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Stock-Based Compensation
 3 Months Ended
Mar. 31, 2022
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
The Company's 2017 Stock Incentive Plan (the “2017 Plan”) and 2010 Stock Incentive Plan (the “2010 Plan”) provide for the issuance of 5,359,397 shares of the Company's common stock. The Company has granted stock options to executive officers, employees, members of the Company's board of directors, and certain outside consultants and restricted stock units ("RSUs") to employees. The terms and conditions upon which options become exercisable vary among grants; however, option rights expire no later than ten years from the date of grant and employee and Board of Director awards generally vest over one to four years on a straight-line basis. The terms and conditions upon which RSUs vest vary among grants; however, RSUs generally vest over four to five years on a straight-line basis. As of March 31, 2022, the Company had 3,602,468 stock options and RSUs outstanding and 390,186 shares reserved for future awards.
Stock-based compensation expense was $3.0 million and $2.6 million for the three months ended March 31, 2022 and 2021, respectively.
The assumptions used in the Black-Scholes option-pricing model were as follows:

Three Months Ended
March 31, 2022
Volatility
 100.0%
Risk-free interest rate
1.04%
Expected life (in years)
 2.81
Dividend yield0 %

The expected volatility assumptions have been based on the historical and expected volatility of our stock and comparable companies, measured over a period generally commensurate with the expected term or acceptable period to determine reasonable volatility. The weighted average expected option term for the three months ended March 31, 2022 reflects the application of the simplified method prescribed in SEC Staff Accounting Bulletin (“SAB”) No. 107 (as amended by SAB 110), which defines the life as the average of the contractual term of the options and the weighted average vesting period for all option tranches.
Stock Options - Employees and Directors
A summary of stock option activity for employees, directors and consultants is as follows:
Number of Shares
Weighted Average
Exercise Price
Outstanding as of December 31, 20213,618,145 $13.55 
Granted332,296 8.72 
Forfeited(444,972)16.28 
Outstanding as of March 31, 20223,505,469 12.74 
Options vested and exercisable as of March 31, 20221,089,599 $14.19 

As of March 31, 2022, there was $13.2 million of total unrecognized compensation cost related to non-vested stock compensation arrangements granted to employees, directors and consultants under the 2017 Amended Plan, which is expected to be recognized over a weighted-average period of approximately 1.77 years.
Restricted Stock Units - Employees
The Company estimates the fair value of RSUs based on the closing price of our common stock on the date of grant. The following table summarizes our RSU award activity issued under the 2017 Plan:

Restricted Stock UnitsWeighted-
Average
Grant Date Fair Value
Non-vested at December 31, 2021111,874 $33.27 
Forfeited(13,000)28.60 
Vested and distributed(1,875)51.98 
Non-vested at March 31, 2022
96,999 33.53 


As of March 31, 2022, there was $2.9 million of unrecognized compensation cost related to unvested outstanding RSUs. We expect to recognize these costs over a weighted average period of 3.46 years.
Warrants - Non-employees
The Company has also granted warrants to purchase common stock that have been approved by our Board of Directors. A summary of warrants activity was as follows:
Number of Warrants
Weighted Average
Exercise Price
Outstanding as of December 31, 202135,832 $16.75 
Granted131,664 0.01 
Outstanding as of March 31, 2022167,496 3.59 
Warrants exercisable as of March 31, 2022167,496 3.59 
In connection with entering into the Eighth Amendment of our note purchase agreement for our 2024 Notes on March 8, 2022, as discussed in Note 9 below, the Company issued to Special Situations Investing Group II, LLC (the “Holder”), a Purchase Warrant for Common Shares (the “Amendment Warrant”) pursuant to which the Holder may purchase shares of the Company’s common stock in an aggregate amount of up 111,680 shares. Also, on March 31, 2022, the Company issued additional warrants (a “Ticking Warrant” and together with the Amendment Warrant, the “Warrants”), as discussed in Note 9 below, having the same terms as the Amendment Warrant, to purchase 19,984 shares of the Company's common stock, which was based on a stated value of $47,500 and the number of common stock calculated based on the volume weighted average trading price of the Company’s common stock during the five (5) trading day period immediately preceding the date such Ticking Warrant was issued, not to exceed 7% of the outstanding shares of the Company's common stock on the date of the Eighth Amendment. The Warrants were offered and sold to the Holder in a private placement exempt from registration under the Securities Act. The Warrants may be exercised by the Holder at an exercise price equal to $0.01 per share and will expire on September 24, 2026. The Company assessed and separated the Warrants into liability and equity components, wherein the Amendment Warrant qualified for equity classification and the Ticking Warrant qualified for liability classification. The fair values of the Warrants were determined at grant date using the Black-Scholes pricing model. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The fair value of liability component is remeasured at each reporting period until it is completely settled or expire. See Note 10 below for more information.
Performance-Based and Market-Based Awards
The Company’s Compensation Committee designed a compensation structure to align the compensation level of the Executive Chairman to the performance of the Company through the issuance of market-based stock options. The market-based options vest upon the Company’s stock price reaching a certain price at a specific performance period and the total amount of compensation
expense recognized is based on a Monte Carlo simulation that factors in the probability of the award vesting. The following table summarizes the Company’s outstanding awards under this structure:

Grant DatePerformance MeasuresVesting TermPerformance Period# of SharesExercise Price
December 2017
Weighted Average Price of our common stock is $15.00 for at least twenty trading days within a period of thirty consecutive trading days ending on the trading day prior to January 1, 2023.
Fully vest on January 1, 2023January 1, 2023642,307 $7.50 
August 2018
Weighted Average Price of our common stock is $15.00 for at least twenty trading days within a period of thirty consecutive trading days ending on the trading day prior to January 1, 2023.
Fully vest on January 1, 2023January 1, 2023397,693 $7.50