LENSAR had a phantom stock plan under which it granted phantom stock units to LENSAR directors and employees. In connection with the Company’s issuance of restricted stock awards under the 2020 Plan (as defined below), all remaining outstanding awards under the Phantom Stock Plan were cancelled, and no further awards are outstanding under such plan. As such, the liability recorded for unvested phantom stock units was remeasured at fair value immediately prior to the modification on July 22, 2020, which resulted in a decrease in fair value of $108. The fair value of $306 was reclassified from Accrued liabilities to Additional paid-in capital on the modification date. The fair value of the underlying common stock was determined using preliminary valuation techniques with the most reliable information currently available.

The following table summarizes the phantom share activity during the nine months ended September 30, 2020:

	Number of Units			Weighted- average grant date fair value per share
Non-vested at beginning of year		42,800		$	6.39
Granted		—			—
Vested		(5,350	)		6.39
Forfeited		—			—
Cancelled		(37,450	)		6.39
Non-vested at end of the period		—		$	—

On July 9, 2020, the Board of Directors approved the LENSAR Inc. 2020 Incentive Award Plan (the “2020 Plan”). Under the 2020 Plan, the Company is authorized to issue up to 3,333,333 shares in the form of stock options, restricted stock, restricted stock unit awards and other stock-based awards. The amount and terms of grants are determined by the Company’s Board of Directors or a duly authorized committee thereof. Participants must pay the Company, or make provisions to pay, any required withholding taxes by the date of the event creating the tax liability. Participants may satisfy the tax liability in cash or in stock.

On July 22, 2020, the Board of Directors approved the grants of 1,847,298 shares of restricted stock in connection with the proposed Spin-Off to certain individuals under the 2020 Plan in consideration of future services to be rendered to the Company. The aggregate grant date fair value of these restricted stock awards was determined to be $19,951 or $10.80 per share based on the fair value of the underlying common stock using preliminary valuation techniques with the most reliable information currently available. The vesting schedule of the restricted stock awards is (i) 40% vest on the later of three months following the completion of the proposed Spin-Off or six months following the grant date (provided the proposed Spin-Off has occurred prior to such date), (ii) 30% vest 18 months following grant date, and (iii) 30% vest 36 months following grant date.

The fair value of awards granted under the 2020 Plan will be recognized using a straight-line attribution method over the service period, except for portions of the award subject to performance conditions which will be recognized ratably over the service period for each separate performance vesting tranche. Awards subject to the performance condition were considered probable of vesting as of September 30, 2020. No restricted stock awards were vested as of September 30, 2020.

The weighted-average grant date fair value for restricted stock awards granted under the 2020 Plan for the three and nine months ended September 30, 2020 was $10.80 and $10.80, respectively.

At September 30, 2020, there was approximately $16,101 of total unrecognized compensation expense related to restricted stock awards, which is expected to be recognized over a weighted-average period of 1.4 years.

The following table sets forth the total stock-based compensation expense recognized under the Phantom Stock Plan and the 2020 Plan in the Company’s condensed statements of operations:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of revenue – product	$	130	$	7	$	130	$	6
Cost of revenue – service		70		3		70		3
Selling, general and administrative expenses		3,179		122		3,267		271
Research and development expenses		370		15		370		22
Total	$	3,749	$	147	$	3,837	$	302

PDL has equity incentive plans under which it grants equity awards, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance share and performance unit awards, deferred compensation awards and other stock-based or cash-based awards.

Stock-based compensation expense related to the PDL awards for the three months ended September 30, 2020 and 2019 was approximately $15 and $28 and for the nine months ended September 30, 2020 and 2019 was approximately $53 and $73 recorded in selling, general, and administrative expenses, respectively.

The total fair value of restricted stock awards vested during the nine months ended September 30, 2020 and 2019 was approximately $65 and zero, respectively.