Note 7. Stock-Based Compensation

The expense relating to stock options is recognized on a straight-line basis over the requisite service period, usually the vesting period, based on the grant-date fair value. The unamortized compensation cost, net of expected forfeitures, as of September 30, 2018 was $0.6 million related to stock options and is expected to be recognized as expense over a weighted-average period of approximately 1.8 years. The expense related to restricted stock units (RSUs) is recognized over a three-to-five year vesting period and is based on the fair value of the underlying stock on the dates of grant. The unamortized compensation cost, net of expected forfeitures, as of September 30, 2018 was $0.3 million related to RSUs and is expected to be recognized as expense over a weighted-average period of approximately 0.5 years.

For the three and nine months ended September 30, 2018 and 2017, there were no excess tax benefits associated with the exercise of stock options due to the Company’s historical loss positions.

Valuation Assumptions

No stock options were granted during the three months ended September 30, 2018 or 2017. The fair value of the Company’s stock options granted for the nine months ended September 30, 2018 and 2017 was estimated on the grant dates using the Black-Scholes valuation option-pricing model with the following assumptions:

	Nine Months Ended
	September 30,
	2018			2017
Risk-free interest rate		2.2	%		1.6	%
Volatility		109.5	%		70.2	%
Expected life (years)		4.0			4.0
Dividend yield		—	%		—	%

The risk-free interest rate was derived from the Daily Treasury Yield Curve Rates, as published by the U.S. Department of the Treasury as of the grant date for terms equal to the expected terms of the options. The expected volatility was based on the historical volatility of the Company’s stock price over the expected term of the options. The expected term of options granted was derived from historical data based on employee exercises and post‑vesting employment termination behavior. A dividend yield of zero is applied because the Company has never paid dividends, and has no intention to pay dividends in the near future.

The stock‑based compensation expense recorded is adjusted based on estimated forfeiture rates. An annualized forfeiture rate has been used as a best estimate of future forfeitures based on the Company’s historical forfeiture experience. Stock‑based compensation expense will be adjusted in later periods if the actual forfeiture rate is different from the estimate.

Common Stock Options and Restricted Stock

A summary of option and RSU activity under the Company’s Amended and Restated 2010 Equity Incentive Plan (the Plan) is presented below (in thousands, except exercise price):

				Options outstanding
							Weighted
	Shares						Average
	Available			Number of			Exercise
	for Grant			Shares			Prices
Balance at January 1, 2018		231			307		$	4.81
Additional shares authorized under the Plan		50			—			—
RSUs granted		(60	)		—			—
RSUs cancelled and returned to the Plan		1			—			—
Options granted		(40	)		40		$	1.28
Options cancelled and returned to the Plan		2			(2	)	$	23.47
Balance at March 31, 2018		184			345		$	4.30
Options cancelled and returned to the Plan		1			(1	)	$	9.40
Balance at June 30, 2018		185			344		$	4.27
RSUs granted		(208	)		—			—
RSUs cancelled and returned to the Plan		27			—			—
Options cancelled and returned to the Plan		6			(6	)	$	8.52
Balance at September 30, 2018		10			338		$	4.20

A summary of RSU activity under the Plan is presented below (in thousands, except for fair value):

				Weighted
				Average
	Number of			Grant-Date
	Shares			Fair Value
Non-vested shares at January 1, 2018		376		$	1.58
Granted		60		$	1.16
Vested		(133	)	$	2.11
Cancelled		(1	)	$	0.94
Non-vested shares at June 30, 2018		302		$	1.27
Granted		208		$	0.81
Vested		(110	)	$	0.93
Cancelled		(27	)	$	1.26
Non-vested shares at September 30, 2018		373		$	1.12

The total intrinsic value of the RSUs outstanding as of September 30, 2018 was $0.2 million.

The following table summarizes significant ranges of outstanding and exercisable options as of September 30, 2018 (in thousands, except contractual life and exercise price):

	Options Outstanding						Options Exercisable
			Weighted
			Average
			Remaining		Weighted				Weighted
			Contractual		Average				Average		Aggregate
	Number		Life		Exercise		Number		Exercise		Intrinsic
Range of Exercise Price	Outstanding		(in Years)		Price		Exercisable		Price		value
$0.75 - $1.27		160		5.05	$	0.75		53	$	0.75	$	—
$1.28 - $7.19		51		5.65	$	2.08		21	$	2.75	$	—
$7.20 - $20.49		108		7.54	$	7.20		77	$	7.20	$	—
$20.50 - $46.20		19		6.44	$	21.53		18	$	21.62	$	—
$0.75 - $46.20		338		6.02	$	4.20		169	$	6.12	$	—
Vested and expected to vest		303		6.10	$	4.52						—
Exercisable		169		6.36	$	6.12						—

There were no stock options exercised during the nine months ended September 30, 2018 or 2017.