(11) Stock-Based Compensation

Stock Incentive Plan – Stock Options

Juniper granted options to purchase 293,500 and 680,400 shares of common stock to employees during the six months ended June 30, 2018 and 2017, respectively. There were no options granted to non-employees during the six months ended June 30, 2018 and 2017. Stock options granted to employees typically vest over a four-year term and options granted to non-employee directors typically vest over a three-year term.

The Company uses the Black-Scholes option pricing model to determine the estimated grant date fair values for stock-based awards. The Black-Scholes option pricing model requires the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The Company’s assumptions do not include an estimated forfeiture rate.

The weighted-average grant date fair values of options granted to employees during the six months ended June 30, 2018 and 2017 were $3.40 and $2.43, respectively, using the following assumptions:

	Six Months Ended June 30,
	2018	2017
Risk free interest rate	2.15%	1.45% - 1.59%
Expected term	4.75 years	4.5 - 4.75 years
Dividend yield	—	—
Expected volatility	47.79% - 47.86%	53.15% - 55.20%

The Company records stock-based compensation expense for stock options granted to non-employees based on the fair value of the stock options, which is re-measured over the graded vesting term resulting in periodic adjustments to stock-based compensation expense. The stock-based compensation expense recorded for non-employees has historically been reflected in the research and development line of the statement of operations and is remeasured on a quarterly basis from the date of grant. The Company did not record any stock-based expense for non-employee awards during the three or six months ended June 30, 2018 as all options were fully vested. During the three and six months ended June 30, 2017, the Company recorded a reduction of stock-based compensation expense of $0.1 million for non-employee options as a result of changes in the fair value of the options during the period.

Stock Option Plan – Restricted Stock

Juniper granted 122,300 and 5,625 time-based restricted stock units to employees and non-employee directors, respectively, during the six months ended June 30, 2018. The Company granted 52,700 time-based restricted stock units to employees and 51,234 to non-employee directors during the six months ended June 30, 2017. The weighted-average grant date fair value of the time-based restricted stock units was $8.18 and $5.11 per share during the six months ended June 30, 2018 and 2017, respectively. The Company recognizes stock-based compensation expense for time-based restricted stock units over the vesting period. There were 9,300 time-based restricted stock units that vested during the six months ended June 30, 2018. No time-based restricted stock units vested during the six months ended June 30, 2017.

The Company granted 186,000 performance-based restricted stock units to employees during the six months ended June 30, 2017. No additional performance-based restricted stock units were granted during the six months ended June 30, 2018. These performance-based restricted stock units vest based upon the occurrence of certain operational and strategic events that were determined by the Company’s Board of Directors and approved by the Company’s Compensation Committee. The Company considers the performance criteria at each balance sheet date and recognizes stock-based compensation expense for those criteria considered probable. During the year ended and at December 31, 2017, 109,550 performance-based restricted stock units expired. At December 31, 2017, performance-based restricted stock units outstanding totaled 76,450. On January 8, 2018, the Company announced the 4.5-year extension of its supply agreement for Crinone with an affiliate of Merck KGaA, Darmstandt, Germany. On February 7, 2018, the Company’s Compensation Committee of the Board of Director approved the vesting of 27,800 awards affiliated with this performance condition and as a result the Company recorded a charge to stock compensation expense during the first quarter of 2018 totaling $0.1 million. At June 30, 2018, performance-based restricted stock units outstanding totaled 48,650. The expense recognition for these awards commences when achievement of the operational or strategic events becomes probable over the remaining service period. In the second quarter, the Company determined the achievement of one remaining performance criteria associated with a targeted organic revenue growth of Juniper Pharma Services, totaling 20,850 restricted stock units, was probable and as a result recognized $36,000 in stock-based compensation expense during the three months ended June 30, 2018.

Stock-based compensation relates to options granted to employees, non-employee directors and non-employees, time-based restricted stock units granted to employees and non-employee directors and performance-based restricted stock units granted to employees. Stock-based compensation expense for the three months ended June 30, 2018 and 2017 was $0.5 million and $0.5 million, respectively. Stock-based compensation expense for the six months ended June 30, 2018 and 2017 was $1.1 million and $0.8 million, respectively. Total stock-based compensation expense was recorded to cost of revenues and operating expenses based upon the functional responsibilities of the individuals holding the respective awards as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Cost of revenues	$	39	$	31	$	77	$	59
Sales and marketing		12		12		25		23
Research and development		40		71		58		28
General and administrative		412		390		909		735
Total	$	503	$	504	$	1,069	$	845

There were 230,626 of stock option exercised during the six months ended June 30, 2018 for which the Company received $1.4 million. There were no option exercises during the six months ended June 30, 2017.

As of June 30, 2018, the total unrecognized compensation cost related to outstanding stock options and time-based restricted stock units expected to vest was $3.6 million, which the Company expects to recognize over a weighted-average period of 2.58 years.