SHARE-BASED COMPENSATION - Note 6

9 Months Ended

Sep. 30, 2016

Disclosure Of Compensation Related Costs

Share-Based Compensation - Note 6

6. SHARE-BASED COMPENSATION

We issue share-based compensation to employees in the form of stock options and restricted stock units (RSUs). We account for the share-based awards by recognizing the fair value of share-based compensation expense on a straight-line basis over the service period of the award, net of estimated forfeitures. The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model. The fair value of RSUs is determined by the closing price of our common stock on the grant date. Changes in estimated inputs or using other option valuation methods may result in materially different option values and share-based compensation expense.

The following table summarizes the amount of share-based compensation expense by line item in the statements of operations:

Share-based compensation expense		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(in thousands)		2016		2015		2016		2015
Cost of product revenue	$	9	$	7	$	29	$	15
Research and development expense		98		82		283		198
Sales, marketing, general and administrative expense		199		205		668		505
	$	306	$	294	$	980	$	718

Options activity and positions

The following table summarizes shares, weighted-average exercise price, weighted-average remaining contractual term and aggregate intrinsic value of options outstanding and options exercisable as of September 30, 2016:

				Weighted-
			Weighted-	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
Options	Shares		Price	Term (years)		Value
Outstanding as of September 30, 2016	4,087,000	$	3.92	7.6	$	5,000
Exercisable as of September 30, 2016	2,040,000	$	5.60	6.1	$	4,000

As of September 30, 2016, our unamortized share-based employee compensation related to stock options was $2.7 million which we plan to amortize over the next three years, and our unamortized share-based compensation related to RSUs was $78,000 which we plan to amortize over the next eight months.