Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

5. Stock-Based Compensation

The Company uses the Black-Scholes option-pricing model for determining the estimated fair value and stock-based compensation for stock-based awards to employees and the board of directors. The assumptions used in the Black-Scholes option-pricing model for the three months ended March 31, 2012 are as follows:

	Three Months Ended March 31,
	2012	2011
Risk free interest rate	0.2% to 1.2%	2.2% to 2.5%
Expected term	5.0 to 6.07 years	5.3 to 6.1 years
Expected volatility	80.6%	72.3% to 89.6%
Expected dividend yield	0.0%	0.0%

The risk-free interest rate assumption was based on the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. The assumed dividend yield was based on the Company's expectation of not paying dividends in the foreseeable future. The weighted average expected term of options was calculated using the simplified method as prescribed by accounting guidance for stock-based compensation. This decision was based on the lack of relevant historical data due to the Company's limited historical experience. In addition, due to the Company's limited historical data, the estimated volatility was calculated based upon the historical volatility of comparable companies whose share prices have been publicly available for a sufficient period of time.

The Company recognized stock-based compensation expense as follows (in thousands):

	Three Months Ended March 31,
	2012		2011
Cost of sales	$	29	$	39
Research and development		195		145
Selling, general and administrative		1,032		767
Total	$	1,256	$	951

As of March 31, 2012, there was approximately $8,637,565 of total unrecognized compensation costs related to outstanding options, which is expected to be recognized over a weighted average period of 2.68 years.