SHARE-BASED COMPENSATION - Note 6

6 Months Ended

Jun. 30, 2017

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:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
(in thousands)		2017		2016		2017		2016
Cost of product revenue	$	10	$	10	$	19	$	20
Research and development expense		158		102		263		185
Sales, marketing, general and administrative expense		225		262		421		469
	$	393	$	374	$	703	$	674

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 June 30, 2017:

				Weighted-
			Weighted-	Average
			Average	Remaining		Aggregate
			Exercise	Contractual		Intrinsic
Options	Shares		Price	Term (years)		Value
Outstanding as of June 30, 2017	5,244,000	$	2.91	7.7	$	1,294,000
Exercisable as of June 30, 2017	2,514,000	$	3.96	6.2	$	400,000

As of June 30, 2017, our unamortized share-based employee compensation related to stock options was $3.1 million which we plan to amortize over the next 2.9 years, and our unamortized share-based compensation related to RSUs was $110,000 which we plan to amortize over the next 11 months.