Equity Instruments and Stock Based Compensation

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 13 : Equity Instruments and Stock Based Compensation

Compensation expense included in the Company’s Consolidated Statements of Income for all stock-based compensation arrangements was as follows:

	2015		2014		2013
Cost of products and services sold	$	-	$	38	$	20
Research and development expenses		1,587		1,027		779
Selling, general and administrative expenses		6,154		1,798		1,230
Total stock-based compensation expense	$	7,741	$	2,863	$	2,029

As of December 31, 2015, the Company expects $13,297 of unrecognized expense related to granted, but nonvested stock-based compensation arrangements to be incurred in future periods. This expense is expected to be recognized over a weighted average period of 1.7 years.

The Company recognized a tax benefit related to stock-based compensation of $1,767 for the year ended December 31, 2015.

Upon exercise of stock options or warrants, or upon the issuance of free share awards, the Company issues new shares.

Determining the Fair Value of Stock Options and Warrants

The Company measures the total fair value of stock options and warrants on the grant date using the Black-Scholes option-pricing model and recognizes each grant's fair value as compensation cost over the period that the option or warrant vests. Options are granted to employees of the Company and generally become exercisable within four years following the grant date and expire ten years after the grant date. Warrants are typically issued to the Company’s Board of Directors as compensation for services rendered and generally become exercisable within one year following the grant date, and expire four years after the grant date.

The weighted-average assumptions under the Black-Scholes option-pricing model for stock option and warrant grants are as follows:  

	2015		2014		2013
Stock Option grants:
Expected term (years)	6.25		6.25		6.25
Expected volatility	58.59	%	59.00	%	58.15	%
Risk-free interest rate	1.89	%	1.79	%	1.66	%
Expected dividend yield	-		-		-
Warrant grants:
Expected term (years)	2.50		2.50		2.50
Expected volatility	55.00	%	58.00	%	54.00	%
Risk-free interest rate	0.89	%	0.75	%	0.47	%
Expected dividend yield	-		-		-

Expected term: The expected term of the options or warrants represents the period of time between the grant date and the time the options or warrants are either exercised or forfeited, including an estimate of future forfeitures for outstanding options or warrants. 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.

Expected volatility: The expected volatility is calculated based on an average of the historical volatility of the Company's stock price for a period approximating the expected term.

Risk-free interest rate: The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and a maturity that approximates the expected term.

Expected dividend yield: The expected dividend yield is based on the Company's authorized periodic dividend and the Company's expectation for dividend yields over the expected term. The Company has not distributed any dividends since its inception, and has no plan to distribute dividends in the foreseeable future.

Stock Options

A summary of the combined stock option activity and other data for the Company's stock option plans for the year ended December 31, 2015 is as follows:

		Wtd. Avg.		Wtd. Avg.
	Number of	Exercise		Remaining	Aggregate
	Stock	Price per		Contractual	Intrinsic
	Options	Share		Life	Value
Stock options outstanding, January 1, 2015	2,498	$	11.45
Granted	934		16.71
Exercised	(708)		8.75
Forfeited	(398)		14.59
Stock options outstanding, December 31, 2015	2,326	$	13.84	8.26 years	$	6,426
Stock options exercisable, December 31, 2015	798	$	10.80	6.12 years	$	4,880

The aggregate intrinsic value of options exercised during the years ended December 31, 2015, 2014 and 2013 was $10,063 and $3,789, respectively. There were no options exercised in 2013.

The weighted average grant date fair value of options granted during the years ended December 31, 2015, 2014 and 2013 was $9.38, $9.19 and $3.36 per share, respectively.

At December 31, 2015, there were 97 shares authorized for stock option grants in subsequent periods. 

Warrants

A summary of the combined warrant activity and other data for the year ended December 31, 2015 is as follows:  

		Wtd. Avg.		Wtd. Avg.
		Exercise		Remaining	Aggregate
	Number of	Price per		Contractual	Intrinsic
	Warrants	Share		Life	Value
Warrants outstanding, January 1, 2015	553	$	10.47
Granted	305		21.67
Exercised	(190)		5.57
Forfeited	-		-
Warrants outstanding, December 31, 2015	668	$	16.97	2.90 years	$	687
Warrants exercisable, December 31, 2015	363	$	13.04	2.41 years	$	687

The aggregate intrinsic value of warrants exercised during the years ended December 31, 2015, 2014 and 2013 was $2,698, $3,107 and $2, respectively.

The weighted average grant date fair value of warrants granted during the years ended December 31, 2015, 2014 and 2013 was $5.92, $3.90 and $1.50 per share, respectively.

At December 31, 2015, an additional 3,300 warrants were outstanding and exercisable relative to consideration paid for the Company’s acquisition of Éclat Pharmaceuticals, LLC on March 13, 2012. These warrants are not considered stock-based compensation and are therefore excluded from the above tables, and instead are addressed within Note 8 - Long-Term Contingent Consideration Payable.

At December 31, 2015, there were 45 shares authorized for warrant grants in subsequent periods.

Free Share Awards

Free share awards represent Company shares issued free of charge to employees of the Company as compensation for services rendered. The Company measures the total fair value of free share awards on the grant date using the Company's stock price at the time of the grant. Free share awards generally cliff vest at the end of a four year vesting period, and are expensed over this vesting period.

A summary of the Company's free share awards as of December 31, 2015, and changes during the year then ended, is reflected in the table below.

	Number of	Wtd. Avg.
	Free Share	Grant Date
	Awards	Fair Value
Nonvested free share awards outstanding, January 1, 2015	402	$	11.29
Granted	-		-
Vested	(151)		7.36
Forfeited	(25)		10.95
Nonvested free shares awards outstanding, December 31, 2015	226	$	13.95

The weighted average grant date fair value of free share awards granted during the years ended December 31, 2014 and 2013 was $16.30 and $7.36, respectively. There were no free share awards granted in 2015.

At December 31, 2015, there were 250 shares authorized for free share award grants in subsequent periods.