Capital Stock | 9 Months Ended |
Sep. 30, 2013 |
Capital Stock Disclosure [Abstract] | ' |
Capital Stock Disclosure [Text Block] | ' |
10. Capital Stock |
Employee Stock Purchase Plan, as amended (“ESPP”) |
Under the ESPP, which was approved in 2000, participating employees can authorize the Company to withhold a portion of their base pay during consecutive six-month payment periods for the purchase of shares of the Company's common stock. At the conclusion of the period, participating employees can purchase shares of the Company's common stock at 85% of the lower of the fair market value of the Company's common stock at the beginning or end of the period. Shares are issued under the plan for the six-month periods ending June 30 and December 31. On May 23, 2013, the stockholders of the Company approved an increase in the number of shares available for issuance under the ESPP by 250,000 shares of common stock. Following such amendment, as of September 30, 2013, 750,000 shares of common stock were authorized for issuance under the ESPP, of which 497,708 shares were issued. During the nine months ended September 30, 2013, the Company issued 27,305 shares of the Company's common stock under the ESPP. During the nine months ended September 30, 2012, the Company issued 25,597 shares of the Company's common stock under the ESPP. There were no shares issued under the ESPP during the three months ended September 30, 2013 and 2012. |
Third Amended and Restated 2000 Stock Option and Incentive Plan, as amended (“2000 Plan”) |
The Company accounts for share-based payment awards in accordance with the provisions of FASB ASC 718 “Compensation- Stock Compensation”, which requires the Company to recognize compensation expense for all share-based payment awards made to employees and directors including stock options, deferred stock awards in the form of restricted stock units (“RSUs”) and employee stock purchases related to the ESPP. |
On May 23, 2013, the Board of Directors approved the grant, to be issued on May 31, 2013, of 124,277 RSUs and 826,388 stock options under the 2000 Plan. The RSUs were valued at the closing stock price on the date of grant. The Company utilized the Black-Scholes valuation model for estimating the fair value of the stock-based compensation. |
|
Stock option and RSU activity under the 2000 Plan for the nine months ended September 30, 2013 was as follows: |
| | | | | Stock Options | | Restricted Stock Units |
| | | | | | | | Weighted | | | | | |
| | | | | Stock | | | Average | | Restricted | | | |
| | | Available | | Options | | | Exercise | | Stock Units | | | Grant Date |
| | | for Grant | | Outstanding | | | Price | | Outstanding | | | Fair Value |
| | | | | | | | | | | | | |
Balance at December 31, 2012 | | 1,972,956 | | 8,078,509 | | $ | 4.25 | | 677,193 | | $ | 3.97 |
| Granted | | -950,665 | | 826,388 | | | 5.08 | | 124,277 | | | 5.08 |
| Fungible share adjustment for RSUs granted | | -98,182 | | | | | | | - | | | - |
| Exercised | | - | | -1,924,264 | | | 5.47 | | - | | | - |
| Vested (RSUs) | | - | | - | | | - | | -233,530 | | | |
| Shares withheld for taxes | | 24,169 | | - | | | - | | - | | | - |
| Cancelled / forfeited | | 1,059,544 | | -920,489 | | | 5.73 | | -139,055 | | | 3.98 |
| Fungible share adjustment for RSUs cancelled | | 83,467 | | - | | | - | | - | | | - |
Balance at September 30, 2013 | | 2,091,289 | | 6,060,144 | | $ | 4.37 | | 428,885 | | $ | 4.29 |
The following assumptions were used to estimate the fair value of stock options granted during the nine months ended September 30, 2013 and 2012: |
| Nine Months Ended | | | | | | | | | |
| September 30, | | | | | | | | | |
| 2013 | | | 2012 | | | | | | | | | |
Volatility | 57.2 | % | | 55.09 | % | | | | | | | | |
Risk-free interest rate | 1.18 | % | | 0.8 | % | | | | | | | | |
Expected holding period (in years) | 5.64 | | | 5.98 | | | | | | | | | |
Dividend Yield | 0 | % | | 0 | % | | | | | | | | |
| | | | | | | | | | | | | |
There were no stock options or RSU's granted during the three months ended September 30, 2013 and 2012. |
The weighted average fair values of the options granted under the 2000 Plan during the nine months ended September 30, 2013 was $2.64, using the Black Scholes option-pricing model. |
The Company used historical volatility to estimate the expected stock price volatility assumption. Historical volatility was determined by calculating the mean reversion of the daily-adjusted closing stock price. The risk-free interest rate assumption is based upon observed U.S. Treasury bill interest rates (risk free) appropriate for the term of the Company's employee stock options. The expected holding period of employee stock options represents the period of time options are expected to be outstanding and is based on historical experience. The vesting period is between one and four years. The contractual life is ten years. |
Stock-based compensation expense for the three and nine months ended September 30, 2013 and 2012 consisted of stock-based compensation expense related to stock options, RSUs and the ESPP. |
Stock-based compensation expense for the three and nine months ended September 30, 2013 and 2012, respectively, was allocated as follows: |
| | Three Months Ended | | | Nine Months Ended | | |
| | September 30, | | | September 30, | | |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | | |
| | (in thousands) | | |
| | | | | | | | | | | | | |
Cost of product revenues | $ | 39 | | $ | 24 | | $ | 91 | | $ | 62 | | |
Sales and marketing | | 76 | | | 67 | | | 191 | | | 157 | | |
General and administrative | | 632 | | | 859 | | | 1,685 | | | 2,134 | | |
Research and development | | 16 | | | 8 | | | 33 | | | 20 | | |
Total stock-based compensation | $ | 763 | | $ | 958 | | $ | 2,000 | | $ | 2,373 | | |
The Company did not capitalize any stock-based compensation. |
Weighted Average Common Shares Outstanding |
Basic income per share is based upon net income divided by the number of weighted average common shares outstanding during the period. The calculation of diluted net income per share assumes conversion of stock options into common stock using the treasury method. The weighted average number of shares used to compute basic and diluted earnings per share consists of the following: |
` | | Three Months Ended | | Nine Months Ended | | | | | |
| | September 30, | | September 30, | | | | | |
| | 2013 | | 2012 | | 2013 | | 2012 | | | | | |
| | | | | | | | | |
Basic | | 30,574,815 | | 28,797,887 | | 30,154,788 | | 28,758,621 | | | | | |
Effect of assumed conversion of stock options and restricted stock units | | - | | - | | - | | 594,642 | | | | | |
Diluted | | 30,574,815 | | 28,797,887 | | 30,154,788 | | 29,353,263 | | | | | |
Diluted loss per share for the three and nine months ended September 30, 2013 was based on the basic weighted-average number of shares outstanding during the period, as the inclusion of any common stock equivalents would have been anti-dilutive. Excluded from the shares used in calculating the diluted earnings per common share in the above table are options to purchase approximately 6,060,144 and 8,644,009 shares of common stock for the three months ended September 30, 2013 and 2012, respectively, as the impact of these shares would be anti-dilutive. Excluded from the shares used in calculating the diluted earnings per common share in the above table are options to purchase approximately 7,227,774 and 5,812,794 shares of common stock for the nine months ended September 30, 2013 and 2012, respectively, as the impact of these shares would be anti-dilutive. |