Note 7 - Share-based Compensation

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

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

( 7 ) Share-Based Compensation

The share-based compensation expense is recorded in cost of goods sold, research and development, and selling, general and administrative expenses based on the employee's respective function.

No

share-based compensation was capitalized during the periods presented. Share-based compensation expense for the

three

months ended

March 31, 2018

and

2017

was recorded as follows (in thousands):

	Three months ended March 31,
	2018		2017
Cost of goods sold	$	30	$	41
Research and development		197		172
Selling, general and administrative		388		409
Share-based compensation expense	$	615	$	622

The following table summarizes the activity of stock options and related information:

				Weighted
				average
	Number of			exercise
	shares			price
Balance, December 31, 2017		4,213,100		$	2.96
Stock options granted		1,429,075			2.60
Stock options exercised		(2,488	)		1.80
Stock options cancelled		(20,833	)		7.56
Balance, March 31, 2018		5,618,854		$	2.85

The weighted average grant-date fair value of options granted during the

three

months ended

March 31, 2018

was

$1.86

 per share.

Employee Share-Based Compensation (Stock Options)

During the

three

months ended

March 31, 2018,

we granted stock options to certain non-employee directors and employees to purchase

1,429,075

shares of common stock. The fair value of each option grant was estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:  

Risk-free interest rate		2.66%
Volatility		81%
Dividend yield	None
Expected term (in years)		6.25%

Unrecognized share-based compensation for employee options granted through

March 31, 2018

is approximately

$6.7

million to be recognized over a remaining weighted average service period of

3.1

years.

Non-Employee Director

Share-Based Compensation (RSUs)

The following summarizes the activity of non-vested RSUs:

				Weighted
				average
				grant date
	Number of			fair value
	shares			per share
Balance, December 31, 2017		97,996		$	8.71
RSUs granted		—
RSUs vested		(20,444	)		11.04
RSUs forfeited		—
Balance, March 31, 2018		77,552		$	8.09

Unrecognized share-based compensation for employee RSUs granted through

March 31, 2018

is approximately

$441,000

to be recognized over a remaining weighted average service period of

1.7

years.

Nonemployee Share-Based Compensation

During the

three

months ended

March 31, 2018,

we did

not

grant any options to purchase shares of common stock to consultants. Options granted to consultants have been granted in exchange for consulting services to be rendered and vest over the term specified in the grant, which correlates to the period the services are rendered. We recorded approximately

$45,000

and

$233,000

for the

three

months ended

March 31, 2018

and

2017,

respectively, as nonemployee share-based compensation expense.

The Company accounts for share-based compensation arrangements with nonemployees, using the Black-Scholes option pricing model, based on the fair value as these instruments vest. Accordingly, at each reporting date, the Company revalues the unearned portion of the share-based compensation and the resulting change in fair value is recognized in the consolidated statements of operations over the period the related services are rendered. The following assumptions were used to value the awards for the

three

months ended

March 31, 2018:

Risk-free interest rate		2.83%
Volatility		80%
Dividend yield		None
Expected term (in years)	8.4	-	8.8