On May 16, 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”) as the successor to and continuation of the 2013 Equity Incentive Plan (the “2013 Plan”) and the 2004 Equity Incentive Plan (the “2004 Plan”). The 2018 Plan consists of 12.0 million additional shares and the number of unallocated shares remaining available for grant for new awards under the 2013 Plan and the 2004 Plan. The 2018 Plan provides for the granting of stock awards including stock options and restricted stock units to employees, directors and consultants. No additional awards will be granted under the 2013 Plan, the 2004 Plan or the 2004 Non-Employee Directors’ Stock Option Plan (the “NED Plan”) as all future awards will be made out of the 2018 Plan.

The Company’s board of directors determines eligibility, vesting schedules and criteria and exercise prices for stock awards granted under the 2018 Plan. Options and restricted stock unit awards under the 2018 Plan, the 2013 Plan and the 2004 Plan expire not more than ten years from the date of the grant and are exercisable upon vesting. Stock options that vest over time generally vest over four years. Current time-based vesting stock option grants vest and become exercisable at the rate of 25% after one year and ratably on a monthly basis over a period of 36 months thereafter. Restricted stock units with time-based vesting generally vest at a rate of 25% per year over four years with consideration satisfied by service to the Company. The Company also issues stock awards with performance conditions.

The following table summarizes information about the Company’s stock-based award plans as of December 31, 2018:

	Outstanding Options		Outstanding Restricted Stock Units		Shares Available for Future Issuance
2004 Equity Incentive Plan		933,402		—		—
2013 Equity Incentive Plan		5,766,448		691,266		—
2018 Equity Incentive Plan		4,225,603		—		9,211,379
2004 Non-Employee Directors’ Stock Option Plan		50,665		—		—
Total		10,976,118		691,266		9,211,379

Share-based payment transactions are recognized as compensation cost based on the fair value of the instrument on the date of grant. The Company uses the Black-Scholes option valuation model to estimate the grant date fair value of employee stock options. The expected term of an option granted is based on combining historical exercise data with expected weighted time outstanding. Expected weighted time outstanding is calculated by assuming the settlement of outstanding awards is at the midpoint between the remaining weighted average vesting date and the expiration date.

During the years ended December 31, 2018, 2017 and 2016, the Company recorded stock-based compensation expense of $6.9 million, $4.8 million and $5.1 million, respectively.

Total stock-based compensation expense recognized in the accompanying consolidated statements of operations is included in the following categories (in thousands):

	Year Ended December 31,
	2018		2017		2016
Cost of goods sold	$	379	$	460	$	695
Research and development		1,203		1,010		1,309
Selling, general and administrative		5,275		3,377		3,131
Total	$	6,857	$	4,847	$	5,135

The expected volatility assumption used in the Company’s Black-Sholes option valuation model is based on an assessment of the historical volatility, with consideration of implied volatility, derived from an analysis of historical trade activity. The Company has selected risk-free interest rates based on U.S. Treasury securities with an equivalent expected term in effect on the date the options were granted. Additionally, the Company uses historical data and management judgment to estimate stock option exercise behavior and employee turnover rates to estimate the number of stock option awards that will eventually vest. The Company calculated the fair value of employee stock options granted during the years ended December 31, 2018, 2017 and 2016 using the following assumptions:

	Year Ended December 31,
	2018		2017		2016
Risk-free interest rate	2.63% — 3.11%		1.83% — 2.13%		1.18% — 1.80%
Expected lives	5.90 — 7.19 years		5.41 — 5.78 years		5.13 — 5.82 years
Volatility	92.68% — 93.62%		83.32% — 90.39%		77.57% — 82.75%
Dividends		—		—		—

	Number of Shares			Weighted Average Exercise Price per Share		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2018		7,089,440		$	9.33
Granted		5,158,648		$	1.94
Exercised		(6,880	)	$	1.10
Forfeited		(733,536	)		2.87
Expired		(531,554	)	$	20.56
Outstanding at December 31, 2018		10,976,118		$	5.75	$	—
Exercisable at December 31, 2018		3,672,480		$	13.03	$	—

The weighted average grant date fair value of the stock options granted during the years ended December 31, 2018, 2017 and 2016 was $1.51, $1.19 and $3.05 per option, respectively. The total intrinsic value of options exercised during the year ended December 31, 2018 and December 31, 2017 was de minimis. The total intrinsic value of options exercised during the year ended December 31, 2016 was $0.1 million. Intrinsic value is measured using the fair market value at the date of exercise for options exercised or at December 31 for outstanding options, less the applicable exercise price.

Cash received from the exercise of options during the years ended December 31, 2017 and 2016 was approximately $0.01 million and $0.5 million, respectively and for the year ended December 31, 2018 the cash received was de minimis. The weighted-average remaining contractual terms for options outstanding that were vested and expected to vest, options outstanding that were vested and options exercisable at December 31, 2018 was 7.81 years, 5.62 years and 5.57 years, respectively.

As of December 31, 2018, 2017 and 2016, the Company recognized $1.9 million, $0.9 million and $0.3 million of compensation costs related to the performance-based stock options, respectively. As of December 31, 2018, there was $1.3 million of unrecognized compensation costs related to performance-based stock options subject to performance conditions.

A summary of restricted stock unit activity for the year ended December 31, 2018 is presented below:

	Number of Shares			Weighted Average Grant Date Fair Value per Share
Outstanding at January 1, 2018		1,135,216		$	4.08
Granted		448,600			2.02
Vested		(694,831	)		3.47
Forfeited		(197,719	)		2.84
Outstanding at December 31, 2018		691,266		$	3.71

Total intrinsic value of restricted stock units vested during the years ended December 31, 2018, 2017 and 2016 was $1.4 million, $0.4 million and $0.6 million, respectively. Intrinsic value of restricted stock units vested is measured using the closing share price on the day prior to the vest date. The total grant date fair value of restricted stock units vested during the years ended December 31, 2018, 2017 and 2016 was $2.4 million, $1.9 million, and $2.6 million, respectively.

As of December 31, 2018, there was $8.5 million of unrecognized compensation expense related to options and performance-based options and $1.5 million of unrecognized compensation expense related to restricted stock units, respectively, which is expected to be recognized over the weighted average vesting period of 1.7 to 2.9 years. The Company evaluates stock awards with performance conditions as to the probability that the performance conditions will be met and uses that information to estimate the date at which those performance conditions will be met in order to properly recognize stock-based compensation expense over the requisite service period.