Stock-Based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Employee Stock Options Valuation

The fair value of employee and director stock options was estimated at the date of grant using the Black-Scholes option pricing model with the weighted average assumptions below.

	Three Months Ended March 31,
	2019
Expected term (in years)	6.1
Expected volatility	45.0	%
Risk-free interest rate	2.40	%
Dividend yield	—	%

        The Company did not grant stock options during the three months ended March 31, 2020.

Stock-Based Compensation

The following table summarizes the total stock-based compensation expense included in the statements of operations and comprehensive loss for all periods presented (in thousands):

	Three Months Ended March 31,
	2020		2019
Cost of revenue	$	—	$	88
Research and development	741		873
Selling, general and administrative	(436)		3,895
Total stock-based compensation expense	$	305	$	4,856

As of March 31, 2020, there was total unamortized compensation costs of $7.6 million, net of estimated forfeitures, related to unvested stock options which the Company expects to recognize over a period of approximately 1.5 years, $58.1 million, net of estimated forfeitures, related to unrecognized restricted stock unit (“RSU”) expense, which the Company expects to recognize over a period of 2.4 years, and $0.5 million unrecognized ESPP expense, which the Company will recognize over 0.7 years.

Performance based RSUs (“PRSU”)

The Company grants PRSUs to key executives of the Company. PRSUs can be earned in accordance with the performance equity program for each respective grant.

In February 2019, the company granted PRSU's that are earned based on the compound annual growth rate ("CAGR") of fiscal year 2020's revenue compared to fiscal year 2018's revenue, measuring a minimum performance threshold of 75% to earn 50% of target, and a maximum threshold of 125% achieved to earn 200% of target.

In February 2020, the company granted PRSU's for fiscal year 2022's annual unit volume CAGR compared to fiscal year 2019's annual unit volume CAGR, measuring a minimum performance threshold of 19.7% to earn 50% of target, and a maximum threshold of 29% achieved to earn 200% of target.

The exact number of earned shares for both grants will be determined based on linear interpolation using the actual results as they fall between the minimum and maximum thresholds outlined above.

Due to the impact of the COVID-19 pandemic, management has determined that as of March 31, 2020, the Company’s achievement of its performance targets described above, is not probable. PRSU expense of $4.8 million recognized in fiscal year 2019 has been reversed and no PRSU expense has been recognized in the first quarter of 2020.

The following table presents key terms of outstanding PRSU awards (in thousands except for share amounts and percentages):

Grant Year	PRSU Performance Period	Performance %	PRSU Shares Granted	Fair Value of PRSU Shares Granted		Cumulative Expense Recognized for PRSUs
2019	2018 - 2020	—%	159,314	$	15,160	$	—
2020	2019 - 2022	—%	133,834	10,993		—
			293,148	$	26,153	$	—