SHARE-BASED COMPENSATION - Note 6

9 Months Ended

Sep. 30, 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				Nine Months Ended
		September 30,				September 30,
(in thousands)		2015		2014		2015		2014
Cost of product revenue	$	7	$	-	$	15	$	-
Cost of contract revenue		-		27		-		27
Research and development expense		82		36		198		23
Sales, marketing, general and administrative expense		205		148		505		667
Total share-based compensation expense	$	294	$	211	$	718	$	717

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 September 30, 2015:

				Weighted-
			Weighted-	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
	Shares		Price	Term (years)		Value
Outstanding as of September 30, 2015	3,180,000	$	5.53	7.5	$	2,259,000
Exercisable as of September 30, 2015	1,595,000	$	8.43	6.0	$	1,274,000

As of September 30, 2015, our unamortized share-based employee compensation related to stock options was $2.6 million which we plan to amortize over the next 3.1 years and our unamortized share-based compensation related to the restricted stock units was $135,000 which we plan to amortize over the next 8 months.