Shareholders' Equity

Equity Compensation Plans

We have a stock plan (the “Stock Plan”) and an inducement stock plan for newly hired employees (together with the Stock Plan, the “Plans”). Under the Plans, stock options to purchase shares of our common stock

may

be granted with a fixed exercise price that is equal to the fair market value of our common stock on the date of grant. These options have a term of up to

years and vest over a predetermined period, generally

four

years. Incentive stock options granted under the Stock Plan

may

only be granted to our employees. The Plans also allow for awards of non-qualified stock options, stock appreciation rights, restricted and unrestricted stock awards, and restricted stock units (“RSUs”).

Stock-Based Compensation

The estimated fair value of stock-based awards is recognized as compensation expense over the vesting period of the award, net of estimated forfeitures. We estimate forfeitures based on historical experience and expected future activities. The fair value of RSUs is determined based on the number of shares granted and the quoted price of our common stock on the date of grant. The fair value of stock option awards is estimated at the grant date based on the fair value of each vesting tranche as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. The BSM model requires various highly judgmental assumptions including expected volatility and option life. If any of the assumptions used in the BSM model change significantly, stock-based compensation expense

may

differ materially in the future from that recorded in the current period. The fair values of our stock option grants were estimated with the following weighted average assumptions:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Dividend yield		0	%		0	%		0	%		0	%
Expected life (years)		4.9			5.6			4.9			5.8
Expected volatility		63	%		64	%		63	%		64	%
Risk-free interest rate		0.2	%		1.6	%		0.5	%		2.1	%

The impact on our results of operations from stock-based compensation expense was as follows (in thousands, except per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of revenue — Edge to Cloud	$	26	$	1	$	50	$	10
Selling, general and administrative		250		175		536		373
Research and development		5		12		15		(12	)
Total stock-based compensation expense	$	281	$	188	$	601	$	371

Stock Option Activity

The following table summarizes stock option activity under the Plans:

						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
	Number of			Exercise		Life		Intrinsic
	Shares			Price		(in years)		Value
Balance at December 31, 2019		1,544,826		$	2.74		7.47	$	46,582
Granted		574,900			1.03
Exercised		(25,000	)		1.35
Forfeited		(109,656	)		1.72
Expired		(200,367	)		4.82
Balance at September 30, 2020		1,784,703			2.07		8.03		214,529
Vested and expected to vest at September 30, 2020		1,548,348			2.14		7.90		172,230
Exercisable at September 30, 2020		568,073		$	3.35		6.28	$	6,601

September 30, 2020

, total compensation cost related to stock options granted but

not

yet recognized, net of estimated forfeitures, was

$490,778.

This cost will be amortized on the straight-line method over a weighted-average period of approximately

1.6

years. The following table summarizes certain information about stock options:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Weighted average grant-date fair value of options granted during the period	$	1.37	$	1.23	$	1.03	$	1.70
Options in-the-money (in shares)		59,201		—		59,201		—
Aggregate intrinsic value of options exercised during the period	$	1.35	$	—	$	1.35	$	—

The aggregate intrinsic value represents the difference between the exercise price of the underlying options and the quoted price of our common stock for the number of options exercised during the period. We issue new shares of common stock upon exercise of stock options.

Restricted Stock Unit Activity

The following table summarizes RSU activity under the Plans:

	Number of			Weighted Average
	Shares			Award Price
Unvested at December 31, 2019		112,846		$	1.44
Granted		219,596			1
Vested		(112,846	)		1.44
Forfeited		—			—
Unvested at September 30, 2020		219,596		$	1.48
Expected to vest after September 30, 2020		206,673		$	1.48

September 30, 2020

, total compensation cost related to RSUs granted but

not

yet recognized, net of estimated forfeitures, was

$173,000.

This cost will be amortized on the straight-line method over a weighted-average period of approximately

0.4

years.

Common Stock Reserved for Future Issuance

The following table summarizes our shares of common stock reserved for future issuance under the Plans as of

September 30, 2020

	September 30, 2020
Stock options outstanding		1,784,703
Restricted stock units outstanding		219,596
Stock options and restricted stock units available for future grant		1,245,563
Common stock reserved for future issuance		3,249,862