Share Based Compensation

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement, Noncash Expense [Abstract]

Equity Plans

The Company grants awards to recipients through the 2017 Equity Incentive Plan, as amended (the 2017 Plan), which was approved by stockholders and the Board of Directors. The 2017 Plan provided for the issuance of shares that total no more than the sum of (i) 14,500,000 new shares, (ii) approximately 384,000 unallocated shares remaining available for the grant of new awards under the Second Amended and Restated 2007 Equity Incentive Plan, (iii) any returning shares such as forfeited, cancelled, or expired shares and (iv) 500,000 shares pursuant to an inducement award. The number of shares available to be issued under the 2017 Plan will be reduced by (i) one share for each share that relates to an option or stock appreciation right award and (ii) 1.5 shares for each share which relates to an award other than a stock option or stock appreciation right award (a full-value award). As of March 31, 2022, there were approximately 3.1 million remaining shares available for issuance under this plan. Options expire 10 years from the date of grant.

General Vesting Conditions

The Company’s stock options and restricted stock unit awards are generally subject to a one-year cliff vesting period after which 1/3 of the shares vest with the remaining shares vesting ratably over a two-year period subject to the passage of time. Additionally, certain stock option awards are market or performance based and vest based on certain triggering events established by the Compensation Committee.

Stock Options

The fair value of the Company’s stock options that are not market based are estimated at the grant date using the Black-Scholes option pricing model. The Company used the following weighted average assumptions for options granted during the three months ended March 31, 2022:


Weighted Average:	Three Months Ended March 31, 2022
Expected term	5.7 years
Expected volatility	76.5	%
Risk-free rate	1.9	%
Expected dividends	—	%

Service Period Based Stock Options

The following table summarizes activity of service period-based stock options during the three months ended March 31, 2022:


		Weighted Average
(In thousands except per-share data and remaining contractual term)	Number of Options	Exercise Price		Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2021	9,495	$	4.65	6.5	$	2,452
Options Granted	1,745	2.69
Options Exercised	—	—			—
Options Forfeited	(326)	4.83
Outstanding at March 31, 2022	10,914	$	4.33	6.5	$	95	*

Exercisable at March 31, 2022	7,261	$	3.93	5.0	$	95	*

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $2.46, which is the closing price of the Company’s stock on the last day of business for the period ended March 31, 2022.

Restricted Stock Units

The following table summarizes activity of restricted stock units during the three months ended March 31, 2022:


(In thousands except per share fair value)	Number of RSUs	Weighted Average Fair Value
Unvested shares at December 31, 2021	115	$	10.21
Granted	272	2.66
Vested	(23)	11.83
Forfeited	(8)	11.83
Unvested shares at March 31, 2022	356	$	4.28

Expected to vest at March 31, 2022	356	$	4.28

Total Share-Based Compensation

Total share-based compensation expense was as follows:


	Three Months Ended March 31,
(In thousands)	2022		2021
Share-based compensation expense
Cost of sales	$	57	$	40
Sales and marketing	321		388
Research and development	225		138
General and administrative	1,285		718
Total	$	1,888	$	1,284

In future periods, the Company expects to recognize approximately $10.1 million and $1.4 million in share-based compensation expense for unvested options and unvested restricted stock units, respectively, that were outstanding as of March 31, 2022. Future share-based compensation expense will be recognized over 2.1 and 2.5 weighted average years for unvested options and restricted stock units, respectively.