Annual report pursuant to Section 13 and 15(d)

Stock-based Compensation

v3.19.3.a.u2
Stock-based Compensation
 12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
Stock-based Compensation
Stock-based Compensation

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. The 2014 Plan has since been amended and restated with approval by the stockholders to increase the maximum number of shares issuable, as shown in the table below:
Original share pool
2,058

2015 increase
1,656

June 2017 increase
1,000

December 2017 increase (ratified in June 2018)
4,400

2019 increase
3,500

Total share authorized for grant as of December 31, 2019
12,614



As of December 31, 2019, the total shares authorized for grant under the 2014 Plan was 12,614, of which 1,798 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, 2018
1,267

Granted
(4,344
)
Forfeited
938

Expired
437

Share pool increase
3,500

Available as of December 31, 2019
1,798



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. The Company 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 during the year ended December 31, 2019 is presented below:
 
Options
Outstanding
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic
Value
Outstanding at beginning of year
6,466

 
$
3.05

 
 
 
 
Granted
2,414

 
$
0.85

 
 
 
 
Exercised
(186
)
 
$
1.23

 
 
 
 
Forfeited
(846
)
 
$
2.02

 
 
 
 
Expired
(437
)
 
$
3.94

 
 
 
 
Outstanding at end of year
7,411

 
$
2.44

 
8.08
 
$
—

Vested and expected to vest
7,411

 
$
2.44

 
8.08
 
$
—

Exercisable at year end
3,258

 
$
3.86

 
6.31
 
$
—



In 2019, the Company received $228 in cash from exercised stock options. The intrinsic value of the options exercised totaled $233 and $1, for the years ended December 31, 2019 and 2018, respectively.

The weighted-average grant date fair value of stock options granted for the years ended December 31, 2019 and 2018 was $0.68 and $1.57, respectively. The total grant date fair value of stock option vested during the years ended December 31, 2019 and 2018 was $2,602 and $1,725, respectively.

As of December 31, 2019, total unrecognized compensation cost related to unvested stock options was $4,172. 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 2.7 years.

The following table summarizes information about stock options outstanding as of December 31, 2019:
 
 
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 - $0.61
 
1,768

 
9.7
 
$
0.61

 
64

 
$
0.56

$1.13 - $1.79
 
1,970

 
8.67
 
$
1.54

 
742

 
$
1.59

$1.82 - $2.33
 
1,773

 
8.6
 
$
1.97

 
829

 
$
1.99

$2.68 - $15.33
 
1,900

 
5.46
 
$
5.52

 
1,623

 
$
5.99

 
 
7,411

 
8.08
 
$
2.44

 
3,258

 
$
3.86



The Company recognizes compensation expense using the straight-line method over the requisite service period. The share fair value of each stock option was determined on the date of grant using the Black-Scholes Model under the following assumptions:
 
Years Ended December 31,
 
2019
 
2018
Dividend yield
—
 
—
Risk-free interest rate
1.67% - 2.45%
 
2.68% - 3.0%
Expected term (in years)
6.08
 
5.27-10
Volatility
100%-103%
 
88%-106%


Restricted Stock Units

The Company issues restricted stock units, or RSUs, to employees and non-employee service providers. Each RSU represents the right to receive one share of the Company’s common stock upon vesting and subsequent settlement. 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, 2019 is summarized below:

 
Number of
Shares
 
 Weighted
Average Grant-
Date Fair Value
Unvested as of January 1, 2019
278

 
$
1.83

Granted
1,763

 
$
0.94

Vested
(621
)
 
$
1.66

Forfeited
(92
)
 
$
1.93

Unvested as of December 31, 2019
1,328

 
$
0.72



The total grant-date fair value of RSUs that vested in 2019 was $1,001. As of December 31, 2019, $895 of total unrecognized compensation expense related to unvested RSUs was expected to be recognized over a weighted average period of 3.60 years.

Additionally, during the year ended December 31, 2019, the Compensation Committee of the Board of Directors issued an aggregate 1,145 RSUs to the Company's executives and other officers, which are contingent on the later of the Company receiving the stockholder approval of an increase to the number of shares authorized to be issued under the 2014 Plan at the next stockholder meeting and the filing of a registration statement on Form S-8 with the SEC. If stockholder approval is not obtained at the next stockholder meeting, or if a registration statement on Form S-8 is not filed with the SEC and made effective by the date on which the 2014 Plan expires or on which the applicable executive or officer ceases to provide services to the Company, the executive RSUs applicable to such executive or officer shall be automatically cancelled and not granted.

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 related to stock options and RSUs granted to employees and non-employees was as follows:

 
Years Ended December 31,
 
2019
 
2018
Sales and marketing
$
653

 
$
611

Research and development
241

 
426

General and administrative
1,361

 
1,831

 
$
2,255

 
$
2,868



Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan, or ESPP. Under the ESPP, the Company has 500 shares of common stock reserved for issuance, subject to adjustment in the event of a stock split, stock dividend, combination or reclassification or similar event. The 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 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, 2019, the Company had not initiated employee enrollment to the plan.