SHARE-BASED COMPENSATION

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements

SHARE-BASED COMPENSATION

The impact on our results of operations of recording share-based compensation for the three and nine months ended September 30, 2011 and September 30, 2010, respectively, are as follows:

	Three Months Ended						Nine Months Ended
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010
(in thousands)
Cost of goods sold	$	12		$	11		$	33		$	24
Research and development		26			3			58			21
Selling, general and administrative		97			60			253			187
Total share-based compensation	$	135		$	74		$	344		$	232
Impact on net income per share:
Basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.04	)	$	(0.03	)

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 and nine months ended September 30, 2011 and 2010:

	Three Months Ended						Nine Months Ended
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010
Risk-free interest rates		1.39	%		1.08	%		0.66	%		1.80	%
Volatility factors		0.55			0.56			0.54			0.56
Expected life of the option in years		4.00			4.00			4.00			4.00
Expected dividend yield		None			None			None			None

Option grants during the nine months ended September 30, 2011 were 323,500.

At September 30, 2011, there remained approximately $1,320,923 of unamortized expected future compensation expense associated with unvested option grants and restricted stock awards, with a remaining weighted average amortization period of 2.85 years.