Note 9 - Stock-based Compensation

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

( 9 ) STOCK-BASED COMPENSATION

As of

March 31, 2019,

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

14

to the consolidated financial statements in our

2018

Form

10

-K.

As of

March 31, 2019,

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

$2,055.

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

3.2

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

three

months ended

March 31, 2019

and

2018,

respectively, related to stock-based compensation:

	Three Months Ended March 31,
	201 9		201 8
Cost of revenues	$	-	$	-
Selling expense		-		-
Engineering and product development expense		3		1
General and administrative expense		180		120
	$	183	$	121

There was

no

stock-based compensation expense capitalized in the

three

months ended

March 31, 2019

or

2018.

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 for employees and over

one

year for our independent directors. In

March 2019

and

2018,

we granted

36,000

and

32,000

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

$257

and

$270,

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, 2019:

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested shares outstanding, January 1, 2019		114,750		$	6.92
Granted		80,300			7.13
Vested		(34,000	)		6.82
Forfeited		-			-
Unvested shares outstanding, March 31, 2019		161,050			7.04

The total fair value of the shares that vested during the

three

months ended

March 31, 2019

and

2018

was

$239

and

$169,

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, 2019

and

2018

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

	201 9			201 8
Risk-free interest rate		2.49	%		2.70	%
Dividend yield		0.00	%		0.00	%
Expected common stock market price volatility factor		.41			.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, 2019

and

2018

was

$3.13

and

$3.61,

respectively.

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

three

months ended

March 31, 2019:

	Number of Shares		Weighted Average Grant Date Fair Value
Options outstanding, January 1, 2019 (21,800 exercisable)		264,400	$	7.54
Granted		132,600		7.13
Exercised		-		-
Forfeited		-		-
Options outstanding, March 31, 2019 (75,625 exercisable)		397,000		7.40