Annual report pursuant to Section 13 and 15(d)

Stock Based Compensation

v3.21.1
Stock Based Compensation
12 Months Ended
Dec. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock Based Compensation

Note 8 – Stock Based Compensation

Equity Incentive Plans

2013 Equity Incentive Plan

Effective on May 26, 2020, the Company’s stockholders approved the amendment and restatement of the 2013 Equity Incentive Plan to increase the number of shares reserved for issuance thereunder by 1,200,000 shares, bringing to 7,285,967 the total number of shares approved for issuance under that plan.

As of December 31, 2020, 1,867,169 shares of common stock remain eligible to be issued through equity-based instruments under the 2013 Equity Incentive Plan.

2014 Non-Employee Equity Compensation Plan

Effective on May 26, 2020, the Company’s stockholders approved the amendment and restatement of the 2014 Non-employee Equity Compensation Plan to increase the number of shares reserved for issuance through equity-based instruments thereunder by 800,000 shares, bringing to 1,650,000 the total number of shares approved for issuance under that plan.

As of December 31, 2020, 998,971 shares of common stock remain eligible to be issued through equity-based instruments under the 2014 Non-Employee Equity Compensation Plan.

2015 Performance Share Unit Plan

Effective on May 26, 2020, 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 700,000 shares, bringing to 3,410,104 the total number of shares approved for issuance under that plan.

As of December 31, 2020, 2,131,951 shares of common stock remain eligible to be issued through equity-based instruments under the 2015 Performance Share Unit Plan.

Note 8 – Stock Based Compensation, continued

Equity Incentive Plans, continued

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 for the grant of RSUs. These grants will be administered by the Board or a committee of the Board. 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 December 31, 2020, 139,276 shares of common stock remain available to be issued through equity-based instruments under the 2017 Equity Inducement Plan.

Employee Stock Purchase Plan

In April 2015, the Company’s Board approved the ESPP, under which 600,000 shares of common stock have been reserved for purchase by the Company’s employees, subject to approval by the stockholders. On May 21, 2015, the Company’s stockholders approved the ESPP. Effective on May 26, 2020, the Company’s stockholders approved the amendment and restatement of the Employee Stock Purchase 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. 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 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 December 31, 2020, 140,438 shares of common stock remain eligible to be issued under the ESPP. For the year ended December 31, 2020, eligible employees contributed $417,546 through payroll deductions to the ESPP and 275,312 shares were deemed delivered for the year ended December 31, 2020. For the year ended December 31, 2019, eligible employees contributed $457,362 through payroll deductions to the ESPP and 178,003 shares were deemed delivered for the year ended December 31, 2019.

Stock Option Award Activity

The following is a summary of the Company’s stock option activity during the year ended December 31, 2020:

 

 

 

Number of

Options

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Life In

Years

 

 

Intrinsic

Value

 

Outstanding at January 1, 2020

 

 

550,985

 

 

$

5.67

 

 

 

4.3

 

 

$

2,538

 

Granted

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

 

 

 

 

 

 

 

 

 

 

Forfeited

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at December 31, 2020

 

 

550,985

 

 

$

5.67

 

 

 

3.2

 

 

$

3,384

 

Exercisable at December 31, 2020

 

 

550,985

 

 

$

5.67

 

 

 

3.2

 

 

$

3,384

 

 

As of December 31, 2020, the unamortized value of options was $0.

The aggregate intrinsic value of options exercised was $0 and $55,940 for the years ended December 31, 2020 and 2019, respectively.

No options were granted during the years ended December 31, 2020 and 2019.

Note 8 – Stock Based Compensation, continued

Restricted Stock Units (“RSUs”)

During the year ended December 31, 2020, the Compensation Committee of the Board (“Compensation Committee”) granted various employees RSUs under which the holders have the right to receive an aggregate 674,656 shares of common stock. The majority of these awards, granted under the 2013 Equity Incentive Plan, vest over terms ranging from two to four years.

During the year ended December 31, 2020, the Compensation Committee granted various directors and consultants RSUs under which the holders have the right to receive an aggregate 142,953 shares of common stock. These awards were granted under the 2014 Non-Employee Equity Compensation Plan. The awards granted vest over terms from one to three years.

During the year ended December 31, 2020, the Compensation Committee granted employees RSUs under which the holders have the right to receive 187,500 shares of common stock. The awards, granted under the 2017 Equity Inducement Plan, vest over four years beginning on the anniversary of the grant date.

In accordance with ASC 505-50, the Company estimates the fair value of the unvested portion of the RSU award each reporting period using the closing price of the Company’s common stock.

At December 31, 2020, the unamortized value of the RSUs was $4,467,049. The unamortized amount will be expensed over a weighted average period of 1.3 years. A summary of the activity related to RSUs for the year ended December 31, 2020 is presented below:

 

 

 

Total

 

 

Weighted

Average Grant

Date Fair Value

 

Outstanding at January 1, 2020

 

 

1,821,852

 

 

$

10.05

 

RSUs granted

 

 

1,005,109

 

 

$

1.68

 

RSUs forfeited

 

 

(211,354

)

 

$

7.82

 

RSUs vested

 

 

(1,194,439

)

 

$

7.71

 

Outstanding at December 31, 2020

 

 

1,421,168

 

 

$

6.43

 

 

Performance Share Units (“PSUs”)

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

 

During the year ended December 31, 2020, the Compensation Committee granted various employees PSUs under which the holders have the right to receive an aggregate 267,677 shares of common stock. These awards were granted under the 2015 Performance Share Unit Plan. The awards granted vest upon achievement of Company-wide revenue goals.

Compensation expense amortization for all PSU awards was $(88,348) and $88,348 for the years ended December 31, 2020 and 2019, respectively.

Note 8 – Stock Based Compensation, continued

Performance Share Units (“PSUs”), continued

At December 31, 2020, the unamortized value of all PSUs was $0. A summary of the activity related to PSUs for the year ended December 31, 2020 is presented below:

 

 

 

Total

 

 

Weighted

Average Grant

Date Fair Value

 

Outstanding at January 1, 2020

 

 

428,000

 

 

$

2.09

 

PSUs granted

 

 

267,677

 

 

$

1.27

 

PSUs forfeited

 

 

(695,677

)

 

$

1.77

 

PSUs vested

 

 

 

 

$

 

Outstanding at December 31, 2020

 

 

 

 

$

 

 

Employee Stock Purchase Plan (“ESPP”)

During the years ended December 31, 2020 and 2019, there were two offering periods per year for the ESPP. The first offering period started on January 1 of each year and concluded on June 30 of each year. The second offering period started on July 1 of each year and concluded on December 31 of each year.

The weighted-average grant-date fair value of the purchase option for each designated share purchased under this plan was approximately $1.18 and $2.02 during the years ended December 31, 2020 and 2019, 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 stock-based compensation expense for the plan of $329,461 and $368,021 for the years ended December 31, 2020 and 2019, respectively.

The Company estimated the fair value of the purchase options granted during the years ended December 31, 2020 and 2019 using the Black-Scholes option pricing model. The fair values of the purchase options granted were estimated using the following assumptions:

 

 

For the Year Ended

December 31, 2020

Stock price range

$

1.77 – 2.96

 

Dividend yield

 

0

%

Expected volatility range

 

61 – 182

%

Risk-free interest rate range

 

0.17 – 1.57

%

Expected life

 

6 months

 

 

 

 

 

 

For the Year Ended

December 31, 2019

Stock price range

$

4.27 – 5.79

 

Dividend yield

 

0

%

Expected volatility range

 

83 – 96

%

Risk-free interest rate range

 

2.10 – 2.53

%

Expected life

 

6 months

 

 

 

 

 

 

 

Note 8 – Stock Based Compensation, continued

Stock-Based Compensation Expense

The following tables summarize total stock-based compensation costs recognized for years ended December 31, 2020 and 2019:

 

 

 

For the Years Ended December 31,

 

 

 

2020

 

 

2019

 

RSUs

 

$

7,656,857

 

 

$

10,190,211

 

PSUs

 

 

(88,348

)

 

 

88,348

 

ESPP

 

 

329,461

 

 

 

368,021

 

Total

 

$

7,897,970

 

 

$

10,646,580

 

 

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

 

 

 

For the Years Ended December 31,

 

 

 

2020

 

 

2019

 

Research and development

 

$

3,933,292

 

 

$

5,419,627

 

Sales and marketing

 

 

1,504,724

 

 

 

1,561,319

 

General and administrative

 

 

2,459,954

 

 

 

3,665,634

 

Total

 

$

7,897,970

 

 

$

10,646,580