Stock-Based Compensation

The stock-based compensation expense included in the Company's consolidated financial statements for the three months ended April 1, 2018 and April 2, 2017 was as follows (in thousands):



	Three Months Ended
	April 1, 2018		April 2, 2017
Cost of revenue	$	34	$	33
Research and development	183		139
Selling, general and administrative	215		146
Total costs and expenses	$	432	$	318

No stock-based compensation was capitalized during any period presented above.

No stock options were granted in the three months ended April 1, 2018 and April 2, 2017. As of April 1, 2018 and April 2, 2017, the fair value of unvested stock options, net of expected forfeitures, was approximately $230,000 and $413,000, respectively. The remaining unrecognized stock-based compensation expense is expected to be recognized over a weighted average period of 2.21 years as of April 1, 2018.

Stock-Based Compensation Award Activity

The following table summarizes the activity in the shares available for grant under the 2009 Plan during the three months ended April 1, 2018:



	Shares Available for Grant
	(in thousands)
Balance at December 31, 2017	3,899
Authorized	4,000
RSUs granted	(1,015	)
RSUs forfeited or expired	90
Performance RSUs forfeited or expired	8
Balance at April 1, 2018	6,982

Stock Options

The following table summarizes stock options outstanding and stock option activity under the 2009 Plan, and the related weighted average exercise price, for the first three months of 2018:



	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Term	Aggregate Intrinsic Value
	(in thousands)			(in years)	(in thousands)
Balance outstanding at December 31, 2017	3,558	$	2.09
Forfeited or expired	—	—
Exercised	—	—
Balance outstanding at April 1, 2018	3,558	$	2.09	4.09	$	677
Exercisable at April 1, 2018	3,059	$	2.27	3.39	$	372
Vested and expected to vest at April 1, 2018	3,463	$	2.12	3.97	$	616

The aggregate intrinsic value in the table above represents the total pretax intrinsic value, based on the Company's closing stock price of $1.52 as of the end of the Company's current reporting period, which would have been received by the option holders had all option holders exercised their options as of that date.

The total intrinsic value of options exercised during the three months ended April 1, 2018 and April 2, 2017 was $0 and $27,000, respectively. Total cash received from employees as a result of employee stock option exercises during the three months ended April 1, 2018 and April 2, 2017 was approximately $0 and $70,000, respectively. The Company settles employee stock option exercises with newly issued common shares. In connection with these exercises, there was no tax benefit realized by the Company due to the Company's current loss position. Total stock-based compensation related to stock options was $38,000 and $62,000 for the three months ended April 1, 2018 and April 2, 2017, respectively.

Restricted Stock Units

The Company grants restricted stock units or RSUs, to employees and board of directors with various vesting terms. RSUs entitle the holder to receive, at no cost, one common share for each RSU as it vests. In general, the Company's policy is to withhold shares in settlement of employee tax withholding obligations upon the vesting of RSUs. The stock-based compensation related to RSUs was $295,000 and $156,000 for the three months ended April 1, 2018 and April 2, 2017, respectively. As of April 1, 2018 and April 2, 2017, there was $2.4 million and $1.0 million, respectively, in unrecognized compensation expense related to RSUs. The remaining unrecognized stock-based compensation expense is expected to be recorded over a weighted average period of 2.73 years.

A summary of activity for the Company's RSUs for the three months ended April 1, 2018 and information regarding RSUs outstanding and expected to vest as of April 1, 2018 is as follows:



	RSUs & PRSUs Outstanding
	Number of Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Nonvested at December 31, 2017	2,363		$	1.54
Granted	1,015		1.64
Vested	(115	)	1.79
Forfeited	(98	)	—
Nonvested at April 1, 2018	3,165		$	1.56

Employee Stock Purchase Plan

The weighted average estimated fair value, as defined by the amended authoritative guidance, of rights issued pursuant to the Company's 2009 ESPP during the first quarters ended April 1, 2018 and April 2, 2017, was $0.46 and $0.23 per right, respectively.

As of April 1, 2018, 1.6 million shares remained available for issuance under the 2009 ESPP. For the three months ended April 1, 2018, the Company recorded stock-based compensation expense related to the 2009 ESPP of $54,000.

The fair value of rights issued pursuant to the Company's 2009 ESPP was estimated on the commencement date of each offering period using the following weighted average assumptions:



	Three Months Ended
	April 1, 2018		April 2, 2017
Expected term (months)	6		6
Risk-free interest rate	1.39	%	0.57	%
Volatility	54.87	%	48.69	%
Dividend yield	—		—

As of April 1, 2018, the unrecognized stock-based compensation expense relating to the Company's 2009 ESPP was $26,000 and is expected to be recognized over a weighted average period of approximately 1.4 months.