Annual report pursuant to Section 13 and 15(d)

Stock Based Compensation

v3.22.1
Stock Based Compensation
12 Months Ended
Dec. 31, 2021
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 June 16, 2021, 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 1,500,000 shares, bringing to 8,785,967 the total number of shares approved for issuance under that plan.

As of December 31, 2021, 1,779,806 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, 2021, 872,422 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 June 16, 2021, 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 1,700,000 shares, bringing to 5,110,104 the total number of shares approved for issuance under that plan.

As of December 31, 2021, 2,411,013 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, 2021, 133,551 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 June 16, 2021, 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 700,000 shares, bringing to 1,550,000 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, 2021, 547,548 shares of common stock remain eligible to be issued under the ESPP. For the year ended December 31, 2021, eligible employees contributed $384,126 through payroll deductions to the ESPP and 292,890 shares were deemed delivered for the year ended December 31, 2020. 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.

Stock Option Award Activity

The following is a summary of the Company’s stock option activity during the year ended December 31, 2021:

 

 

 

Number of

Options

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Life In

Years

 

 

Intrinsic

Value

 

Outstanding at January 1, 2021

 

 

550,985

 

 

$

5.67

 

 

 

3.2

 

 

$

3,384

 

Granted

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

 

 

 

 

 

 

 

 

 

 

Forfeited

 

 

(25,979

)

 

 

3.63

 

 

 

 

 

 

 

Outstanding at December 31, 2021

 

 

525,006

 

 

$

5.77

 

 

 

0.7

 

 

$

 

Exercisable at December 31, 2021

 

 

525,006

 

 

$

5.77

 

 

 

0.7

 

 

$

 

 

 

As of December 31, 2021, the unamortized value of options was $0.

The aggregate intrinsic value of options exercised was $0 for the years ended December 31, 2021 and 2020.

No options were granted during the years ended December 31, 2021 and 2020.

Note 8 – Stock Based Compensation, continued

Restricted Stock Units (“RSUs”)

During the year ended December 31, 2021, the Compensation Committee of the Board (“Compensation Committee”) granted various employees RSUs under which the holders have the right to receive an aggregate 1,849,985 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, 2021, the Compensation Committee granted various directors and consultants RSUs under which the holders have the right to receive an aggregate 179,591 shares of common stock. These awards were granted under the 2014 Non-Employee Equity Compensation Plan. The awards granted vest over terms from one year to four years.

During the year ended December 31, 2021, the Compensation Committee granted employees RSUs under which the holders have the right to receive 38,500 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.

At December 31, 2021, the unamortized value of the RSUs was $3,626,770. The unamortized amount will be expensed over a weighted average period of 1.8 years. A summary of the activity related to RSUs for the year ended December 31, 2021 is presented below:

 

 

 

 

Total

 

 

Weighted

Average Grant

Date Fair Value

 

Outstanding at January 1, 2021

 

 

1,421,168

 

 

$

6.43

 

RSUs granted

 

 

2,068,076

 

 

$

2.95

 

RSUs forfeited

 

 

(348,439

)

 

$

3.97

 

RSUs vested

 

 

(1,431,532

)

 

$

5.24

 

Outstanding at December 31, 2021

 

 

1,709,273

 

 

$

3.72

 

 

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 and achievement of sales and marketing goals.

 

During the year ended December 31, 2021, the Compensation Committee granted various employees PSUs under which the holders have the right to receive an aggregate 1,465,713 shares of common stock. These awards were granted under the 2015 Performance Share Unit Plan.

Compensation expense amortization for all PSU awards was $5,831,928 and $(88,348) for the years ended December 31, 2021 and 2020, respectively.

Note 8 – Stock Based Compensation, continued

Performance Share Units (“PSUs”), continued

At December 31, 2021, the unamortized value of all PSUs was $0. A summary of the activity related to PSUs for the year ended December 31, 2021 is presented below:

 

 

 

 

Total

 

 

Weighted

Average Grant

Date Fair Value

 

Outstanding at January 1, 2021

 

 

 

 

$

 

PSUs granted

 

 

1,617,601

 

 

$

4.22

 

PSUs forfeited

 

 

(196,663

)

 

$

4.11

 

PSUs vested

 

 

(1,420,938

)

 

$

4.24

 

Outstanding at December 31, 2021

 

 

 

 

$

 

 

Employee Stock Purchase Plan (“ESPP”)

During the years ended December 31, 2021 and 2020, 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 $1.10 and $1.18 during the years ended December 31, 2021 and 2020, 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 $252,568 and $329,461 for the years ended December 31, 2021 and 2020, respectively.

The Company estimated the fair value of the purchase options granted during the years ended December 31, 2021 and 2020 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, 2021

Stock price range

$

1.80 – 2.78

 

Dividend yield

 

0

%

Expected volatility range

 

95 – 143

%

Risk-free interest rate range

 

0.05 – 0.09

%

Expected life

 

6 months

 

 

 

 

 

 

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

 

 

 

 

 

 

 

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, 2021 and 2020:

 

 

 

 

For the Years Ended December 31,

 

 

 

2021

 

 

2020

 

Options

 

$

284,994

 

 

$

 

RSUs

 

 

5,561,698

 

 

 

7,656,857

 

PSUs

 

 

5,831,928

 

 

 

(88,348

)

ESPP

 

 

252,568

 

 

 

329,461

 

Total

 

$

11,931,188

 

 

$

7,897,970

 

 

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

 

 

 

 

For the Years Ended December 31,

 

 

 

2021

 

 

2020

 

Research and development

 

$

6,582,873

 

 

$

3,933,292

 

Sales and marketing

 

 

3,099,232

 

 

 

1,504,724

 

General and administrative

 

 

1,964,089

 

 

 

2,459,954

 

Severance expense

 

 

284,994

 

 

 

 

Total

 

$

11,931,188

 

 

$

7,897,970