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Stock-Based Compensation
9 Months Ended
Sep. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation

10.

Stock-Based Compensation

A summary of the Company’s stock award activity and related information is as follows:

 

 

 

 

 

 

 

Options Outstanding

 

 

 

Shares

Available

for Grant

 

 

Number

of Stock

Options

Outstanding

 

 

Weighted-

Average

Exercise

Price

 

 

Weighted-

Average

Remaining

Contractual Life

(Years)

 

 

Aggregate

Intrinsic

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Balance at December 31, 2019

 

 

948,415

 

 

 

11,165,846

 

 

$

7.44

 

 

 

7.6

 

 

$

1,907

 

Additional shares authorized

 

 

9,137,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options granted

 

 

(736,579

)

 

 

736,579

 

 

 

1.97

 

 

 

 

 

 

 

 

 

Options exercised

 

 

 

 

 

(20,579

)

 

 

0.72

 

 

 

 

 

 

 

 

 

Options cancelled or forfeited

 

 

3,496,601

 

 

 

(3,496,601

)

 

 

6.99

 

 

 

 

 

 

 

 

 

Withheld shares to pay for taxes on released RSUs

 

 

299,898

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RSUs granted

 

 

(5,981,966

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RSUs cancelled or forfeited

 

 

599,623

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2020

 

 

7,763,659

 

 

 

8,385,245

 

 

$

7.12

 

 

 

7.6

 

 

$

2,273

 

Vested and exercisable at September 30, 2020

 

 

 

 

 

 

5,180,433

 

 

$

7.11

 

 

 

7.1

 

 

$

1,199

 

Vested and expected to vest at September 30, 2020

 

 

 

 

 

 

8,095,506

 

 

$

7.15

 

 

 

7.5

 

 

$

2,134

 

Stock Options

The weighted-average grant date fair value of options granted to employees was $1.20 and $4.71 per share during the nine months ended September 30, 2020 and 2019, respectively. The grant date fair values of options vested was $7.6 million and $11.4 million during the nine months ended September 30, 2020 and 2019, respectively.

Aggregate intrinsic value represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. The aggregate intrinsic values of options exercised was $0.0 million and $7.8 million during the nine months ended September 30, 2020 and 2019, respectively.

At September 30, 2020, total unrecognized compensation cost related to stock options granted to employees, net of estimated forfeitures, was $11.8 million which is expected to be recognized over a weighted-average period of 2.1 years.

Determination of Fair Value

The determination of the fair value of stock options on the date of grant using an option-pricing model is affected by the estimated fair value of the Company’s common stock, as well as assumptions regarding a number of complex and subjective variables. The variables used to calculate the fair value of stock options using the Black-Scholes option-pricing model include actual and projected employee stock option exercise behaviors, expected price volatility of the Company’s common stock, the risk-free interest rate and expected dividends. Each of these inputs is subjective and generally requires significant judgment to determine.

The fair value of employee stock options is estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions:  

 

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

Expected term (in years)

 

 

6.0

 

 

 

6.0

 

Expected volatility

 

68.8%

 

 

60.7%

 

Risk-free interest rate

 

0.7%

 

 

2.4%

 

Expected dividend yield

 

0.0%

 

 

0.0%

 

Restricted Stock Units

From time to time, the Company grants Restricted Stock Units, or RSUs, to its board of directors and certain employees for their services. Certain board members elected RSUs in lieu of retainer and committee service fees, which vest over a period of time from the grant date and will be released and settled upon termination of the board member’s services or the occurrence of a change in control event. In January and June 2020, the Company granted RSUs to its Board of Directors as part of the director compensation program. The January 2020 RSUs granted to board members vested in full on the date of our 2020 Annual Meeting of Stockholders. The June 2020 RSUs granted to board members vest in full on the date of our 2021 Annual Meeting of Stockholders. In January and June 2020, the Company granted RSUs to the Company’s CEO that vest annually at 42% on the first anniversary date of the grant, and 29% on the second and third anniversary date of the grant. In January and March of 2020, the Company granted RSUs to several employees. These RSUs vest in equal annual installments over three years from the grant date and are subject to the participants continuing service to the Company over that period. The fair value of RSUs is based on the closing market price of the Company’s common stock on the grant date.

 

 

 

RSUs

 

 

 

Number of Shares

 

 

Weighted Average Grant Date Fair Value

 

Unvested at December 31, 2019

 

 

4,379,777

 

 

$

5.14

 

RSUs granted

 

 

5,981,966

 

 

 

2.78

 

RSUs vested

 

 

(996,529

)

 

 

8.14

 

RSUs forfeited

 

 

(599,623

)

 

 

3.13

 

Unvested at September 30, 2020

 

 

8,765,591

 

 

$

3.33

 

Vested and unreleased

 

 

153,055

 

 

 

 

 

Outstanding at September 30, 2020

 

 

8,918,646

 

 

 

 

 

The total grant date fair value of RSUs awarded and RSUs vested was $16.7 million and $8.1 million, respectively, for the nine months ended September 30, 2020.

As of September 30, 2020, total unrecognized stock-based compensation cost related to RSUs, net of estimated forfeitures, was $21.1 million which is expected to be recognized over a weighted-average period of 2.0 years. At September 30, 2020, 8,266,088 shares of RSUs are expected to vest.

Stock-Based Compensation Expense

Total stock-based compensation expense recognized for employee stock awards and employee stock purchase plan shares in the Company’s condensed consolidated statements of operations and comprehensive loss is classified as follows (in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Cost of revenue

 

$

217

 

 

$

757

 

 

$

725

 

 

$

1,967

 

Research and development

 

 

549

 

 

 

1,076

 

 

 

1,705

 

 

 

2,900

 

Selling and marketing

 

 

258

 

 

 

385

 

 

 

817

 

 

 

1,027

 

General and administrative

 

 

4,735

 

 

 

2,692

 

 

 

13,816

 

 

 

8,475

 

Total stock-based compensation expense

 

$

5,759

 

 

$

4,910

 

 

$

17,063

 

 

$

14,369

 

Stock-based compensation relating to stock-based awards granted to consultants was insignificant during the three and nine months ended September 30, 2020 and 2019.