Authorized Capital Stock—The Company was authorized to issue 190,000,000 and 25,000,000 shares of common stock, with a par value of $0.000004 per share as of September 30, 2020 and December 31, 2019, respectively.

Warrants—In May 2015, the Company issued warrants to acquire 116,350 shares of Common Stock at a price of approximately $17.19 per share to the placement agent as consideration for backstopping the financing completed in May 2015. There were no changes related to these warrants during the three and nine months ended September 30, 2020 and September 30, 2019.

Common Stock Issuances and Cancellations—During the three and nine months ended September 30, 2020 and September 30, 2019, the Company issued and cancelled the following shares of common stock:

	Three Months Ended September 30,									Nine Months Ended September 30,
	2020					2019				2020					2019
	Shares			Average Price per Share		Shares		Average Price per Share		Shares			Average Price per Share		Shares		Average Price per Share
Common stock issued in connection with initial public offering		11,500,000		$	15.00		—	$	—		11,500,000		$	15.00		—	$	—
Acquisitions		—			—		25,408		26.90		791,139			31.60		150,439		22.41
Redemption of series A-1 preferred stock		1,786,739			15.00		—		—		1,786,739			15.00		—		—
Exercise of warrant options		2,534,239			0.01		—		—		2,534,239			0.01		—		—
Exercise of options		16,850			8.92		7,150		6.03		20,350			9.27		22,675		18.01
Restricted shares, net		8,333			24.00		—		—		8,333			24.00		—		—
Cancellation of shares		(117,785	)		17.15		—		—		(117,785	)		17.15		—		—
		15,728,376		$	12.82		32,558	$	22.32		16,523,015		$	13.72		173,114	$	21.83

Employee Equity Incentive Plans—The Company has two plans under which stock-based awards have been issued: (i) the Montrose Amended & Restated 2017 Stock Incentive Plan (“2017 Plan”) and (ii) the Montrose Amended & Restated 2013 Stock Option Plan (“2013 Plan”) (collectively the “Plans”).

As of September 30, 2020 and September 30, 2019, there was $10.4 million and $6.7 million, respectively, of total unrecognized stock compensation expense related to unvested options and restricted stock granted under the Plans. Such unrecognized expense is expected to be recognized over the next two years. The following number of shares were authorized to be issued and available for grant as of September 30, 2020 and September 30, 2019:

	September 30, 2020
	2017 Plan		2013 Plan
Shares authorized to be issued		2,945,443		2,047,269
Shares available for grant		1,233,266		—

	September 30, 2019
	2017 Plan		2013 Plan
Shares authorized to be issued		981,800		2,074,604
Shares available for grant		159,428		—

	Three Months Ended September 30,
	2020									2019
	2017 plan				2013 plan					2017 plan				2013 plan
	Options		Restricted Stock		Options			Total		Options		Restricted Stock		Options		Total
Cost of revenue	$	276	$	—	$	(5	)	$	271	$	278	$	—	$	97	$	375
Selling, general and administrative expense		592		233		53			878		185		111		384		680
	$	868	$	233	$	48		$	1,149	$	463	$	111	$	481	$	1,055

	Nine Months Ended September 30,
	2020								2019
	2017 plan				2013 plan				2017 plan				2013 plan
	Options		Restricted Stock		Options		Total		Options		Restricted Stock		Options		Total
Cost of revenue	$	973	$	—	$	126	$	1,099	$	623	$	—	$	390	$	1,013
Selling, general and administrative expense		1,178		973		189		2,340		457		323		1,784		2,564
	$	2,151	$	973	$	315	$	3,439	$	1,080	$	323	$	2,174	$	3,577

Restricted Stock—During the nine months ended September 30, 2020 and September 30, 2019, the Company issued 33,229 and 30,000 shares of restricted stock with a fair market value of $31.60 and $24.00 per share, respectively, to certain 2017 Plan participants as Director’s compensation. These shares of restricted stock granted in the nine months ended September 30, 2020 vest one year from the date of grant and the shares of restricted stock granted during the nine months ended September 30, 2019 vest over three years, or, in each case, in full upon a change in control, subject to the participant’s continued service as a Director throughout such date, or upon retirement. Members of the Board of Directors that receive stock-based compensation are treated as employees for accounting purposes. There were 10,000 shares of restricted stock that became fully vested and were released as unrestricted shares of common stock during the nine months ended September 30, 2020. No restricted shares vested and were released as unrestricted shares of common stock during the nine months ended September 30, 2019. There were 1,667 shares of restricted stock that were forfeited during the nine months ended September 30, 2020. There were no forfeitures of restricted shares during the nine months ended September 30, 2019. There were an aggregate of 267,173 and 242,025 restricted shares outstanding as of September 30, 2020 and September 30, 2019, respectively.

Options—Options issued to all optionees under the 2017 Plan vest over four years from the date of issuance (or earlier vesting start date, as determined by the Board of Directors) as follows: one half on the second anniversary of date of grant and the remaining half on the fourth anniversary of the date of grant, with the exception of certain annual grants to certain executive officers, which vest annually over a 3-year period. The following summarizes the options activity of the 2017 Plan for the nine months ended September 30, 2020 and September 30, 2019:

	Options to Purchase Common Stock			Weighted- Average Exercise Price per Share		Weighted Average Grant Date Fair Value per Share		Weighted Average Remaining Contract Life (in Years)		Aggregate Intrinsic Value of In-The- Money Options (in Thousands)
Outstanding at December 31, 2018		257,762		$	20	$	10		-	$	1,151
Granted		356,470			27		14		-		—
Forfeited/ cancelled		(17,700	)		19		—		-		—
Outstanding at September 30, 2019		596,532			24		12		8.07		4,693

Outstanding at December 31, 2019		617,852			24		12		7.82		4,693
Granted		851,877			32		12		-		—
Forfeited/ cancelled		(14,375	)		22		—		-		—
Exercised		(925	)		14		—		-		7,918
Outstanding at September 30, 2020		1,454,429			21		12		7.59		7,649
Exercised at September 30, 2020		925			14		—		7.33		7,649
Options vested and expected to vest		1,454,429			21				9.04		7,649

The following weighted-average assumptions were used in the Black-Sholes option-pricing model calculation for the nine months ended September 30, 2020 and September 30, 2019:

	September 30,		September 30,
	2020		2019
Common stock value (per share)	$	16.36	$	27.30
Expected volatility		46.14		47.94
Risk-free interest rate		0.41		2.15
Expected life (years)		7		7
Forfeiture rate	None		None
Dividend rate	None		None

Montrose Amended & Restated 2013 Stock Option Plan—The following summarizes the activity of the 2013 Plan for the nine months ended September 30, 2020 and September 30, 2019:

	Options to Purchase Common Stock			Weighted- Average Exercise Price per Share		Weighted Average Grant Date Fair Value per Share		Weighted Average Remaining Contract Life (in Years)		Aggregate Intrinsic Value of In-The- Money Options (in Thousands)
Outstanding at December 31, 2018		1,900,404		$	6	$	1		7.30		33,290
Forfeited/ cancelled		(14,500	)		8		—		-		—
Expired		(5,400	)		8		—		-		—
Exercised		(19,010	)		6		—		-		466
Outstanding at September 30, 2019		1,861,494			6		1		6.65		47,381

Outstanding at December 31, 2019		1,855,469			6		1		6.40		46,617
Forfeited/ cancelled		(7,500	)		10		—		-		—
Expired		(11,300	)		6		—		-		—
Exercised		(19,175	)		8		—		-		354
Outstanding at September 30, 2020		1,817,494			6		1		5.63		33,772
Exercised at September 30, 2020		221,025			6		—		5.14		33,772
Options vested and expected to vest		1,817,494			6		—		5.17		33,772

Total shares outstanding from exercised options were 221,950 shares and 201,600 shares as of September 30, 2020 and December 31, 2019.

Common Stock Reserved for Future Issuances—At September 30, 2020 and September 30, 2019, the Company has reserved certain stock of its authorized but unissued common stock for possible future issuance in connection with the following: