Stockholders' Equity

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Tax Benefits Preservation Plan

In connection with the execution of the Merger Agreement, the Company entered into an amendment to its Tax Benefits Preservation Plan to render it inapplicable to the Merger Agreement, the execution thereof and the performance or consummation of the transactions contemplated thereby, including, without limitation, the Merger.

Stock-based Compensation Expense

The following table sets forth the allocation of stock-based compensation expense in the consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31,
(in thousands)	2020		2019
Sales and marketing	$	124	$	70
Product development and content	1,928		1,500
General and administrative	1,133		855
Total stock-based compensation expense	$	3,185	$	2,425

As of March 31, 2020, there was $0.1 million, $14.0 million and $3.0 million of total unrecognized stock-based compensation expense, which is expected to be recognized over a weighted-average vesting period of 0.3 years, 1.4 years and 1.9 years for the Company’s stock options, restricted stock awards (“RSAs”) and performance share units (“PSUs”), respectively.

Stock Options

Stock-based compensation expense for stock options was estimated on the date of grant and amortized on a straight-line basis over the requisite service period based on their fair value. The fair value of stock options was estimated on the grant date using the Black-Scholes option pricing model, based on weighted-average assumptions. Stock options generally vest over a three-year period with 33% vesting at the end of year one and the remaining vesting annually thereafter. The Company has not awarded any stock options since November 2017.

The following table sets forth the Company’s stock options activity for the three months ended March 31, 2020:

	Number of Stock Options		Weighted- average Exercise Price		Weighted- average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
(in thousands, except share and per share data) Stock Options
Outstanding as of January 1, 2020	3,680,146		$	3.60
Exercised	(162,841	)	3.47
Forfeited or expired	(85,000	)	3.65
Outstanding as of March 31, 2020	3,432,305		$	3.61	4.8	$	7,791
Exercisable as of March 31, 2020	3,333,817		$	3.60	4.7	$	7,607

The total intrinsic values of stock options exercised during the three months ended March 31, 2020 and 2019 were $0.4 million and $0.2 million, respectively. The Company recorded stock-based compensation expense related to its stock options of $0.2 million and $0.4 million and for the three months ended March 31, 2020 and 2019, respectively.

Restricted Stock Awards

Stock-based compensation expense for RSAs is recognized on a straight-line basis over the requisite service period. RSAs generally vest over a three-year period with 33% vesting at the end of year one and the remaining vesting annually thereafter.

The following table sets forth the Company’s RSA activity for the three months ended March 31, 2020:

	Number of
	Restricted Stock		Weighted-average
Restricted Stock Awards	Awards		Stock Price
Outstanding as of January 1, 2020	4,036,398		$	4.85
Granted	620,277		5.51
Vested	(295,389	)	5.18
Forfeited or expired	(112,723	)	5.57
Outstanding as of March 31, 2020	4,248,563		$	4.90

Shares are forfeited if not vested within three years from the date of grant. The Company recorded stock-based compensation expense related to its RSAs of $2.5 million and $1.9 million for the three months ended March 31, 2020 and 2019, respectively.

Performance Share Units

The Company began granting PSUs to certain employees in April 2018. PSUs are based on a relative total shareholder return (“TSR”) metric over a performance period spanning three years from the grant date of the PSU. PSUs will vest at the end of the performance period and will be paid immediately in shares of common stock. Stock-based compensation expense for PSUs is estimated on the date of grant and amortized on a straight-line basis over the performance period. PSUs are forfeited if the participant is no longer employed on the third anniversary of the grant date, except in the event of an involuntary termination, death, disability or change in control. PSU share payouts range from a threshold of 33% to a maximum of 170% based on the relative ranking of the Company’s TSR as compared to the TSR of the companies in the Russell 2000 peer group. The PSU award stipulates certain limitations to the payout in the event the payout reaches a defined ceiling level or the Company’s TSR is negative.

The following table sets forth the Company’s PSU activity for the three months ended March 31, 2020:

	Number of
	Performance Share	Weighted-average
Performance Share Units	Units	Stock Price
Outstanding as of January 1, 2020	1,086,100	$	4.34
Granted	60,000	6.61
Outstanding as of March 31, 2020	1,146,100	$	4.46

The Company recorded stock-based compensation expense related to its PSUs of $0.4 million and $0.2 million for the three months ended March 31, 2020 and 2019, respectively.