8.	STOCK-BASED COMPENSATION

In July 2016, we commenced administration of the ANI Pharmaceuticals, Inc. 2016 Employee Stock Purchase Plan. As of September 30, 2017, we have 0.2 million shares of common stock available under the ESPP. Under the ESPP, participants can purchase shares of our stock at a 15% discount. In the three and nine months ended September 30, 2017, we recognized $1 thousand and $5 thousand of stock-based compensation expense related to the ESPP in cost of sales and $11 thousand and $50 thousand of stock-based compensation expense related to the ESPP in selling, general, and administrative expense in our accompanying unaudited interim condensed consolidated statements of earnings, respectively. In the three and nine months ended September 30, 2016, we recognized $1 thousand of stock-based compensation expense related to the ESPP in cost of sales and $11 thousand of stock-based compensation expense related to the ESPP in selling, general, and administrative expense in our accompanying unaudited interim condensed consolidated statements of earnings, respectively.

All equity-based service awards are granted under the ANI Pharmaceuticals, Inc. Fifth Amended and Restated 2008 Stock Incentive Plan (the “2008 Plan”), which was approved by shareholders at the May 17, 2017 annual meeting. The approved 2008 Plan provided for an increase of 0.8 million shares available to the plan. As of September 30, 2017, we have 0.8 million shares of common stock available under the 2008 Plan.

The following table summarizes stock-based compensation expense incurred under the 2008 Plan and included in our accompanying unaudited interim condensed consolidated statements of earnings:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2017		2016		2017		2016
Cost of sales	$	19	$	23	$	68	$	37
Research and development		173		25		485		74
Selling, general, and adminstrative		1,270		1,305		4,059		4,564
	$	1,462	$	1,353	$	4,612	$	4,675

A summary of stock option and restricted stock activity under the 2008 Plan during the nine months ended September 30, 2017 and 2016 is presented below:

(in thousands)	Options		RSAs
Outstanding December 31, 2015		474		63
Granted		293		42
Options Exercised/RSAs Vested		(120)		(15)
Forfeited		(59)		(12)
Outstanding September 30, 2016		588		78

Outstanding December 31, 2016		578		63
Granted		192		50
Options Exercised/RSAs Vested		(7)		(27)	⁽¹⁾
Forfeited		(3)		-
Outstanding September 30, 2017		760		86

⁽¹⁾ Includes five thousand shares purchased from employees to cover employee income taxes related to income earned upon vesting of restricted stock. The shares purchased are held in treasury and the $259 thousand total purchase price for the shares is included in Treasury stock in our accompanying unaudited interim condensed consolidated balance sheets.