Stock-Based Compensation

9 Months Ended

Sep. 30, 2014

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

Stock-Based Compensation

5. Stock-Based Compensation

Stock Plans

During the nine months ended September 30, 2014, the Company granted options to purchase 45,000 shares of common stock and 1.6 million shares of restricted stock, with a total value of $2.9 million. This cost will be amortized ratably over a period of 12 to 48 months.

As of September 30, 2014 there were 2.0 million shares available for future grants under the 2005 Plan.

Employee Stock Purchase Plan

The Company’s most recent six-month offering period ended September 30, 2014 and resulted in 14,000 shares being purchased/granted at a fair value of $0.83 per share.

Stock Compensation

The Company accounts for all stock-based payment awards made to employees and directors based on their fair values and recognized as compensation expense over the vesting period using the straight-line method over the requisite service period for each award as required by FASB ASC Topic No. 718, Compensation-Stock Compensation. Restricted stock is valued using the closing stock price on the date of the grant. Options are valued using a Black-Scholes valuation model.

Stock-based non-cash compensation expenses related to stock options, restricted stock grants and the employee stock purchase plan were recorded in the financial statements as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(unaudited)				(unaudited)
Cost of revenues	$	2	$	6	$	10	$	17
Selling and marketing		63		138		201		698
Research and development		160		205		491		622
General and administrative		307		472		1,120		1,410
Restructuring expense		—		—		1,273		—
Total non-cash stock compensation expense	$	532	$	821	$	3,095	$	2,747

Total share-based compensation for each quarter included cash payments of income taxes related to grants of restricted stock which was de minimis for both of the three month periods ended September 30, 2014 and 2013, respectively. The cash payments of income taxes related to grants of restricted stock totaled $0.1 million and $0.3 million for the nine month periods ended September 30, 2014 and 2013, respectively.