STOCK-BASED COMPENSATION

6 Months Ended

Jun. 28, 2014

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

The fair value of non-vested restricted common stock awards is generally the market value of the Company’s common stock on the date of grant. The non-vested common stock awards require the employee to fulfill certain obligations, including remaining employed by the Company for one, two or four years (the vesting period) and in certain cases also require meeting either performance criteria or the Company’s stock achieving a certain price. For non-vested restricted common stock awards which solely require the recipient to remain employed with the Company, the stock compensation expense is amortized over the anticipated service period. For non-vested restricted common stock awards which require the achievement of performance criteria, the Company reviews the probability of achieving the performance goals on a periodic basis. If the Company determines that it is probable that the performance criteria will be achieved, the amount of compensation cost derived for the performance goal is amortized over the anticipated service period. If the performance criteria are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. The Company recognizes compensation costs on a straight-line basis over the requisite service period for time-vested awards.

During the six months ended June 28, 2014, the 2010 Equity Plan was amended to increase the number of authorized shares by 1.9 million.

A summary of award activity under the stock option plans as of June 28, 2014 and changes during the six month period then ended is as follows (all options were vested as of June 28, 2014):



	Six Months Ended June 28, 2014
	Shares		Weighted Average Exercise Price
Balance, December 28, 2013	558,850		$	5.09
Options forfeited/canceled	(125,000	)	5.00
Options exercised	(34,250	)	3.75
Balance, all exercisable, June 28, 2014	399,600		$	5.24

The following table summarizes information about stock options outstanding and exercisable at June 28, 2014:



	Options Outstanding and Exercisable
Range of Exercise Prices	Number Outstanding and Exercisable		Weighted Average Exercise Price
$ 3.15—$ 3.50	130,000		$	3.49
$ 3.75—$ 5.00	169,600		3.77
$10.00	100,000		10.00
	399,600		$	5.24
Aggregate intrinsic value on June 28, 2014	$	900

The weighted average remaining contractual life of the outstanding options is less than one year. The Company has issued warrants to purchase 200,000 shares of the Company’s common stock for $3.49 per share.

Non-Vested Restricted Common Stock

A summary of the activity for non-vested restricted common stock awards as of June 28, 2014 and changes during the six month period then ended is presented below:



	Shares		Weighted Average Grant Fair Value
Balance, December 28, 2013	2,974,148		$	4.25
Granted	527,000		4.09
Forfeited	—		—
Vested	(118,000	)	3.84
Balance, June 28, 2014	3,383,148		$	4.24

Included within the non-vested restricted common stock table above is 50,000 awards granted for which the performance conditions have yet to be determined and therefore a grant date has not yet been established for the award. No stock based compensation expense has been recorded relating to this award during the three and six month period ended June 28, 2014.

Stock-Based Compensation

The following table summarizes stock-based compensation expense within each of the categories below as it relates to non-vested restricted common stock awards for the six months ended June 28, 2014 and June 29, 2013 (no tax benefits were recognized):



	Six Months Ended
	June 28, 2014		June 29, 2013
Cost of component revenues	$	472,213	$	118,692
Research and development	637,528		125,774
Selling, general and administrative	1,252,705		2,175,062
Total	$	2,362,446	$	2,419,528

Unrecognized compensation expense for non-vested restricted common stock as of June 28, 2014 totaled $5.6 million and is expected to be recognized over a weighted average period of 2 years.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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