Note 10 - Stock-based Compensation

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

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

( 10 )    STOCK-BASED COMPENSATION

As of

March 31, 2018,

we have unvested restricted stock awards and stock options granted under stock-based compensation plans that are described more fully in Note

13

to the consolidated financial statements in our

2017

Form

10

-K.

As of

March 31, 2018,

total unrecognized compensation expense related to unvested restricted stock awards and stock options was

$1,511.

The weighted average period over which this expense is expected to be recognized is

3.3

years. The following table shows the allocation of the compensation expense we recorded during the

three

months ended

March 31, 2018

and

2017,

respectively, related to stock-based compensation:

	Three Months Ended March 31,
	2018		2017
Cost of revenues	$	-	$	3
Selling expense		-		-
Engineering and product development expense		1		3
General and administrative expense		120		82
	$	121	$	88

There was

no

stock-based compensation expense capitalized in the

three

months ended

March 31, 2018

or

2017.

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, in

March 2018

and

2017,

we granted

32,000

and

22,500

shares of restricted stock, respectively, to our independent directors. These shares vest

25%

at each of

March 31,

June 30,

September 30,

and

December 31

of the year in which they were granted. The total compensation expense related to these shares is

$270

and

$143,

respectively, and is recorded as the shares vest.

The following table summarizes the activity related to unvested shares of restricted stock for the

three

months ended

March 31, 2018:

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested shares outstanding, January 1, 2018		75,225		$	5.29
Granted		79,200			8.45
Vested		(21,200	)		6.92
Forfeited		-			-
Unvested shares outstanding, March 31, 2018		133,225			6.99

The total fair value of the shares that vested during the

three

months ended

March 31, 2018

and

2017

was

$169

and

$105,

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

three

months ended

March 31, 2018

and

2017

was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

	201 8			201 7
Risk-free interest rate		2.70	%		2.14	%
Dividend yield		0.00	%		0.00	%
Expected common stock market price volatility factor		.39			.39
Weighted average expected life of stock options (years)		6.25			6.25

The per share weighted average fair value of stock options issued during the

three

months ended

March 31, 2018

and

2017

was

$3.61

and

$2.64,

respectively.

The following table summarizes the activity related to stock options for the

three

months ended

March 31, 2018:

	Number of Shares		Weighted Average Grant Date Fair Value
Options outstanding, January 1, 2018 (4,950 exercisable)		76,400	$	5.98
Granted		140,700		8.45
Exercised		-		-
Forfeited		-		-
Options outstanding, March 31, 2018 (22,700 exercisable)		217,100		7.58