NOTE 12. EMPLOYEE EQUITY-BASED COMPENSATION

The following table summarizes option activity under all plans during the three months ended March 31, 2019:



	Number of Shares		Weighted Average Exercise Price per Share
Options Outstanding January 1, 2019	8,090,636		$	12.22
Granted	1,468,949		11.66
Forfeited	(169,423	)	21.05
Exercised	(208,044	)	17.68
Expired	(22,576	)	23.27
Options Outstanding March 31, 2019	9,159,542		$	11.81

The table below summarizes the resulting weighted average inputs used to calculate the estimated fair value of options awarded during the periods shown below:



	Three Months Ended
	March 31,			March 31,
	2019			2018
Expected term (in years)	6.17			6.11
Volatility	62		%	68		%
Expected dividends	—			—
Risk free interest rates	2.59		%	2.69		%
Weighted average fair value	$	6.90		$	16.25

The following table shows summary information for outstanding options and options that are exercisable (vested) as of March 31, 2019:



	Options Outstanding		Options Exercisable
Number of options	9,159,542		5,987,089
Weighted average remaining contractual term (in years)	6.08		4.63
Weighted average exercise price	$	11.81	$	8.75
Weighted average fair value	$	7.91	$	5.95
Aggregate intrinsic value (in thousands)	$	92,541	$	76,978

The following table summarizes RSU and restricted stock award activity during the three months ended March 31, 2019:



	Number of Shares		Weighted Average Grant Date Fair Value per Share
Outstanding January 1, 2019	76,000		$	18.70
Granted	11,000		20.32
Forfeited	(50,000	)	20.80
Vested/released	(7,000	)	19.47
Outstanding March 31, 2019	30,000		15.62

Equity-based compensation is summarized below (in thousands):



	Three Months Ended
	March 31,		March 31,
	2019		2018
Cost of sales	$	55	$	46
Research and development	1,527		1,612
Sales, general and administrative	1,815		3,944
Equity-based compensation expense	$	3,397	$	5,602

During the three months ended March 31, 2019 and 2018, $0.1 million and $0.2 million, respectively, of share-based compensation cost was capitalized to inventory or inventory transfered to property and equipment (also referred to as instruments).

As of March 31, 2019, unrecognized equity-based compensation expense related to unvested stock options and unvested RSUs was $22.5 million and $0.4 million, respectively. This is expected to be recognized over the years 2019 through 2024.

Included in the above-noted stock option grants and stock compensation expense are performance-based stock options which vest only upon the achievement of certain targets. Performance-based options are generally granted at-the-money, contingently vest over a period of 1 to 2 years, depending on the nature of the performance goal, and have contractual lives of 10 years. These options were valued in the same manner as the time-based options, with the assumption that performance goals will be achieved. The inputs for expected volatility, expected dividends, and risk-free rate used in estimating those options’ fair value are the same as the time-based options issued under the plan. The expected term for performance-based options granted in 2018 is 5 to 6 years. However, the Company only recognizes stock compensation expense to the extent that the targets are determined to be probable of being achieved, which triggers the vesting of the performance options. In 2018, the Company granted 225,000 performance based-options to certain employees. The Company recognized $0.1 million of stock compensation expense for the three months ended March 31, 2019 for performance-based stock options.