10.	Shareholders’ Equity

Equity compensation plans

We have a stock plan (the “Stock Plan”) and an inducement stock plan for newly hired employees (the “Inducement Plan”) (collectively the “Plans”). Under the Plans, stock options may be granted with a fixed exercise price that is equivalent to the fair market value of our common stock on the date of grant. These options have a term of up to 10 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 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 activity. 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 options 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:

	Year Ended December 31,
	2017			2016
Dividend yield		0	%		0	%
Expected life	6.5 years			6.5 years
Expected volatility		52	%		55	%
Risk-free interest rate		1.7	%		1.1	%

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

	Year Ended December 31,
	2017		2016
Cost of revenue— professional engineering service	$	107	$	220
Selling, general and administrative		1,414		868
Research and development		236		159
Total stock-based compensation expense	$	1,757	$	1,247
Per basic share	$	0.14	$	0.10
Per diluted share	$	0.14	$	0.10

Stock option activity

The following table summarizes stock option activity:

						Weighted Average
						Remaining
				Weighted Average		Contractual Life		Aggregate
	Number of Shares			Exercise Price		(in years)		Intrinsic Value
Balance at December 31, 2015		1,778,697		$	4.43		7.83
Granted		903,248		$	5.24
Exercised		(371,845	)	$	3.17
Forfeited		(396,161	)	$	5.32
Expired		(67,171	)	$	5.91
Balance at December 31, 2016		1,846,768		$	4.84		8.19
Granted		248,100		$	5.18
Exercised		(54,692	)	$	3.66
Forfeited		(91,411	)	$	5.31
Expired		(36,604	)	$	5.83
Balance at December 31, 2017		1,912,161		$	4.88		7.61	$	781,735
Vested and expected to vest at December 31, 2017		1,792,667		$	4.85		7.52	$	781,025
Exercisable at December 31, 2017		1,065,767		$	4.48		6.63	$	775,767

At December 31, 2017, total compensation cost related to stock options granted but not yet recognized was approximately $1,016,877, net of estimated forfeitures. This cost will be amortized on the straight-line method over a weighted-average period of approximately 1.50 years.

The following table summarizes certain additional information about stock options:

	Year Ended December 31,
	2017		2016
Weighted average grant-date fair value for options granted during the year	$	2.62	$	2.63
Vested options in-the-money		603,925		605,017
Aggregate intrinsic value of options exercised during the year	$	104,512	$	773,327

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 that were exercised during the periods indicated. We issue new shares of common stock upon exercise of stock options.

Restricted stock unit activity

The following table summarizes RSU activity:

	Number of			Weighted Average
	Shares			Award Price
Unvested at December 31, 2015		104,463		$	5.97
Granted		107,370		$	5.41
Vested		(76,258	)	$	5.81
Forfeited		(15,969	)	$	5.77
Unvested at December 31, 2016		119,606		$	5.60
Granted		79,819		$	4.98
Vested		(82,457	)	$	5.39
Forfeited		—		$	—
Unvested at December 31, 2017		116,968		$	5.33
Expected to vest after December 31, 2017		102,796		$	5.33

At December 31, 2017, total compensation cost related to RSUs granted but not recognized was approximately $237,386, net of estimated forfeitures. This cost will be amortized on the straight-line method over a weighted-average period of approximately 1.12 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 December 31, 2017:

Stock options outstanding			1,912,161
Restricted stock units outstanding			116,968
Stock options available for future grant			1,189,256
Common stock reserved for future issuance			3,218,385