Stock Option Plan

12 Months Ended

Dec. 31, 2020

Text Block [Abstract]

Stock Option Plan

14. Stock Option Plan

The Company adopted the 2012 Equity Incentive Plan, or the “2012 Plan,” in May 2012. Including subsequent increases, the Company had reserved 14  million shares for issuance. On December 31, 2020, there are 5,659,018 shares reserved for issuance and no shares available for future grant.

The Company adopted the 2020 Equity Incentive Plan, or the “2020 Plan,” in June 2020. The Company reserved 21 million shares for issuance plus a carryover of 1,066,275 shares from the 2012 Plan for a total of 22,066,275 shares. However, only 5,750,000 shares were registered due to due to the proximity to the Company’s authorized limit of 250 million shares. On December 31, 2020, there are 1,173,368 shares reserved for issuance and 5,714,648 shares available for future grant.

As of December 31, 2020 the Company had outstanding options to its employees to purchase up to 5,733,1551 shares of the Company’s common stock, to its directors to purchase up to 1,039,231 shares of the Company’s common stock, as well as options to consultants in connection with services rendered to purchase up to 60,000 shares of the Company’s common stock.

Stock options to employees generally vest ratably in either quarterly or annual installments over three or four years, commencing on the first anniversary of the grant date and have contractual terms of ten years. Stock options to directors generally vest ratably over one or two years and have contractual terms of ten years. Stock options are valued using the Black-Scholes option pricing model and compensation is recognized based on such fair value over the period of vesting on a straight-line basis.

Proceeds from the option exercises during the years ended December 31, 2020, 2019, and 2018 amounted to $0.4 million, $1.2 million and $0.2 million respectively. The intrinsic value of these options amounted to $0.3 million, $1.1 million and $0.1 million for years ended December 31, 2020, 2019 and 2018, respectively.

Transactions under the 2012 Plan and the 2020 Plan for the years ending December 31, 2020, 2019, and 2018 were as follows:

(in thousands, except share and per share data)	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2017		3,852,135		$	5.12
Granted		1,744,950			2.35
Exercised		(104,167	)		2.35
Cancelled		(215,833	)		5.72
Outstanding, December 31, 2018		5,277,085			4.24
Granted		2,880,691			3.40
Exercised		(581,105	)		3.30
Cancelled		(1,733,792	)		4.21
Outstanding, December 31, 2019		5,842,879			3.21
Granted		2,222,368			3.39
Exercised		(338,333	)		2.01
Cancelled		(894,528	)		4.22
Outstanding, December 31, 2020		6,832,386		$	3.81		7.94	$	812
Options exercisable, December 31, 2020		3,596,315		$	4.17		6.90	$	598
Options exercisable, December 31, 2019		2,765,357		$	4.39		6.70	$	3,603
Options available for future grant at December 31, 2020		5,714,648

In September 2017, the Company granted an option for 500,000 inducement stock options, with an exercise price of $6.16 per share, which vests ratably in annual installments over three years, commencing on the first anniversary of the grant date and has a contractual term of ten years. The grant date fair value was $2.2 million.

On July 22, 2019, August 19, 2019, and November 21, 2019, the Company granted 400,000, 65,000, and 65,000 inducement stock options, with exercise prices of $5.60, $5.18, and $4.59, respectively. The options vest ratably,

over four years, commencing with one quarter on the first anniversary of the grant date and then quarterly thereafter. The options have a contractual term of ten years. These options were granted outside of the 2012 Plan and therefore, are not included in the table above. The grant date fair value was $1.5 million, $231 thousand, and $193 thousand, respectively. As of December 31, 2020, 588,333 options are outstanding from all inducement stock options.

Restricted Stock

In the fiscal years ended December 31, 2020 and 2019, the Company issued 805,900 and 1,519,766 shares of restricted stock, respectively, to employees. and directors.

On December 31, 2020, total unrecognized compensation costs related to non-vested stock options outstanding amounted to $7.3 million. The cost is expected to be recognized over a weighted-average period of 1.78 years. In January 2019, one of the Company’s executives received 446,428 shares of restricted stock in lieu of their annual cash bonus. The shares were immediately vested. In the year ended December 31, 2019, the Company repurchased 225,339 shares at average prices ranging from $2.24 to 4.72 to cover payroll taxes. In the year ended December 31, 2018, the Company repurchased 514,349 shares at average prices ranging from $1.70 to 4.41 to cover payroll taxes. A summary of the status of restricted stock as of December 31, 2020, 2019 and 2018 is as follows:

	Number of Shares			Weighted-Average Grant Date Fair Value
Non-vested, December 31, 2017		1,808,559		$	5.74
Granted		150,321			1.87
Vested		(1,005,337	)		6.62
Cancelled		(271,433	)		5.00
Non-vested, December 31, 2018		682,110			3.47
Granted		1,519,766			2.44
Vested		(1,187,601	)		2.82
Cancelled		(74,599	)		3.41
Non-vested, December 31, 2019		939,676			2.93
Granted		805,900			3.75
Vested		(764,360	)		3.51
Cancelled		(194,897	)		3.44
Non-vested, December 31, 2020		786,319		$	3.08

As of December 31, 2020, there was $1.8 million of total unrecognized stock-based compensation expense related to non-vested restricted stock arrangements. The expense is expected to be recognized over a weighted-average period of 1.34 years.