Stock-Based Compensation

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

The Company recognized total stock-based compensation expense during the three and six months ended June 30, 2020 and 2019 as follows:



	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020			2019
Service-based awards:
Restricted stock units	$	(4,127	)	$	427,472	$	233,987		$	771,823
Stock option awards	336,513			547,139		776,138			1,199,163
	332,386			974,611		1,010,125			1,970,986
Performance-based awards:
Restricted stock units	(1,196,713		)	402,814		(1,025,502		)	801,202
Stock option awards	(596,687		)	123,901		(510,791		)	246,440
	(1,793,400		)	526,715		(1,536,293		)	1,047,642
Total	$	(1,461,014	)	$	1,501,326	$	(526,168	)	$	3,018,628

Restricted Stock

A summary of the Company’s restricted stock awards during the six months ended June 30, 2020 is as follows:

A summary of the Company’s restricted stock awards during the six months ended June 30, 2019 is as follows:

The fair value of restricted stock awards are measured based on their fair value on the date of grant and amortized over the vesting period of 20 months. As of June 30, 2020, unvested restricted stock awards of 146,800 were related to performance-based awards.

Service-Based Restricted Stock Units

A summary of the Company’s service-based restricted stock units during the six months ended June 30, 2020 is as follows:



	Number of Shares		Weighted Average Grant-Date Fair Value
Unvested at January 1, 2020	463,786		$	4.26
Granted	188,904		2.09
Vested	(128,460	)	4.30
Forfeited	(104,168	)	4.66
Unvested at June 30, 2020	420,062		$	3.27

A summary of the Company’s service-based restricted stock units during the six months ended June 30, 2019 is as follows:



	Number of Shares		Weighted Average Grant-Date Fair Value
Unvested at January 1, 2019	472,959		$	4.32
Granted	199,938		4.45
Forfeited	(3,650	)	4.81
Unvested at June 30, 2019	669,247		$	4.36

The fair value of service based restricted stock units are measured based on their fair value on the date of grant and amortized over the vesting period. The vesting periods range from 1 to 3 years. Stock-based compensation expense of nil and $0.2 million was recognized during the three and six months ended June 30, 2020, respectively. Stock-based compensation expense of $0.4 million and $0.8 million was recognized during the three and six months ended June 30, 2019, respectively. As of June 30, 2020, the unrecognized stock-based compensation expense was $0.6 million, which is expected to be recognized over an estimated weighted average remaining term of 1 year. Included in the forfeited service-based restricted stock units are 96,541 units related to the resignation of the Company's former President and Chief Executive Officer on April 17, 2020. These forfeited awards reduced stock-based compensation expense by $0.2 million.

Performance-Based Restricted Stock Units

A summary of the Company’s performance-based restricted stock units during the six months ended June 30, 2020 is as follows:



	Number of Shares	Weighted Average Grant-Date Fair Value
Unvested at January 1, 2020	988,958	$	4.48
Forfeited	(905,625)	4.61
Unvested at June 30, 2020	83,333	$	3.09

A summary of the Company’s performance-based restricted stock units during the six months ended June 30, 2019 is as follows:

Stock-based compensation expense recognized for performance-based restricted stock units was ($1.2) million and ($1.0) million during the three and six months ended June 30, 2020 and $0.4 million and $0.8 million for the three and six months ended June 30, 2019, respectively. As of June 30, 2020, the unrecognized stock-based compensation expense related to performance-based restricted stock units was $0.1 million, which is expected to be recognized over an estimated weighted average remaining term of 2 years. The forfeited performance-based restricted stock awards of 905,625 is due to the resignation of the Company's former President and Chief Executive Officer on April 17, 2020. These forfeited awards reduced stock-based compensation expense by $1.3 million.

Service-Based Stock Options

The fair value of the service-based stock options granted for the six months ended June 30, 2020 were based on the following assumptions:



	June 30, 2020
Exercise price	$1.77 - $2.45
Expected stock price volatility	68.2% - 74.4%
Risk-free interest rate	0.35% - 1.65%
Term (years)	5.5 -6.5

A summary of the Company’s service-based stock option activity for the six months ended June 30, 2020 is as follows:



	Shares Underlying Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2020	8,210,024		$	7.06	5.1	$	107,150
Granted	1,610,344		2.24		5.9	—
Forfeited	(211,471	)	4.41		—	—
Expired	(3,983,335	)	8.30		—	—
Outstanding at June 30, 2020	5,625,562		$	4.90	6.7	$	1,100

Exercisable at June 30, 2020	2,809,954		$	7.09	4.3	$	—

A summary of the Company’s service-based stock option activity for the six months ended June 30, 2019 is as follows:



	Shares Underlying Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at January 1, 2019	7,856,480		$	7.50	5.2	$	—
Granted	523,105		4.33		9.7	—
Exercised	(30,000	)	4.93		—	—
Forfeited	(550,549	)	6.67		—	—
Outstanding at June 30	7,799,036		$	7.36	5.4	$	2,500

Exercisable at June 30, 2019	6,183,193		$	8.16	4.3	$	—

The aggregate intrinsic value in the table above is calculated as the difference between the closing price of our common stock and the exercise price of the stock options that had strike prices below the closing price.

During the six months ended June 30, 2020, the Company granted stock options to purchase up to 1,610,344 shares of common stock to certain employees. During the six months ended June 30, 2020, 211,471 shares were forfeited. Forfeitures are recorded in the period of occurrence; compensation expense is adjusted accordingly.

Stock-based compensation expense recognized for service-based stock options was $0.3 million and $0.8 million for the three and six months ended June 30, 2020, respectively. Stock-based compensation expense recognized for service-based stock options was $0.5 million and $1.2 million for the three and six months ended June 30, 2019, respectively. As of June 30, 2020, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $3.1 million, which is expected to be recognized over an estimated weighted average remaining term of 1.4 years. Included in the forfeited service-based stock options are 129,375 unvested options related to the resignation of the Company's former President and Chief Executive Officer on April 17, 2020. These forfeited awards reduced stock-based compensation expense by $0.2 million. Included in the expired service-based stock options are 3,783,335 options related to the settlement with the former Chief Executive Officer, Robert Chioini, former Chief Financial Officer, Thomas Klema, and a former and then current director. See Note 14 for further details.

Performance-Based Stock Options

A summary of the performance-based stock options for the six months ended June 30, 2020 is as follows:



	Number of Shares		Weighted Average Exercise Price
Outstanding at January 1, 2020	388,125		$	4.70
Granted	600,000		2.45
Forfeited	(388,125	)	4.70
Outstanding at June 30, 2020	600,000		$	2.45

Exercisable at June 30, 2020	—		$	—

A summary of the performance-based stock options for the six months ended June 30, 2019 is as follows:



	Number of Shares	Weighted Average Exercise Price
Outstanding at January 1, 2019	388,125	$	4.70
Outstanding at June 30, 2019	388,125	$	4.70

Exercisable at June 30, 2019	—	$	—

Stock-based compensation expense recognized for performance-based stock options was ($0.6) million and ($0.5) million for the three and six months ended June 30, 2020. Stock-based compensation expense recognized for performance-based stock options was $0.1 million and $0.2 million during the three and six months ended June 30, 2019. As of June 30, 2020, the unrecognized stock-based compensation expense related to unvested performance-based stock options was $0.1 million. The forfeited unvested performance-based stock options of 388,125 is due to the resignation of the Company's former President and Chief Executive Officer on April 17, 2020. These forfeited options reduced stock-based compensation expense by $0.7 million.

Number of Shares

Weighted Average
Grant-Date
Fair Value

Unvested at January 1, 2020

Unvested at June 30, 2020