Quarterly report pursuant to Section 13 or 15(d)

Stock Based Compensation

v3.19.2
Stock Based Compensation
6 Months Ended
Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock Based Compensation

Note 6 – Stock-Based Compensation

Equity Incentive Plans

2013 Equity Incentive Plan

Effective on May 16, 2018, the Company’s stockholders approved the amendment and restatement of the 2013 Equity Incentive Plan to increase the number of shares reserved for issuance through equity-based instruments thereunder by 1,600,000 shares, bringing to 6,085,967 the total number of shares approved for issuance under that plan. 

As of June 30, 2019, 1,628,225 shares of common stock remain available to be issued under the 2013 Equity Incentive Plan.

2014 Non-Employee Equity Compensation Plan

Effective on May 16, 2018, the Company’s stockholders approved the amendment and restatement of the 2014 Equity Incentive Plan to increase the number of shares reserved for issuance through equity-based instruments thereunder by 250,000 shares, bringing to 850,000 the total number of shares approved for issuance under that plan.

As of June 30, 2019, 208,842 shares of common stock remain available to be issued through equity-based instruments under the 2014 Non-Employee Equity Compensation Plan.

2015 Performance Share Unit Plan

Effective on May 16, 2018, the Company’s stockholders approved the amendment and restatement of the 2015 Performance Share Unit Plan to increase the number of shares reserved for issuance through equity-based instruments thereunder by 1,400,000 shares, bringing to 2,710,104 the total number of shares approved for issuance under that plan.

 

As of June 30, 2019, 1,431,951 shares of common stock remain available to be issued through equity-based instruments under the 2015 Performance Share Unit Plan.

 

2017 Equity Inducement Plan

 

On December 28, 2017, the Board approved the 2017 Equity Inducement Plan. Under the plan, the Board reserved 600,000 shares of common stock for the grant of RSUs. These grants will be administered by a committee of the Board or the Board acting as a committee. These awards will be granted to individuals who (a) are being hired as an employee by the Company or any subsidiary and such award is a material inducement to such person being hired; (b) are being rehired as an employee following a bona fide period of interruption of employment with the Company or any subsidiary; or (c) will become an employee of the Company or any subsidiary in connection with a merger or acquisition.

 

As of June 30, 2019, 308,469 shares of common stock remain available to be issued through equity-based instruments under the 2017 Equity Inducement Plan.

Note 6 – Stock-Based Compensation, continued

Equity Incentive Plans, continued

Employee Stock Purchase Plan

In April 2015, the Company’s Board approved the ESPP, under which 600,000 shares of common stock were reserved for purchase by the Company’s employees, and on May 21, 2015, the Company’s stockholders approved the ESPP. Under the ESPP, employees may designate an amount not less than 1% but not more than 10% of their annual compensation for the purchase of Company shares. No more than 7,500 shares may be purchased by an employee under the ESPP during an offering period. An offering period shall be six months in duration commencing on or about January 1 and July 1 of each year. The exercise price of the purchase option will be the lesser of 85% of the fair market of the common stock on the first business day of the offering period and 85% of the fair market value of the common stock on the applicable exercise date.

As of June 30, 2019, 257,988 shares of common stock remain available to be issued under the ESPP. As of June 30, 2019, employees have contributed $318,589 through payroll withholdings to the ESPP for the current offering period. Shares will be deemed delivered on June 30, 2019 for the current offering period.

Stock Option Activity

The following is a summary of the Company’s stock option activity during the six months ended June 30, 2019:

 

 

 

Number of

Options

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Life In

Years

 

 

Intrinsic

Value

 

Outstanding at January 1, 2019

 

 

656,494

 

 

$

5.57

 

 

 

4.6

 

 

$

252,887

 

Granted

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

(80,201

)

 

 

4.99

 

 

 

 

 

 

 

Forfeited

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at June 30, 2019

 

 

576,293

 

 

$

5.65

 

 

 

4.8

 

 

$

104,601

 

Exercisable at January 1, 2019

 

 

656,494

 

 

$

5.57

 

 

 

4.6

 

 

$

252,887

 

Vested

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

(80,201

)

 

 

4.99

 

 

 

 

 

 

 

Forfeited

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at June 30, 2019

 

 

576,293

 

 

$

5.65

 

 

 

4.8

 

 

$

104,601

 

 

As of June 30, 2019, the unamortized value of options was $0.     

 

 

Note 6 – Stock Based Compensation, continued

Restricted Stock Units (“RSUs”)                                                          

During the six months ended June 30, 2019, the Compensation Committee granted various directors and consultants RSUs covering 157,987 shares of common stock under the 2014 Non-Employee Equity Compensation Plan. The awards vest over terms from one to three years.

During the six months ended June 30, 2019, the Compensation Committee granted various employees RSUs covering 311,750 shares of common stock under the 2013 Equity Incentive Plan. The awards vest over terms ranging from one to four years.

During the six months ended June 30, 2019, the Compensation Committee granted employees RSUs covering 25,500 shares of common stock under the 2017 Equity Inducement Plan. The awards vest over four years.

As of June 30, 2019, the unamortized value of the RSUs was $18,182,223. The unamortized amount will be expensed over a weighted average period of 1.9 years. A summary of the activity related to RSUs for the six months ended June 30, 2019 is presented below:

 

 

 

Total

 

 

Weighted

Average

Grant

Date Fair

Value

 

Outstanding at January 1, 2019

 

 

2,469,174

 

 

$

15.07

 

RSUs granted

 

 

495,237

 

 

$

6.15

 

RSUs forfeited

 

 

(391,130

)

 

$

14.99

 

RSUs vested

 

 

(623,743

)

 

$

14.94

 

Outstanding at June 30, 2019

 

 

1,949,538

 

 

$

12.86

 

 

Performance Share Units (“PSUs”)

Performance share units (“PSUs”) are grants that vest upon the achievement of certain performance goals. The performance goals are related to the Company’s market capitalization or market price of the common stock.

Amortization for all PSU awards was $0 and $204,954 for the three months ended June 30, 2019 and 2018, respectively, and $0 and $407,656 for the six months ended June 30, 2019 and 2018, respectively.

At June 30, 2019, all PSUs had either vested or expired and were no longer outstanding.

    

Employee Stock Purchase Plan (“ESPP”)

The recently completed offering period under the ESPP was January 1, 2019 through June 30, 2019. During the year ended December 31, 2018, there were two offering periods for the ESPP. The first offering period started on January 1, 2018 and concluded on June 30, 2018. The second offering period started on July 1, 2018 and concluded on December 31, 2018.  

The weighted-average grant-date fair value of the purchase option for each designated share purchased under this plan was approximately $2.43 and $13.84 for the six months ended June 30, 2019 and 2018, respectively, which represents the fair value of the option, consisting of three main components: (i) the value of the discount on the enrollment date, (ii) the proportionate value of the call option for 85% of the stock and (iii) the proportionate value of the put option for 15% of the stock. The Company recognized compensation expense for the plan of $122,749 and $253,201 for the three months ended June 30, 2019 and 2018, respectively, and $210,574 and $407,746 for the six months ended June 30, 2019 and 2018, respectively.

Note 6 – Stock Based Compensation, continued

Employee Stock Purchase Plan (“ESPP”), continued

The Company estimated the fair value of ESPP purchase options granted during the six months ended June 30, 2019 and 2018 using the Black-Scholes option pricing model. The fair values of stock options granted were estimated using the following assumptions:

 

 

 

Six Months Ended

June 30, 2019

 

 

Six Months Ended

June 30, 2018

 

Stock price

 

$

5.79

 

 

$

22.34

 

Dividend yield

 

 

0

%

 

 

0

%

Expected volatility

 

 

96

%

 

 

177

%

Risk-free interest rate

 

 

2.51

%

 

 

1.61

%

Expected life

 

6 months

 

 

6 months

 

 

 

Stock-Based Compensation Expense

The following tables summarize total stock-based compensation costs recognized for the three and six months ended June 30, 2019 and 2018:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

RSUs

 

 

2,675,184

 

 

$

3,884,725

 

 

 

5,758,751

 

 

$

8,136,686

 

 

PSUs

 

 

 

 

 

204,954

 

 

 

 

 

 

407,656

 

 

ESPP

 

 

122,749

 

 

 

253,201

 

 

 

210,574

 

 

 

407,746

 

 

Total

 

$

2,797,933

 

 

$

4,342,880

 

 

$

5,969,325

 

 

$

8,952,088

 

 

 

The total amount of stock-based compensation was reflected within the statements of operations as:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

Research and development

 

$

1,361,225

 

 

$

2,483,693

 

 

$

3,017,778

 

 

$

5,542,223

 

 

Sales and marketing

 

 

343,945

 

 

 

388,533

 

 

 

720,993

 

 

 

669,891

 

 

General and administrative

 

 

1,092,763

 

 

 

1,470,654

 

 

 

2,230,554

 

 

 

2,739,974

 

 

Total

 

$

2,797,933

 

 

$

4,342,880

 

 

$

5,969,325

 

 

$

8,952,088