Share-Based Payments

3 Months Ended

Mar. 31, 2013

Shareholders' Equity and Share-based Payments [Abstract]

Share-Based Compensation

Share-based Compensation

Share-based compensation expense has been recorded as follows:

	Three months ended March 31,
	2013		2012
Cost of goods sold	$	2	$	1
Sales and marketing	15		13
Research and product development	11		7
General and administrative	31		30
	$	59	$	51

As of March 31, 2013, the total remaining unrecognized compensation cost related to non-vested stock options, net of forfeitures, was approximately $493, which will be recognized over a weighted average period of 2.56 years.

During the three months ended March 31, 2013 and 2012, we granted 0 and 30,000 stock options, respectively. We use judgment in determining the fair value of the share-based payments on the date of grant using an option-pricing model with assumptions regarding a number of highly complex and subjective variables.  These variables include the risk-free interest rate of the awards, the expected life of the awards, the expected volatility over the term of the awards, the expected dividends of the awards, and an estimate of the amount of awards that are expected to be forfeited.  We use the Black-Scholes option pricing model to determine the fair value of share-based payments granted under ASC Topic 718.

In applying the Black-Scholes methodology to the options granted, the Company used the following assumptions:

	Three months ended March 31,
	2013	2012
Risk-free interest rate, average	—	1.4%
Expected option life, average	—	7.1 years
Expected price volatility, average	—	51.9%
Weighted average per share fair value	—	$3.35