. The weighted average period over which this expense is expected to be recognized is 2.5 years. The following table shows the allocation of the compensation expense we recorded during the three and nine months ended September 30, 2016 and 2015, respectively, related to stock-based compensation:

	Three Months Ended Sept. 30,				Nine Months Ended Sept. 30,
	2016		2015		2016		2015
Cost of revenues	$	2	$	3	$	7	$	8
Selling expense		1		1		4		4
Engineering and product development expense		3		2		8		7
General and administrative expense		38		24		203		72
	$	44	$	30	$	222	$	91

There was no compensation expense capitalized in the nine months ended September 30, 2016 or 2015.

Restricted Stock Awards

We record compensation expense for restricted stock awards based on the quoted market price of our stock at the grant date and amortize the expense over the vesting period. Restricted stock awards generally vest over four years. However, during January 2016, we granted 22,500 shares of restricted stock to three of our independent directors which vested 100% upon the re-election of these directors at our annual meeting of stockholders, which took place on June 29, 2016. The total compensation expense related to these shares was $98, and it was all recorded upon the re-election of these directors.

The following table summarizes the activity related to unvested shares of restricted stock for the nine months ended September 30, 2016:

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested shares outstanding, January 1, 2016		63,750		$	3.64
Granted		86,400			4.27
Vested		(35,625	)		3.92
Forfeited		-			-
Unvested shares outstanding, September 30, 2016		114,525			4.03

The total fair value of the shares that vested during the nine months ended September 30, 2016 and 2015 was $138 and $59, respectively, as of the vesting dates of these shares.

Stock Options

We record compensation expense for stock options based on the fair market value of the options as of the grant date. No option may be granted with an exercise period in excess of ten years from the date of grant. Generally, stock options will be granted with an exercise price equal to the fair market value of our stock on the date of grant and will vest over four years.

The fair value for stock options granted during the nine months ended September 30, 2016 was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

Risk-free interest rate	1.30	%
Dividend yield	0.00	%
Expected common stock market price volatility factor	.40
Weighted average expected life of stock options (years)	4

The per share weighted average fair value of stock options issued during the nine months ended September 30, 2016 was $1.43.

The following table summarizes the activity related to stock options for the nine months ended September 30, 2016:

	Number of Shares		Weighted Average Grant Date Fair Value
Options outstanding, January 1, 2016 (none exercisable)		-	$	-
Granted		19,800		4.37
Vested		-		-
Forfeited		-		-
Options outstanding, September 30, 2016 (none exercisable)		19,800		4.37