SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2024

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

17.   SHARE-BASED COMPENSATION

The amount of share-based compensation expense recognized by the Company by location in its Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 is as follows (in thousands):

	Years ended December 31,
	2024		2023		2022
Cost of revenues	$	140	$	140	$	130
Sales and marketing		1,411		2,330		4,286
General and administrative		3,407		4,172		3,868
Research and development		644		677		462
Total	$	5,602	$	7,319	$	8,746

2018 Equity Incentive Plan

In June 2018, the Company adopted the 2018 Plan, which authorized the issuance of up to 1.4 million shares, subject to an annual 4% increase based on the number of shares of common stock outstanding, in the form of restricted stock, stock appreciation rights and stock options to the Company’s directors, employees and consultants. The amount and terms of grants are determined by the Company’s board of directors. All stock options granted to date have had exercise prices equal to the fair value, as determined by the closing price as reported by the Nasdaq Global Market, of the underlying common stock on the date of grant. The contractual term of stock options is up to 10 years, and stock options are exercisable in cash or as otherwise determined by the board of directors. Generally, stock options vest 25% upon the first anniversary of the date of grant and the remainder ratably monthly thereafter for 36 months. Restricted stock units generally vest ratably in three equal installments on the first, second and third anniversaries of the grant date. PRSUs generally vest based on appreciation of the Company’s common stock to a certain price as determined by the Company’s board of directors measured using a trailing 30-day volume weighted average price of a share of the Company’s common stock. The fair value of the PRSU awards are determined using a risk neutral Monte Carlo simulation valuation model. As of December 31, 2024, there were 3.2 million shares available for future issuance under the 2018 Plan.

2020 Inducement Incentive Plan

In December 2020, the Company adopted the 2020 Inducement Incentive Plan, which authorized the issuance of up to 0.4 million shares in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards and other stock awards to eligible employees who satisfy the standards for inducement grants under Nasdaq global market rules. In March 2022, the Company’s board of directors approved an additional 0.5 million shares for issuance under the plan. An individual who previously served as an employee or director of the Company is not eligible to receive awards under this plan. The amount and terms of grants are determined by the Company’s board of directors. As of December 31, 2024, there were 0.4 million shares available for future issuance under the 2020 Inducement Incentive Plan.

Stock Options

The following table summarizes the Company’s stock option activity for the years ended December 31, 2024, 2023 and 2022:

				Weighted	Aggregate
	Number of	Weighted		average	average
	Shares under	average		Remaining	Intrinsic
	Option	Exercise Price		Contractual	Value
	(in thousands)	per Option		Life (in years)	(in thousands)
Outstanding at December 31, 2021	1,499	$	4.01
Granted	—	$	—
Exercised	(168)	$	1.77
Forfeited	(30)	$	13.81
Outstanding at December 31, 2022	1,301	$	4.07
Granted	—	$	—
Exercised	(1)	$	1.63
Forfeited	(30)	$	11.67
Outstanding at December 31, 2023	1,270	$	3.90
Granted	—	$	—
Exercised	(2)	$	0.96
Forfeited and Expired	(31)	$	9.90
Outstanding at December 31, 2024	1,237	$	3.75	5.1	$	3.0
Exercisable at December 31, 2024	1,237	$	3.75	5.1	$	3.0
Vested and expected to vest at December 31, 2024	1,237	$	3.75	5.1	$	3.0

The Company recognized share-based compensation expense related to stock options of $0.1 million, $0.4 million and $0.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, there was no remaining unrecognized compensation cost related to non-vested stock options. The total intrinsic value of stock options exercised during the years ended December 31, 2024, 2023 and 2022 was $0.0 million, $0.0 million, and $0.2 million, respectively.

Restricted Stock Units

The following table summarizes the Company’s restricted stock unit and performance restricted stock unit activity for the years ended December 31, 2024, 2023 and 2022:

	Non-vested		Weighted	Non-vested		Weighted
	Restricted		average	PRSUs		average
	Stock Units		Grant-date			Grant-date
	(in thousands)		Fair Value	(in thousands)		Fair Value
Non-vested at December 31, 2021	1,729	$	7.29	395	$	6.77
Granted	2,902	$	3.36	—	$	—
Vested	(705)	$	7.32	—	$	—
Forfeited	(420)	$	5.35	—	$	—
Non-vested at December 31, 2022	3,506	$	4.29	395	$	6.77
Granted	1,674	$	4.68	—	$	—
Vested	(1,823)	$	4.32	—	$	—
Forfeited	(392)	$	5.50	—	$	—
Non-vested at December 31, 2023	2,965	$	4.37	395	$	6.77
Granted	2,453	$	2.47	1,305	$	1.14
Vested	(1,464)	$	4.37	—	$	—
Forfeited	(401)	$	4.00	—	$	—
Non-vested at December 31, 2024	3,553	$	3.10	1,700	$	2.45

The Company recognized share-based compensation expense related to restricted stock units and performance restricted stock units of $5.5 million, $6.9 million, and $8.1 million during the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, there was $8.2 million of unrecognized compensation cost related to non-vested restricted stock units and performance restricted stock units that the Company expects to recognize over a weighted-average period of 1.8 years. The total fair value at the vesting date of restricted stock units and performance restricted stock units vested during the years ended December 31, 2024, 2023 and 2022 was $4.4 million, $8.6 million, and $2.5 million, respectively.

During the year ended December 31, 2024, the Company granted performance restricted stock units to certain key employees of Neuronetics and Greenbrook, with vesting subject to the recipient’s continued service with the Company through the applicable vesting date and the achievement of certain performance conditions as outlined in the award document. For legacy Greenbrook employees who became Neuronetics employees in connection with the Arrangement, the awards are subject to the terms of the Company’s 2020 Inducement Incentive Plan. For legacy Neuronetics employees, the awards are subject to the Company’s 2018 Equity Incentive Plan.

The Company offers our board of directors and certain employees the opportunity to defer restricted stock units into an equity-based deferred equity compensation plan, the Restricted Stock Unit Deferral Election Plan (“RSUDEP”). Benefits from these plans are payable in shares of Neuronetics stock and the awards under this plan are unfunded to the plans’ participants. Restricted stock units deferred under the RSUDEP are counted against the total shares available for future issuance under the 2018 Equity Incentive Plan. As December 31, 2024 there were 0.2 million shares deferred under this plan.

The Company did not grant performance restricted stock units during the years ended December 31, 2023 and 2022.