Ekso Bionics Holdings, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Stock-based Compensation

Stock-based Compensation

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

2014 Equity Incentive Plan

In 2014, prior to the Merger, the Board of Directors and a majority of the stockholders adopted the 2014 Equity Incentive Plan, or the 2014 Plan, allowing for the issuance of 2,058 shares of common stock. In June 2015, the 2014 Plan was amended and restated with approval by the stockholders to increase the maximum number of shares issuable by 1,656 shares to an aggregate of 3,714 shares of common stock. In June 2017, the 2014 Plan was further amended with the approval by the stockholders to increase the maximum number of shares issuable under the 2014 Plan by 1,000 shares to an aggregate of 4,714 shares of common stock. In June 2018, the Company’s stockholders ratified an amendment to the 2014 Plan, which was first approved by the stockholders in December 2017, to increase the number of shares available for grant by 4,400 shares. As of December 31, 2018, the total shares authorized for grant under the 2014 Plan was 9,114, of which 1,267 were available for future grants.

Under the terms of the 2014 Plan, the Board of Directors may award stock, options, or similar rights having either a fixed or variable price related to the fair market value of the shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions or any other security with the value derived from the value of the shares. Such awards include stock options, restricted stock, restricted stock units, stock appreciation rights and dividend equivalent rights.

Shares available for future grant under the 2014 Plan was as follows:



	Shares Available For Grant
Available as of December 31, 2017	4,838
Granted	(4,279	)
Forfeited	523
Expired	185
Available as of December 31, 2018	1,267

Stock Options

The Board of Directors may grant stock options under the 2014 Plan at a price of not less than 100% of the fair market value of the Company’s common stock on the date the option is granted. The maximum term of an incentive stock option granted to participants may not exceed ten years. Subject to the limitations discussed above, the Board of Directors determines the term and exercise or purchase price of other awards granted under the 2014 Plan. To date, no incentive stock options have been granted. The Board of Directors also determines the terms and conditions of awards, including the vesting schedule and any forfeiture provisions. Options granted under the 2014 Plan vest upon the passage of time, generally four years, or upon the attainment of certain performance criteria established by the Board of Directors. We may grant options to purchase common stock to non-employees for advisory and consulting services. Upon exercise of a stock option, the Company issues new shares of common stock.

A summary of the stock option activity as of December 31, 2018 and changes during the fiscal year then ended is presented below:



	Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at beginning of year	3,156		$	4.96
Granted	3,925		$	1.93
Exercised	(1	)	$	1.13
Forfeited	(429	)	$	4.67
Expired	(185	)	$	7.91
Outstanding at end of year	6,466		$	3.05	8.34	$	58
Vested and expected to vest	6,466		$	3.05	8.34	$	58
Exercisable at year end	2,149		$	5.22	6.07	$	37

In 2018, the Company received $1 in cash from exercised stock options. The intrinsic value of the options exercised totaled $1 and $86, for the years ended December 31, 2018 and 2017, respectively.

The weighted-average grant date fair value of stock options granted for the years ended December 31, 2018 and 2017 was $1.57 and $1.26, respectively. The total grant date fair value of stock option vested during the years ended December 31, 2018 and 2017 was $1,725 and $2,192, respectively.

As of December 31, 2018, total unrecognized compensation cost related to unvested stock options was $6,007. This amount is expected to be recognized as stock-based compensation expense in the Company’s consolidated statements of operations and comprehensive loss over the remaining weighted average vesting period of 2.9 years.

The following table summarizes information about stock options outstanding as of December 31, 2018:



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Shares	Weighted-Average Remaining Contractual Life (Years)	Weighted Average Price		Number of Shares	Weighted Average Price
$0.49 - $1.59	688	8.44	$	1.17	272	$	1.13
$1.76 - $1.79	1,824	9.50	$	1.76	68	$	1.79
$1.82 - $2.85	2,422	9.09	$	2.16	381	$	2.54
$3.22 - $15.33	1,532	5.80	$	6.85	1,428	$	6.89
	6,466	8.34	$	3.05	2,149	$	5.22

The Company recognizes compensation expense using the straight-line method over the requisite service period. The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes Model under the following assumptions:



	Years Ended December 31,
	2018	2017
Dividend yield	—	—
Risk-free interest rate	2.68% - 3.0%	1.83% - 2.37%
Expected term (in years)	5.27-10	5.27-9.23
Volatility	88%-106%	77%-88%

Restricted Stock Units

Beginning in 2017, the Company started issuing restricted stock units, or RSUs, to employees and non-employees as permitted by the 2014 Plan. Each RSU corresponds to one share of the Company’s common stock and becomes issuable upon vesting. The fair value of RSUs is determined based on the closing price of the Company’s common stock on the date of grant.

RSU activity for the year ended December 31, 2018 is summarized below:



	Number of Shares		Weighted Average Grant- Date Fair Value
Unvested as of January 1, 2018	617		$	1.65
Granted	354		$	1.78
Vested	(599	)	$	1.46
Forfeited	(94	)	$	2.78
Unvested as of December 31, 2018	278		$	1.83

The total grant-date fair value of RSUs that vested in 2018 was $1,026. As of December 31, 2018, $442 of total unrecognized compensation expense related to employee RSUs was expected to be recognized over a weighted average period of 3.43 years.

Compensation Expense

Stock-based compensation is included in the consolidated statements of operations and comprehensive loss in general and administrative, research and development, or sales and marketing expenses, depending upon the nature of services provided. Stock-based compensation expense recorded for stock options and RSUs granted to employees and non-employees was as follows:



	Years Ended December 31,
	2018		2017
Sales and marketing	$	611	$	485
Research and development	426		439
General and administrative	1,831		1,304
Restructuring	—		186
	$	2,868	$	2,414

Employee Stock Purchase Plan

In June 2017, the Company’s stockholders approved the Employee Stock Purchase Plan or the 2017 ESPP. Under the 2017 ESPP, the Company has reserved 500 shares of common stock for issuance, subject to adjustment in the event of a stock split, stock dividend, combination or reclassification or similar event. The 2017 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 25% of their eligible compensation, subject to any plan limitations. The 2017 ESPP provides for six-month offering periods. At the end of each offering period, employees can purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last trading day of the offering period. As of December 31, 2018, the Company had not initiated employee enrollment to the plan.