AKAO 2017 Annual Report

131 Company’s history of not paying dividends and its expectation that it will not declare dividends for the foreseeable future. Stock Options and Restricted Stock Units Granted to Non-Employees During the years ended December 31, 2017 and 2016, the Company granted to non-employees an option to purchase 3,000 and 15,000 shares of common stock, respectively, and 1,500 and zero RSUs, respectively, that vest upon achievement of certain performance-based targets. The Company did not grant stock options or restricted stock units to non-employees during the year ended December 31, 2015. The Company recorded non-employees stock- based compensation expense of approximately $0.5 million and $0.1 million for the years ended December 31, 2017and 2016. The Company measures the estimated fair value of the award for each period until the award is fully vested. The fair value of options granted to non-employees during the years ended December 31, 2017 and 2016 was estimated using Black-Scholes with the following assumptions: Year Ended December 31, 2017 2016 Expected term ................................................................................. 0.25 – 9.39 years 0.8 – 1.0 years Expected volatility .......................................................................... 48 - 80% 63 – 125% Risk-free interest rate...................................................................... 0.9 – 2.4% 0.6 – 0.9% Expected dividend yield ................................................................. —% —% Restricted Stock Units Granted to Employees During the years ended December 31, 2017, 2016 and 2015, the Company granted restricted stock units (“RSUs”) to employees to purchase 544,185, 380,500 and 291,525 shares of common stock, respectively, under the stock plans with a weighted-average estimated grant-date fair value of $20.61, $4.01 and $7.76 per share, respectively. RSUs generally vest annually over a 4-year service period and vesting is contingent on continued service. As of December 31, 2017, there were unrecognized compensation costs of $11.0 million related to outstanding RSUs, which are expected to be recognized over a weighted-average period of 2.74 years. A summary of RSU activity is as follows: RSU Awards Outstanding Number of Shares Weighted-Average Grant Date Fair Market Value Aggregate Intrinsic Value (in thousands) Balance, December 31, 2014 ....................................... 168,200 $ 9.33 $ 2,195 RSUs granted.......................................................... 291,525 $ 7.76 RSUs released......................................................... (38,376) $ 9.42 RSUs cancelled....................................................... (49,325) $ 9.80 Balance, December 31, 2015 ....................................... 372,024 $ 8.02 $ 2,135 RSUs granted.......................................................... 380,500 $ 4.01 RSUs released......................................................... (89,722) $ 8.22 RSUs cancelled....................................................... (57,750) $ 6.71 Balance, December 31, 2016 ....................................... 605,052 $ 5.60 $ 7,878 RSUs granted.......................................................... 544,185 $ 20.61 RSUs released......................................................... (185,889) $ 6.24 RSUs cancelled....................................................... (72,116) $ 9.22 Balance, December 31, 2017 ....................................... 891,232 $ 14.34 $ 9,572 Stock Options and Restricted Stock Units Granted to Employees that Contain Performance Conditions During the years ended December 31, 2017, 2016 and 2015, the Company granted options to purchase an aggregate of 184,200, 354,250 and zero shares of common stock, respectively, that vest upon the achievement of market-based common stock targets. During the years ended December 31, 2017, 2016 and 2015, the Company granted 35,050, 59,925 and zero RSUs, respectively, that vest upon the achievement of market-based common stock price targets.