Stockholders' Equity

3 Months Ended

Mar. 31, 2021

Stockholders' Equity Note [Abstract]

Common Stock

During the three months ended March 31, 2021, the Company issued 65,962 shares of Common Stock as a result of stock option exercises, and received net cash proceeds of approximately $0.6 million.

Stock Options

On September 8, 2017, the Company held its Annual Meeting of Stockholders (the “Annual Meeting”), at which time the 2017 Long-Term Incentive Plan ("2017 Plan") was approved by stockholder vote. The 2017 Plan allows the Company to grant both incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”) to purchase a maximum of 400,000 shares of the Company's Common Stock. Under the terms of the 2017 Plan, ISOs may only be granted to Company employees and directors, while NSOs may be granted to employees, directors, advisors, and consultants. The Board has the authority to determine to whom options will be granted, the number of options, the term, and the exercise price. Options are to be granted at an exercise price not less than fair value for an ISO or an NSO. The vesting period is normally over a period of four years from the vesting date. The contractual term of an option is no longer than 10 years. The 2017 Plan also allows the Company to issue restricted stock.

As provided in the 2017 Plan, on January 1, 2021 the number of shares available for issuance was increased by 4% of the outstanding stock as of December 31, 2020, which represents an increase of 170,234 shares. As of March 31, 2021, the Company had 139,013 shares available for future issuance under the 2017 Plan.

Prior to adopting the 2017 Plan, the Company did not have a formal long-term incentive stock plan. Prior to the implementation of the 2017 Plan, the Company had discretion to provide designated employees of the Company and its affiliates, certain consultants, and advisors who perform services for the Company and its affiliates, and non-employee members of the Board and its affiliates with the opportunity to receive grants of non-qualified stock options (the "Pre-2017 Non-Qualified Stock Options"). All of the Pre-2017 Non-Qualified Stock Option Grants were intended to qualify as non-qualified stock options. There were no Pre-2017 Non-Qualified Stock Option Grants that were intended to qualify as incentive stock options.

Pre-2017 Non-Qualified Stock Options

As of December 31, 2020, the Company had outstanding Pre-2017 Non-Qualified Stock Options to purchase, in the aggregate, 2,465,500 shares of the Company's Common Stock. During the three months ended March 31, 2021, the Company did not grant any Pre-2017 Non-Qualified Stock Options.

Stock option activity for the Pre-2017 Non-Qualified Stock Options for the three months ended March 31, 2021 is presented in the table below:


	Number of Shares	Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value (In Thousands)
Outstanding at December 31, 2020	2,465,500	$	6.99	4.09	$	2,773,190
Exercised	(65,962)	8.79
Forfeited	—	—
Outstanding at March 31, 2021	2,399,538	$	6.94	3.93	$	8,821,839

A summary of the status of the Company’s non-vested Pre-2017 Non-Qualified Stock Options as of March 31, 2021 is presented below:


	Number of Options	Weighted Average Grant Date Fair Value

Vested at March 31, 2021	2,364,540	$	6.90
Non-vested at Non-vested at March 31, 2021	34,998	$	10.00

During the three months ended March 31, 2021 and 2020, the Company recognized zero and $1 thousand, respectively, of non-cash expense related to Pre-2017 Non-Qualified Stock Options granted in prior periods. As of March 31, 2020, there was no further compensation expense to be recognized for the Pre-2017 Non-Qualified Stock Options.

The 2017 Plan

During the three months ended March 31, 2021, the Company granted options to a number of employees and non-employees to purchase 134,610 shares of the Company’s Common Stock at exercise prices from $8.20 to $12.15 per share, which represents the closing price of the Company’s Common Stock on the date of the grants. These options were issued under the Company’s 2017 Plan and have ten-year terms. Option grants to existing employees vest as follows: 1/48th of the option shares vest each month through the fourth anniversary of the grant date. Option grants to new employees vest as follows: 25% of the option shares vest on the one year anniversary of the grant date, and then 1/48th of the option shares vest on such date each month thereafter through the fourth anniversary of the grant date. The Company valued these options using the Black-Scholes option pricing model and estimated the aggregate fair value of the option grants to be $1.2 million.

The assumptions used in the valuation of options granted under the 2017 Plan during the three months ended March 31, 2021 were as follows:


			For the Three Months Ended March 31, 2021
Market value of stock on measurement date			$8.2 to $12.15
Risk-free interest rate			0.5% to 1.11%
Dividend yield			—
Volatility factor			80.14% to 88.79%
Term			5.50 to 6.25 years

Stock option activity for options granted under the 2017 Plan during the three months ended March 31, 2021 is presented in the table below:


	Number of Options Outstanding	Weighted-average Exercise Price		Weighted-average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)





Balance at December 31, 2020	611,760	$	21.39	7.85	$	—

Granted	134,610	$	11.65
Exercised	—	—
Forfeited	(3,000)	$	8.2
Balance at March 31, 2021	743,370	$	19.68	7.99	$	52,641

A summary of the status of the Company’s vested and non-vested options granted under the 2017 Plan as of March 31, 2021 is presented in the following table:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share




Vested at March 31, 2021	370,219	24.32
Non-vested at March 31, 2021	373,151	$	12.02

During the three months ended March 31, 2021 and 2020, the Company recognized approximately $0.6 million and $0.7 million, respectively of non-cash expense related to options granted under the 2017 Plan. As of March 31, 2021, there was approximately $1.9 million of unrecognized compensation costs related to non-vested stock options that were granted under the 2017 Plan.

Restricted Stock Activity

The following summarizes the restricted stock activity under the Company's 2017 Plan during the three months ended March 31, 2021:


	Number of Shares	Weighted Average Fair Value Per Share
Restricted stock outstanding and unvested at December 31, 2020	49,600	$	12.00
Restricted stock granted	61,043	$	12.15
Restricted stock vested	(6,527)	$	13.60
Restricted stock outstanding and unvested at March 31, 2021	104,116	$	11.99

Twenty-five percent (25%) of the restricted stock units will vest on the one year anniversary of the vesting commencement date, and twenty-five percent (25%) will vest annually thereafter on the same day as the vesting commencement date. During the three months ended March 31, 2021, the Company recognized approximately $182.5 thousand of non-cash expense related to restricted stock units. As of March 31, 2021, there was $0.9 million of total unrecognized compensation cost related to restricted stock units.

Warrants

During the three months ended March 31, 2021, the Company did not issue any warrants.

Warrant activity for the three months ended March 31, 2021 is presented in the table below:


	Number of Shares	Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2020	278,800	$	9.72	3.51	$	1,164
Exercised	—	$	—
Forfeited	—	$	—
Outstanding at March 31, 2021	278,800	$	9.72	3.26	$	—
Exercisable at March 31, 2021	278,800	$	9.72	3.26	$	—