SHARE-BASED COMPENSATION - Note 6

3 Months Ended

Mar. 31, 2015

Disclosure Of Compensation Related Costs

Share-Based Compensation - Note 6

6. SHARE-BASED COMPENSATION

We use the straight-line attribution method to allocate the fair value of share-based compensation expense over the requisite service period of the related award. The value of restricted or unrestricted shares is determined using the fair value method, which is based on the number of shares granted and the closing price of our common stock on the NASDAQ Global Market on the date of grant. The value of options is determined using the Black-Scholes option pricing model with estimates of option lives, stock price volatility and interest rates, then expensed over the periods of service allowing for pre-vest forfeitures. Changes in the estimated inputs or using other option valuation methods could result in materially different option values and share-based compensation expense. The following table shows the amount of share-based compensation expense included in each line item of the consolidated statements of operations for each period shown:

		Three Months Ended
Share-based compensation		March 31,
		2015		2014
Cost of product revenue	$	4,000	$	-
Research and development expense		47,000		114,000
Sales, marketing, general and administrative expense		139,000		191,000
Total share-based compensation expense	$	190,000	$	305,000

Options Activity and Positions

The following table summarizes shares, weighted average exercise price, weighted average remaining contractual term and aggregate intrinsic value of options outstanding and options exercisable as of March 31, 2015:

				Weighted
				Average
			Weighted	Remaining
			Average	Contractual		Aggregate
			Exercise	Term		Intrinsic
Options	Shares		Price	(years)		Value
Outstanding as of March 31, 2015	2,434,000	$	6.69	7.2	$	2,723,000
Exercisable as of March 31, 2015	1,254,000	$	11.08	5.7	$	1,019,000

As of March 31, 2015, our unamortized share-based employee compensation related to stock options was $1.2 million which we plan to amortize over the next 2.4 years and our unamortized share-based compensation related to the restricted stock units was $20,000 which we plan to amortize over the next 0.2 years.