STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION

Non-Vested Restricted Common Stock

The fair value of non-vested restricted common stock awards is generally the market value of the Company’s common stock on the date of grant. The non-vested restricted common stock awards require the employee to fulfill certain obligations, including remaining employed by the Company for one, two or four years (the vesting period) and in certain cases also require meeting either performance criteria or the Company’s stock achieving a certain price. For non-vested restricted common stock awards that solely require the recipient to remain employed with the Company, the stock compensation expense is amortized over the anticipated service period. For non-vested restricted common stock awards that require the achievement of performance criteria, the Company reviews the probability of achieving the performance goals on a periodic basis. If the Company determines that it is probable that the performance criteria will be achieved, the amount of compensation cost derived for the performance goal is amortized over the anticipated service period. If the performance criteria are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed.

Restricted stock activity was as follows:



	Shares		Weighted Average Grant Fair Value
Balance, December 30, 2017	2,629,274		$	3.31
Granted	1,549,000		2.25
Forfeited	(622,025	)	4.13
Vested	(80,000	)	3.64
Balance, September 29, 2018	3,476,249		$	2.69

On December 31, 2017, the Company amended the employment agreement with our CEO, Dr. John Fan, to expire on December 31, 2020 and as part of the amendment issued restricted stock grants. Of the restricted stock grants issued to Dr. Fan, 640,000 shares will vest upon the first 20 consecutive trading day period following the grant date during which the Company's common stock trades at a price equal to or greater than $5.25, 150,000 shares will vest at the end of the first 20 consecutive trading day period following the grant date during which the Company’s common stock trades at a price per share equal to or greater than $6.00, and 150,000 shares will vest at the end of the first 20 consecutive trading day period following the grant date during which the Company’s common stock trades at a price per share equal to or greater than $7.00. All of the grants are subject to certain acceleration events and expire on December 31, 2020. The total fair value of these awards on December 31, 2017 was $1.7 million. The value of restricted stock grants that vest based on market conditions is computed on the date of grant using the Monte Carlo model with the following assumptions:



	For the period ended September 29, 2018
Performance price target	$	5.25		$	6.00		$	7.00
Expected volatility	48.3		%	48.3		%	48.3		%
Interest rate	1.97		%	1.97		%	1.97		%
Expected life (years)	3			3			3
Dividend yield	—		%	—		%	—		%

Stock-Based Compensation

The following table summarizes stock-based compensation expense within each of the categories below as it relates to non-vested restricted common stock awards for the three and nine months ended September 29, 2018 and September 30, 2017 (no tax benefits were recognized):



	Three Months Ended				Nine Months Ended
	September 29, 2018		September 30, 2017		September 29, 2018		September 30, 2017
Cost of product revenues	$	52,368	$	142,604	$	318,519	$	405,778
Research and development	159,436		203,288		627,519		616,500
Selling, general and administrative	979,026		676,137		2,932,581		1,967,879
Total	$	1,190,830	$	1,022,029	$	3,878,619	$	2,990,157

Unrecognized compensation expense for non-vested restricted common stock as of September 29, 2018 totaled $4.6 million and is expected to be recognized over a weighted average period of approximately two years.