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, as of March 31, 2019, was $0.5 million related to stock options and is expected to be recognized as expense over a weighted-average period of approximately 3.0 years. The expense related to restricted stock units (RSUs) is recognized over a three-to-four year vesting period and is based on the fair value of the underlying stock on the dates of grant. The unamortized compensation cost, as of March 31, 2019, was $0.4 million related to RSUs and is expected to be recognized as expense over a weighted-average period of approximately 0.3 years.

For the three months ended March 31, 2019 and 2018, there were no excess tax benefits associated with the exercise of stock options due to the Company’s historical loss positions.

Valuation Assumptions

The fair value of the Company’s stock options granted during the three months ended March 31, 2019 and 2018 was estimated on the grant dates using the Black-Scholes valuation option-pricing model with the following assumptions:


	Three Months Ended March 31,
	2019			2018
Risk-free interest rate		2.5	%		2.2	%
Volatility		128.4	%		109.5	%
Expected life (years)		3 - 5			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-vestingemployment 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.

Prior to January 1, 2019, the stock-based compensation expense recorded was adjusted based on estimated forfeiture rates. An annualized forfeiture rate was used as a best estimate of future forfeitures based on the Company’s historical forfeiture experience. Stock-based compensation expense was then adjusted in later periods if the actual forfeiture rate was different from the estimate. Upon the adoption of ASU No. 2016-09 on January 1, 2019, the Company changed its accounting policy and began accounting for forfeitures as they occur. Historically, estimated forfeitures were immaterial to the condensed consolidated financial statements.

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
	Shares Available for Grant			Number of Shares			Weighted Average Exercise Prices
Balance at January 1, 2019		4,007			337		$	4.19
Additional shares authorized under the Plan		50			—			—
RSUs granted		(2,028	)		—			—
RSUs cancelled and returned to the Plan		11			—			—
Options granted		(1,297	)		1,297		$	0.20
Options cancelled and returned to the Plan		1			(1	)	$	7.20

Balance at March 31, 2019		744			1,633		$	1.02

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


	Number of Shares			Weighted Average Grant-Date Fair Value
Non-vested shares at December 31, 2018		272		$	1.23
Granted		2,028		$	0.20
Vested		(167	)	$	1.48
Cancelled		(11	)	$	1.26

Non-vested shares at March 31, 2019		2,122		$	0.23

The total intrinsic value of the RSUs outstanding as of March 31, 2019 was $0.4 million.

The following table summarizes significant ranges of outstanding and exercisable options as of March 31, 2019 (in thousands, except contractual life and exercise price):


	Options Outstanding						Options Exercisable
Range of Exercise Price	Number Outstanding		Weighted Average Remaining Contractual Life (in Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price		Aggregate Intrinsic value
$0.18 - $0.74		1,297		2.80	$	0.20		30	$	0.20	$	—
$0.75 - $1.27		160		4.55	$	0.75		53	$	0.75	$	—
$1.28 - $7.19		51		5.15	$	2.09		23	$	2.93	$	—
$7.20 - $20.49		106		7.04	$	7.20		92	$	7.20	$	—
$20.50 - $46.20		19		5.94	$	21.53		19	$	21.53	$	—

$0.18 - $46.20		1,633		5.52	$	1.02		217	$	5.46	$	—

There were no stock options exercised during the three months ended March 31, 2019 or 2018.