Note 7 - Stockholders' Equity and Stock-based Compensation Expense

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

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

Note 7. Stockholders’ Equity and Stock-based Compensation Expense

Share Repurchase Program

On February 8, 2016, the Company announced that its Board of Directors approved the expansion of its Stock Repurchase Program by $10 million, under which the Company is authorized to repurchase shares of its common stock.

In the three months ended June 3

0, 2016, the Company repurchased 250,805 shares of its common stock for approximately $2.6 million

. In the six months ended June 3

0, 2016, the Company repurchased 278,818 shares of its common stock for approximately $2.9 million

. As of June 30, 2016, there remained an additional $7.1 million available in the Stock Repurchase Program to repurchase shares of common stock. All shares repurchased were retired and returned to authorized but unissued status.

Stock-based Compensation Expense

Stock-based compensation expense by department recognized during the three and six months ended June 30, 2016 and 2015 were as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Cost of revenue	$	40	$	114	$	181	$	217
Sales and marketing		229		231		605		416
Research and development		105		180		285		362
General and administrative		376		457		1,011		948
Total stock-based compensation expense	$	750	$	982	$	2,082	$	1,943

Activity under the Company’s 2004 Equity Incentive Plan, as amended, is summarized as follows:

				Options Outstanding
	Shares Available for Grant			Number of Stock Options Outstanding			Weighted- Average Exercise Price
Balance, December 31, 2015		1,263,425			2,148,797		$	9.31
Options granted		(93,000	)		93,000			11.54
Stock awards granted ( 1) (2)		(925,675	)		—			—
Options exercised		—			(292,934	)		8.70
Options canceled		107,620			(107,620	)		13.37
Stock awards canceled ( 1)		206,541			—			—
Balance, June 30, 2016		558,911			1,841,243		$	9.28

(1) The Company has a “fungible share” provision in its 2004 Equity Incentive Plan whereby for each full-value award (RSU/PSU) issued or canceled under the Plan, results in a requirement to subtract / add back 2.12 shares from / to the Shares Available for Grant.

(2) Included in 'Stock awards granted' of 925,675 , was 416,474 fungible shares relating to 196,450 of PSUs granted. These PSUs will result in a higher or lower number of shares of common stock that may be released on March 15, 201 7 , based on the achievement of three performance goals at targets that were pre-determined by the Board and disclosed in a Form 8-K on February 8 , 201 6 .

Under the 2004 Equity Incentive Plan, as amended, the Company issued 306,237 shares and 450,549 shares of common stock during the three and six months ended June 30, 2016

, respectively, in conjunction with stock options exercised and the vesting of RSUs and PSUs

.

As of June 30, 2016, there was approximately $4.8 million of unrecognized compensation expense, net of projected forfeitures, related to non-vested equity awards. The expense is expected to be recognized over the remaining weighted-average period of 1.94 years. The actual expense recorded in the future may be higher or lower based on a number of factors, including, actual forfeitures experienced and the degree of achievement of the performance goals related to the PSUs granted.