12.	SHARE-BASED COMPENSATION

The amount of share-based compensation expense recognized by the Company by location in its statements of operations for the three and nine months ended September 30, 2018 and 2017 is as follows (in thousands):

	Three Months ended September 30,				Nine Months ended September 30,
	2018		2017		2018		2017
Cost of revenues	$	6	$	5	$	15	$	12
Sales and marketing		709		38		828		94
General and administrative		273		40		415		148
Research and development		40		14		106		41
Total	$	1,028	$	97	$	1,364	$	295

2018 Equity Incentive Plan

In June 2018, the Company adopted the 2018 Equity Incentive Plan, or 2018 Plan, which authorized the issuance of up to 1.4 million shares in the form of restricted stock, stock appreciation rights and stock options to the Company’s directors, employees and consultants. The amount and terms of grants are determined by the Company’s board of directors. To date, the Company has granted restricted stock units to one member of senior management and to an independent member of its board of directors as compensation for board service. All stock options granted to date have had exercise prices equal to the fair value, as determined by the closing price as reported by the Nasdaq Global Market, of the underlying common stock on the date of grant. The contractual term of stock options is up to 10 years, and stock options are exercisable in cash or as otherwise determined by the board of directors. Generally, stock options vest 25% upon the first anniversary of the date of grant and the remainder ratably monthly thereafter for 36 months. As of September 30, 2018, there were 1.3 million shares available for future issuance under the 2018 plan.

2003 Stock Incentive Plan

In April 2003 (and as subsequently amended), the Company adopted the 2003 Stock Incentive Plan, or 2003 Plan, which authorized the issuance of up to 3.1 million shares in the form of restricted stock, stock appreciation rights and stock options to the Company’s directors, employees and consultants. The amount and terms of grants are determined by the Company’s board of directors. To date, the Company has granted restricted stock awards only to an independent member of its board of directors and only as compensation for board service. All stock options granted to date have had exercise prices equal to the estimated fair value, as determined by the board of directors, of the underlying common stock on the date of the grant. The contractual term of stock options is up to 10 years, and stock options are exercisable in cash or as otherwise determined by the board of directors. Generally, stock options vest 25% upon the first anniversary of the date of grant and the remainder ratably monthly thereafter for 36 months. As of September 30, 2018, there were no shares available for future issuance under the 2003 Plan. As of the closing of the Company’s IPO, all shares available for issuance under the 2003 Plan were carried over to the newly adopted 2018 Stock Incentive Plan, or 2018 Plan.

Stock Options

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2018:

	Number of Shares under Option (in thousands)			Weighted- average Exercise Price per Option		Weighted- average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2017		2,444		$	2.39
Granted		535		$	7.19
Exercised		(29	)	$	1.58
Forfeited		(77	)	$	3.13
Outstanding at September 30, 2018		2,873		$	3.27		7.2	$	82,739
Exercisable at September 30, 2018		1,642		$	2.23		5.9	$	48,967
Vested and expected to vest at September 30, 2018		2,873		$	3.27		7.2	$	82,739

The Company recognized share-based compensation expense related to stock options of $1.0 million and $0.1 million for the three months ended September 30, 2018 and 2017, respectively, and $1.3 million and $0.2 million for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, there was $2.9 million of total unrecognized compensation cost related to non-vested stock options which the Company expects to recognize over a weighted-average period of 3.2 years. The weighted-average grant-date fair value of stock options granted during the nine months ended September 30, 2018 was estimated at $4.38 per option. The total intrinsic value of stock options exercised during the nine months ended September 30, 2018 was $0.1 million.

For the nine months ended September 30, 2018, the grant-date fair value of stock options was estimated at the time of grant using the following weighted-average inputs and assumptions in the Black-Scholes option pricing model:

Estimated fair value of common stock	$	7.19
Exercise price	$	7.19
Expected term (in years)		6.0
Risk-free interest rate		2.7	%
Expected volatility		65.6	%
Dividend yield		0	%

In April 2018, the Company’s board of directors granted options to purchase 54,794 shares of common stock to the members of the board. These options have an exercise price of $5.22 and vest in 12 equal monthly installments beginning in March 2018; however, the entire grant was subject to forfeiture if an initial public offering of the Company’s common stock did not occur by December 31, 2018. The estimated grant-date fair value of the options awards was $0.2 million. Upon the closing of the Company’s IPO on July 2, 2018, the Company recognized the fair value of the vested portion of the awards as share-based compensation expense, with the unvested portion to be recognized as share-based compensation expense ratably over the remaining service period.

Restricted Stock Awards and Restricted Stock Units

The following table summarizes the Company’s restricted stock award and restricted stock unit activity for the nine months ended September 30, 2018:

	Non-vested Restricted Stock Awards (in thousands)			Weighted- average Grant-date Fair Value		Non-vested Restricted Stock Units (in thousands)		Weighted- average Grant-date Fair Value
Non-vested at December 31, 2017		16		$	2.32		-	$	-
Granted		-		$	-		38	$	25.92
Vested		(9	)	$	2.32		-	$	-
Non-vested at September 30, 2018		7		$	2.32		38	$	25.92

The Company recognized approximately $0.1 million in share-based compensation expense related to restricted stock awards and restricted stock units during the three and nine months ended September 30, 2018 and 2017. As of September 30, 2018, there was $0.9 million of unrecognized compensation cost related to non-vested restricted stock awards and restricted stock units, which the Company expects to recognize over a weighted-average period of 3.6 years. The total fair value at the vesting date of restricted stock awards and restricted stock units vested during the nine months ended September 30, 2018 was $0.2 million.