In May 2006, the Company adopted the 2006 Employee, Director, and Consultant Stock Plan (the “2006 Plan’) under which the Company is authorized to grant stock awards to employees, directors, and consultants of the Company. The Company is authorized to grant incentive stock options, non‑statutory stock options, restricted stock awards, restricted stock unit awards, and stock appreciation rights up to 831,389 total shares of stock awards. The award price and vesting terms are determined by the Board of Directors of the Company and evidenced in the award agreement extended to the employee, director, or consultant. The options granted generally terminate ten years from the date of grant and vest over various periods as determined by the Board of Directors of the Company.

In February 2016, the Company adopted the 2016 Equity Incentive Plan (“2016 Plan’) as a successor to and continuation of the 2006 Plan. As of February 2016, no additional stock awards may be granted under the 2006 Plan and any unallocated shares remaining available for issuance pursuant to the exercise of options or issuance or settlement of stock awards not previously granted under the 2006 Plan will cease to be available under the 2006 Plan and will be added to the share reserve of the 2016 Plan and be

immediately available for issuance pursuant to the stock awards granted in the 2016 Plan. In addition, all outstanding stock awards granted under the 2006 Plan will remain subject to the terms of the 2006 Plan unless they expire, terminate or are forfeited, cancelled or otherwise returned to the Company and will immediately be added to the share reserve and become available for issuance under the 2016 Plan.

Under the 2016 Plan, the Company is authorized to grant stock awards to employees, directors, and consultants of the Company. The Company is authorized to grant incentive stock options, non‑statutory stock options, restricted stock awards, restricted stock unit awards, and stock appreciation rights up to 1,431,964 total shares, plus any shares subject to outstanding stock awards granted under the 2006 Plan. The award price and vesting terms are determined by the Board of Directors of the Company and evidenced in the award agreement extended to the employee, director, or consultant. The options granted generally terminate 10 years from the date of grant and vest over various periods as determined by the Board of Directors of the Company.

The following table presents the activity for options and restricted stock units (RSUs) outstanding (in thousands, except for weighted average exercise price and weighted average grant date value per share):

	Stock Options			Weighted Average Exercise Price		RSUs		Weighted Average Grant Date Value Per Share
Outstanding ‑ December 31, 2019		1,916		$	1.73		26	$	0.78
Granted		829			2.67		53		0.78
Forfeited/canceled		(40	)		0.83		—		—
Exercised		(35	)		0.53		—		—
Outstanding ‑ September 30, 2020		2,670		$	2.05		79	$	0.78

The following table presents the composition of options outstanding and exercisable as of September 30, 2020 (in thousands, except price and life):

	Options Outstanding						Options Exercisable
					Life
Exercise Prices	Number		Price*		(years)*		Number		Price*
$0.42 - $0.83		1,922	$	0.65		7.9		711	$	0.65
$2.61 - $3.74		157		3.15		2.7		136		3.38
$4.39 - $4.45		113		4.39		4.0		113		4.39
$6.83		478		6.83		9.2		307		6.83
Total ‑ September 30, 2020		2,670	$	2.05		7.7		1,267	$	2.79

* Price and Life reflect the weighted average exercise price and weighted average remaining contractual life, respectively.

There were 79,000 and 26,000 restricted stock units outstanding at September 30, 2020 and December 31, 2019, respectively, none of which had vested as of September 30, 2020.

Prior to the Company’s IPO, the fair value of the Company’s common stock underlying the stock options was determined by the Board of Directors with assistance from management and, in part, on input from an independent third-party valuation firm. The Board of Directors determines the fair value of common stock by considering a number of objective and subjective factors, including valuations of comparable companies, sales of convertible preferred stock, operating and financial performance, the lack of liquidity of the Company’s common stock and the general and industry-specific economic outlook. Subsequent to the Company’s IPO, the fair value of the Company’s common stock is determined based on its closing market price.

The fair value of each option grant is estimated on the date of grant using the Black‑Scholes option pricing model with the following weighted average assumptions for the nine months ended September 30, 2020 (dollars in thousands):

The Company estimates volatility based on the historical volatility of its peer group and average expected life based on the review of historical exercise behavior of option grants with similar vesting periods. The expense recorded for options granted under the 2016 Plan is net of estimated forfeitures of 10%.

The following table presents the impact of employee stock-based compensation expense on statements of income line items for the periods indicated (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Research and development	$	10	$	10	$	20	$	25
Sales, marketing, general and administrative		90		35		135		100
Total stock-based compensation expense	$	100	$	45	$	155	$	125

The unrecognized remaining stock‑based compensation balance for shares issued inside of the 2016 Plan was approximately $0.5 million as of September 30, 2020 which will be amortized over the next three years.

As of September 30, 2020, the Company has issued a total of 205,199 stock options outside the 2006 Plan to employees of the Company. These options are issued at the discretion of the Board of Directors of the Company to the Chief Executive Officer and their direct reports who wish to convert all or a portion of their incentive compensation to options. The value of the options at the date of grant was calculated using the Black‑Scholes option pricing model using approximately the same assumptions as in the previous table other than the term, which is approximately five years. As of September 30, 2020, 173,233 options outside of the 2006 Plan are outstanding and exercisable and have a weighted average exercise price of $11.11, a weighted average remaining life of six years, and were fully vested on the grant date. There was no unrecognized remaining stock‑based compensation balance for shares issued outside of the 2006 Plan as of September 30, 2020.