Stock-Based Compensation

The Company accounts for its stock-based compensation at fair value. The following table summarizes stock-based compensation expense by financial statement line item for the three and nine months ended December 31, 2017 and 2016 (in thousands):



	Three months ended December 31,				Nine months ended December 31,
	2017		2016		2017		2016
Cost of revenues	$	39	$	40	$	98	$	139
Research and development	184		61		294		153
Selling, general and administrative	660		512		1,723		1,974
Total	$	883	$	613	$	2,115	$	2,266

The Company issued 37,140 shares of immediately vested common stock and 800,500 shares of restricted stock awards during the nine months ended December 31, 2017, and issued 35,000 shares of immediately vested common stock, and granted 126,000 restricted stock awards during the nine months ended December 31, 2016. These restricted stock awards generally vest over 2-3 years. Awards for restricted stock include both time-based and performance-based awards. For options and awards that vest upon the passage of time, expense is being recorded over the vesting period. Performance-based awards are expensed over the requisite service period based on probability of achievement. In addition, the Company issued 16,667 restricted stock units under the 2007 Stock Incentive Plan during the nine months ended December 31, 2017, each of which represents the right to receive one share of common stock in connection with a severance agreement entered into with one of the Company's former executive officers. These restricted stock units vested and were settled in shares of common stock on the eighth day after receipt of an irrevocable release.

The estimated fair value of the Company’s stock-based awards, less expected annual forfeitures, is amortized over the awards’ service period. The total unrecognized compensation cost for unvested outstanding stock options was $0.3 million at December 31, 2017. This expense will be recognized over a weighted average expense period of approximately 1.2 years. The total unrecognized compensation cost for unvested outstanding restricted stock was $2.8 million at December 31, 2017. This expense will be recognized over a weighted-average expense period of approximately 2.0 years.

The Company did not grant any stock options during the three and nine months ended December 31, 2017. During the nine months ended December 31, 2016, the Company granted 9,703 stock options. These options will vest over 2 years. The weighted average assumptions used in the Black Scholes valuation model for stock options granted during the nine months ended December 31, 2016 are as follows:



	December 31, 2017	December 31, 2016
Expected volatility	N/A	67.6	%
Risk-free interest rate	N/A	1.3	%
Expected life (years)	N/A	5.7
Dividend yield	N/A	None