SHARE BASED COMPENSATION

6 Months Ended

Jun. 30, 2014

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

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

6. SHARE BASED COMPENSATION

The Company accounts for the issuance of equity awards to employees in accordance with ASC Topic 718 and 505, which requires that the cost resulting from all share based payment transactions be recognized in the financial statements. These pronouncements establish fair value as the measurement objective in accounting for share based payment arrangements and requires all companies to apply a fair value based measurement method in accounting for all share based payment transactions with employees.

All stock-based compensation is included in operating expenses for the periods as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Compensation cost recognized:
Selling		0		12,600		0		13,099
General & Administrative		1,029		1,848		1,999		3,162
Research & Development		1,266		3,427		2,582		6,398
	$	2,295	$	17,875	$	4,581	$	22,659

Stock option activity under the 1998, 1999, 2001, 2003 and 2006 Stock Option Plans during the periods indicated below were as follows:

					Weighted-
	Number of		Weighted-		average
	Shares		average		Remaining		Aggregate
	Subject to		Exercise		Contractual		Intrinsic
	Issuance		Price		Term		Value
Outstanding at December 31, 2013		327,486	$	2.31		2.42 years	$	12,100
Granted
Forfeited or expired		(28,000)	$	1.36
Exercised
Outstanding at June 30, 2014		299,486	$	2.40		2.14 years	$	36.300
Exercisable at June 30, 2014		213,736	$	3.19		1.54 years	$	9,075

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on June 30, 2014. This amount changes based upon the fair market value of the Company’s stock.

As of June 30, 2014, there was $21,690 of total unrecognized compensation expense, net of estimated forfeitures, related to all unvested stock options and restricted stock, which is expected to be recognized over a weighted-average period of 3.75 years.

As of June 30, 2014, the Company had 1,714,112 options available for future grants under the Plans.

The Company uses the Black-Scholes option pricing model to value the options. The table below presents the weighted average expected life of the options in years. The expected life computation is based on the time to option expiration. Volatility is determined using changes in historical stock prices. The interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.

No options were granted during the six months ended June 30, 2014.