SHARE-BASED COMPENSATION

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Note 10. SHARE-BASED COMPENSATION

For share-based awards granted, we have recognized compensation expense based on the estimated grant date fair value method.  For these awards we have recognized compensation expense using a straight-line amortization method and reduced for estimated forfeitures.  The impact on our results of operations of recording share-based compensation for the period ended March 31, 2012 and 2011 was as follows:

	Three Months Ended
	March 31, 2012			March 31, 2011
(in thousands)
Cost of goods sold	$	12		$	9
Research and development		26			8
Selling, general and administrative		93			70
Total share-based compensation	$	131		$	87
Impact on net income per share:
Basic and diluted	$	(0.01	)	$	(0.01	)

The fair value of share-based awards for employee stock options was estimated using the Black-Scholes valuation model.  The following weighted average assumptions were used to calculate the fair value of stock options granted during the three months ended March 31, 2012 and 2011:

	Three Months Ended
	March 31, 2012			March 31, 2011
Risk-free interest rates		0.70	%		1.42	%
Volatility factors		0.52			0.56
Expected life of the option in years		4.00			4.00
Expected dividend yield	None			None

Option grants during the three months ended March 31, 2012 were 15,000.

At March 31, 2012, there remained approximately $1,072,956 of unamortized expected future compensation expense associated with unvested option grants and restricted stock awards, with a remaining weighted average amortization period of 2.47 years.