NOTE 8. STOCK-BASED COMPENSATION

The following table presents stock-based compensation expense recognized for stock options, restricted stock units, or RSUs, performance-based restricted stock units, or PRSUs, and the Company’s employee stock purchase program, or ESPP, in the Company’s statements of operations (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017

Research and development	$	880	$	916	$	2,770	$	3,361
General and administrative		1,068		1,186		4,206		3,640
Total	$	1,948	$	2,102	$	6,976	$	7,001

In January 2017, the Company granted 161,865 PRSUs to certain employees that vest upon the achievement of specified performance conditions, subject to the employees’ continued service relationship with the Company through the date of achievement. At September 30, 2018, 125,895 of these PRSUs were outstanding. None of the PRSUs vested during each of the three and nine months ended September 30, 2018 and 2017. However, the related compensation cost is recognized as an expense over the estimated vesting period when achievement of the milestone is considered probable. The expense recognized for these awards is based on the grant date fair value of the Company’s common stock multiplied by the number of units granted. The Company recognized $0.1 million and $0.5 million of related expense during the three and nine months ended September 30, 2018, respectively.

In July 2018, the Company granted 903,374 PRSUs to its employees that vest upon the achievement of certain performance conditions, subject to the employees’ continued service relationship with the Company through the achievement date. At September 30, 2018, 903,374 of these PRSUs were outstanding. Based on the evaluation of the performance conditions at September 30, 2018, the Company has not recorded stock-based compensation expense for the three months ended September 30, 2018 related to these PRSUs. The Company will continue to evaluate the performance conditions for these PRSUs at each reporting period and will record compensation expense related to the PRSUs accordingly.

At September 30, 2018, the Company had $14.4 million, $1.2 million, $0.1 million and $0.1 million of total unrecognized compensation expense, net of estimated forfeitures, related to stock option grants, RSU grants, PRSU grants and the ESPP, respectively, that will be recognized over an average vesting period of 2.8 years, 1.7 years, 0.1 years and 0.4 years, respectively.

Option Exercises

For each of the three and nine months ended September 30, 2018, zero options were exercised to purchase shares of the Company's common stock, with zero net proceeds to the Company. For the three and nine months ended September 30, 2017, 4,833 and 33,159 options, respectively, were exercised to purchase shares of the Company’s common stock, with insignificant net proceeds to the Company.

Restricted Stock Units

For each of the three and nine months ended September 30, 2018, the Company issued zero shares, of its common stock upon vesting of RSUs or PRSUs to its employees. For the three and nine months ended September 30, 2017, the Company issued zero and 15,188 shares, respectively, of its common stock due to vesting of RSUs.

Employee Stock Purchase Plan

In February 2018, the Company sold 68,589 shares of its common stock under the ESPP. The shares were purchased by employees at a purchase price of $4.38 per share with proceeds to the Company of approximately $0.3 million. In August 2018, the Company sold 52,370 shares of its common stock under the ESPP. The shares were purchased by employees at a purchase price of $3.66 per share with proceeds to the Company of approximately $0.2 million.

Issuance of Common Stock for Services

For the three and nine months ended September 30, 2018, the Company issued zero and 75,183 shares, respectively, of its common stock to members of the board of directors who elected to receive stock in lieu of their cash fees under the Company’s Non-Employee Director Compensation Program. The shares issued were valued at $0.3 million based on the fair value of the common stock on the date of grant. For the three and nine months ended September 30, 2017, the Company issued zero and 46,858 shares, respectively, of its common stock to members of the board of directors who elected to receive stock in lieu of their cash fees under the Company’s Non-Employee Director Compensation Program. The shares issued were valued at $0.2 million based on the fair value of the common stock on the date of grant.