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Stock based compensation
 12 Months Ended
Dec. 31, 2012
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

6. Stock based compensation:

 

6.1 ASC 718

 

The Company applies the provisions of ASC 718 in accounting for its stock based compensation. The fair value of each option and warrant granted during the year is estimated on the date of grant using the Black-Scholes option pricing model. Option valuation models require the input of subjective assumptions and these assumptions can vary over time. The weighted-average assumptions on grants made in each of the following years were:

 

    Year Ended December 31  
    2010     2011     2012  
                   
Weighted-average expected life (years)     4.56       4.00       5.70  
Expected volatility rate     60.5 %     63.6 %     62.5 %
Expected dividend yield     -       -       -  
Risk-free interest rate     1.43 %     0.83 %     0.95 %
Forfeiture rate     -       -       -  

 

We base our determination of expected volatility predominantly on the implied volatility of our traded options with consideration of our historical volatilities. Given the limited historical data and the grant of stock options and warrants to a limited population, the simplified method has been used to calculate the expected life.

 

Stock based compensation expense recognized was as follows:

 

(In thousands of U.S dollars except per share
data)		   Options     Free of charge share
awards		     Warrants     Total  
    2010     2011     2012     2010     2011     2012     2010     2011     2012     2010     2011     2012  
Research and development     400       332       419       831       897       649       -       -       -       1,231       1,229       1,068  
Cost of goods sold     9       3       2       113       89       46       -       -       -       122       91       49  
Selling, general and administrative     615       461       1,280       677       671       464       525       327       179       1,817       1,459       1,923  
                                                                                                 
Total stock-based compensation expense     1,024       796       1,701       1,621       1,657       1,160       525       327       179       3,170       2,779       3,040  
                                                                                                 
Effect on earnings per share                                                                                                
Basic     0.04       0.03       0.07       0.07       0.07       0.05       0.02       0.01       0.01       0.13       0.11       0.12  
                                                                                                 
Diluted     0.04       0.03       0.07       0.07       0.07       0.05       0.02       0.01       0.01       0.13       0.11       0.12  

 

As of December 31, 2012, the projected compensation expense related to non vested options or warrants amounted to $2,158,000 and is expected to be recognized over a weighted average period of 1.36 years.

 

6.2 Warrants

 

The summary of warrants activity is as follows:

 

    Warrants 
Outstanding		     Weighted Average
Exercise Price in
U.S dollars [1]		     Weighted Average
Exercise Price in
Euros		  
Balance at January 1, 2010     630,500     $ 11.73     € 8.24  
Warrants granted     250,000     $ 6.97     € 5.44  
Warrants cancelled     130,500     $ 25.11     € 18.62  
Balance at December 31, 2010     750,000     $ 7.82     € 5.50  
Warrants granted     300,000     $ 5.03     € 3.54  
Warrants cancelled     150,000     $ 6.94     € 4.98  
Balance at December 31, 2011     900,000     $ 6.89     € 4.85  
Warrants granted     3,300,000     $ 8.63     € 6.61  
Warrants reintegrated     100,000     $ 6.65     € 4.97  
Warrants cancelled     200,000     $ 10.20     € 6.57  
Balance at December 31, 2012     4,100,000     $ 6.89     € 4.85  

 

[1] Historical exchange rate at date of grant

 

No warrants were exercised in 2010, 2011 and 2012.

 

Exercise prices and intrinsic value for warrants outstanding as of December 31, 2012 were as follows: 

 

    Warrants Outstanding     Warrants Exercisable  
Range of
exercise
prices in
euros		   Number
of shares		     Weighted
average
remaining
contractual
life		     Weighted
average
exercise
price in
euros		     Weighted
average
intrinsic
value in
euros		     Number
of shares		     Weighted
average
exercise
price in
euros		     Weighted average
intrinsic value in
euros		  
                                                         
0  to 4.50     550,000       1.57       3.98       -       550,000       3.98       -  
5.44 to  to 6.57     2,450,000       4.82       5.67       -       2,450,000       5.67       -  
6.58 to 8.52     1,100,000       5.20       8.42       -       1,100,000       8.42       -  
      4,100,000       4.48       6.10               4,100,000       6.44       -  

  

The total fair value of warrants vested during 2010 amounted to €472,000 or $626,000 (average exchange rate of the year).

 

The total fair value of warrants vested during 2011 amounted to €257,000or $358,000 (average exchange rate of the year).

 

The total fair value of warrants vested during 2012 amounted to €271,000or $348,000 (average exchange rate of the year).

 

Intrinsic value represents the variance between the share price and the exercise price. As of December 31, 2012 the aggregate intrinsic value of warrants outstanding amounted to zero.

 

6.3 Stock Options

 

The activity under the option plans is as follows:

 

    Shares Available
for Grant		     Options Granted
and Outstanding		     Weighted Average
Exercise Price in
U.S dollars[1]		     Weighted Average
Exercise Price in
Euros		  
Balance at January 1, 2010     45,000       3,110,990     $ 14.96     € 12.08  
Options authorized     750,000       -       -       -  
Granted     (305,000 )     305,000     $ 6.91     € 5.21  
Exercised     -       (63,000 )   $ 4.01     € 5.75  
Forfeited     (15,000 )     (254,500 )   $ 8.51     € 7.65  
Balance at December 31, 2010     475,000       3,098,490     $ 14.69     € 11.71  
Options authorized                                
Granted     (200,000 )     200,000     $ 4.39     € 3.28  
Exercised     -       (44,200 )   $ 1.48     € 1.63  
Forfeited     -       (113,300 )   $ 8.93     € 7.49  
Balance at December 31, 2011     275,000       3,140,990     $ 14.65     € 11.66  
Options authorized     1,000,000       -       -       -  
Granted     (550,000 )     550,000     $ 5.97     € 4.67  
Exercised     -       (195,000 )   $ 2.04     € 2.33  
Forfeited     10,000       (223,500 )   $ 16.88     € 13.69  
Balance at December 31, 2012     735,000       3,272,490     $ 13.79     € 10.90  

 

[1] Historical exchange rate at date of grant

  

The total intrinsic value of options exercised during 2010 amounted to €174,000 or $256,000 (historical exchange rate at date of exercise).

 

The total intrinsic value of options exercised during 2011 amounted to €111,000 or $149,000 (historical exchange rate at date of exercise).

 

The total intrinsic value of options exercised during 2012 amounted to €735,000 or $973,000 (historical exchange rate at date of exercise).

 

Stock options outstanding at December 31, 2012, which expire from 2013 to 2022, had exercise prices ranging from €3.28 to € 25.39. The weighted average remaining contractual life of all options is 4.34 years. As of December 31, 2012, there were 3,272,490 outstanding options at a weighted average exercise price of €10.90, of which 2,476,240 were exercisable at a weighted average price of €12.97. Exercise prices and intrinsic value for options outstanding as of December 31, 2012 were as follows:

 

    Stock Options Outstanding     Stock Options Exercisable  
Range of
exercise prices 
in euros		   Number
of shares		     Weighted
average
remaining
contractual
life		     Weighted
average
exercise
price in euros		     Weighted
average
intrinsic
value in
euros		     Number of
shares		     Weighted average
exercise price in
euros		     Weighted
average
intrinsic
value in euros		  
                                           
0  to 3.28     195,000       8.45       3.28       -       48,750       3.28       -  
4.03 to 5.44     1,385,000       7.04       4.73       -       735,000       4.74       -  
 6.40 to 12.02     123,500       1.62       10.93       -       123,500       10.93       -  
 12.86 to 16.23     1,040,990       2.60       14.46       -       1,040,990       14.46       -  
 19.2 to 25.39     528,000       2.58       22.85       -       528,000       22.85       -  
                                                         
      3,272,490       4.34       10.90       0.00       2,476,240       12.97       0.00  

 

The total fair value of options vested during 2010 amounted to €1,424,000 or $1,889,000 (average exchange rate of the year).

 

The total fair value of options vested during 2011 amounted to €473,000 or $659,000 (average exchange rate of the year).

 

The total fair value of options vested during 2012 amounted to €846,000 or $1,088,000 (average exchange rate of the year).

 

The aggregate intrinsic value of options outstanding or exercisable amounted to zero.

 

6.4 Free share award

 

The activity under the free share award plans is as follows:

 

    Free of Charge
Share Award
Available for Grant		     Free of Charge
Share Award
Granted and
Outstanding		     Weighted Average
Fair Value at grant
date in U.S
dollars[1]		     Weighted Average
Fair Value at grant
date in Euros		  
                         
Balance at January 1, 2010     10,650       573,350     $ 6.68     € 4.73  
Options authorized     200,000       -       -       -  
Granted     (230,000 )     230,000     $ 7.01     € 5.29  
Exercised     -       (240,050 )   $ 5.91     € 4.39  
Forfeited     37,500       (37,500 )   $ 5.93     € 4.39  
Cancelled     3,300       (3,300 )   $ 5.17     € 4.03  
Balance at December 31, 2010     18,150       522,500     $ 7.25     € 5.16  
Options authorized     200,000       -       -       -  
Granted     (200,000 )     200,000     $ 4.39     € 3.28  
Exercised     -       (272,400 )   $ 7.47     € 5.07  
Forfeited     8,450       (8,450 )   $ 7.22     € 5.18  
Cancelled     1,000       (1,000 )   $ 7.45     € 5.06  
Balance at December 31, 2011     26,600       440,650     $ 5.81     € 4.36  
Options authorized     200,000       -       -       -  
Granted     (189,700 )     189,700     $ 3.07     € 2.38  
Exercised     -       (258,150 )   $ 6.52     € 4.92  
Forfeited     21,550       (21,550 )   $ 5.79     € 4.35  
Balance at December 31, 2012     58,450       350,650     $ 3.81     € 2.88  

 

[1] Historical exchange rate at date of grant

 

As of December 31, 2010 the total fair value (or intrinsic value) of Free Share Award outstanding amounted to €2,697,000 or $3,745,000 (historical exchange rate at date of grant).

 

As of December 31, 2011 the total fair value (or intrinsic value) of Free Share Award outstanding amounted to €1,774,000 or $2,296,000 (historical exchange rate at date of grant).

 

As of December 31, 2012 the total fair value (or intrinsic value) of Free Share Award outstanding amounted to €1,009,000 or $1,336,000 (historical exchange rate at date of grant).