XML 87 R16.htm IDEA: XBRL DOCUMENT v2.4.0.8
Stock-Based Compensation
 6 Months Ended
Jun. 30, 2013
Stock-Based Compensation [Abstract]  
Stock-Based Compensation
 
Note 9. Stock-Based Compensation

We account for stock-based compensation in accordance with the provisions of FASB Accounting Standards Codification (“ASC”) topic 718, Compensation-Stock Compensation (“ASC 718”), which established accounting for stock-based awards exchanged for employee services. Stock-based compensation cost is measured at each grant date, based on the fair value of the award, and is recognized as expense over the employee’s requisite service period of the award. All of our stock compensation is accounted for as an equity instrument.

The following table summarizes compensation costs related to our stock-based awards (in thousands, except per share data):

 
Three Months Ended
June 30,
  
Six Months Ended
June 30,
 
 
2013
  
2012
  
2013
  
2012
 
        
Cost of revenue
 
$
5
  
$
19
  
$
11
  
$
37
 
Selling, general and administrative
  
291
   
238
   
575
   
476
 
Research and development
  
42
   
35
   
84
   
60
 
Total stock-based compensation
  
338
   
292
   
670
   
573
 
Tax effect on stock-based compensation
  
—
   
—
   
—
   
—
 
Net effect on net income (loss)
 
$
338
  
$
292
  
$
670
  
$
573
 
 
Stock-based compensation reduced the net income and increased the net loss by the following amounts:

Effect on net income (loss) attributable to AXT, Inc. per common share:
        
Basic
 
$
(0.01
)
 
$
(0.01
)
 
$
(0.02
)
 
$
(0.02
)
Diluted
 
$
(0.01
)
 
$
(0.01
)
 
$
(0.02
)
 
$
(0.02
)
 
As of June 30, 2013, the unamortized compensation costs related to unvested stock options granted to employees under our stock option plan was approximately $1.7 million, net of estimated forfeitures of $26,000. These costs will be amortized on a straight-line basis over a weighted-average period of approximately 2.4 years and will be adjusted for subsequent changes in estimated forfeitures. We elected not to capitalize any stock-based compensation to inventory as of June 30, 2013 due to the immateriality of the amount.
 
We estimate the fair value of stock options using the Black-Scholes valuation model. There were zero and 24,000 stock options granted with weighted average grant date fair values of $0 and $2.15 in the three months ended June 30, 2013 and 2012, respectively. There were zero and 104,000 stock options granted with weighted average grant date fair values of $0 and $2.84 in the six months ended June 30, 2013 and 2012, respectively. The fair value of our stock options granted to employees for the three and six months ended June 30, 2012 was estimated using the following weighted-average assumptions:
 
 
Three Months Ended
June 30, 2012
  
Six Months Ended
June 30, 2012
 
    
Expected term (in years)
  
4.0
   
4.0
 
Volatility
  
74.82
%
  
73.74
%
Expected dividend
  
0
%
  
0
%
Risk-free interest rate
  
0.56
%
  
0.71
%

The following table summarizes the stock option transactions during the six months ended June 30, 2013 (in thousands, except per share data):
 
Stock Options
 
Shares
  
Weighted-
average
Exercise
Price
  
Weighted-
average
Remaining
Contractual
Life
(in years)
  
Aggregate
Intrinsic
Value
 
 
 
  
  
  
 
Balance as of January 1, 2013
  
2,727
  
$
3.28
   
6.71
  
$
1,353
 
Granted
  
—
   
—
         
Exercised
  
(195
)
  
1.40
         
Canceled and expired
  
(38
)
  
4.30
         
Balance as of June 30, 2013
  
2,494
  
$
3.41
   
6.64
  
$
969
 
 
                
Options vested and expected to vest as of June 30, 2013
  
2,481
  
$
3.41
   
6.63
  
$
969
 
 
                
Options exercisable as of June 30, 2013
  
1,600
  
$
3.18
   
5.51
  
$
938
 

The aggregate intrinsic value in the table above represents the total pretax intrinsic value, based on our closing price of $2.70 on June 28, 2013, which would have been received by the option holder had all option holders exercised their options on that date.

Restricted stock awards

A summary of activity related to restricted stock awards for the six months ended June 30, 2013 is presented below:

Stock Awards
 
Shares
  
Weighted-Average
Grant Date Fair Value
 
Non-vested as of January 1, 2013
  
238,723
  
$
4.27
 
Granted
  
43,636
  
$
2.75
 
Vested
  
(24,781
)
 
$
4.44
 
Non-vested as of June 30, 2013
  
257,578
  
$
4.00
 

As of June 30, 2013, the unamortized compensation costs related to unvested restricted stock awards was approximately $789,000, which is to be amortized on a straight-line basis over a weighted average period of approximately 2.5 years.