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Stockholders' Equity
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Stockholders' Equity Stockholders' Equity
Under the Company's Third Amended and Restated Certificate of Incorporation, there are 300,000,000 shares of authorized Common Stock and 5,000,000 shares of authorized Preferred Stock. Holders of Common Stock are entitled to one vote for each share. The shares of Preferred Stock shall be issued with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors.
Treasury Stock
In May 2022, the Company’s board of directors authorized a share repurchase program for up to $200.0 million of the Company’s Common Stock, which expired on December 31, 2023 (the "Share Repurchase Program"). The timing and actual number of shares repurchased depended upon market conditions and other factors. Shares of the Company’s Common Stock were repurchased from time to time on the open market through privately negotiated transactions or otherwise. During the nine months ended September 30, 2023, the Company purchased 631,953 shares of the Company’s Common Stock for
$9.2 million under the Share Repurchase Program, which is reflected in Treasury Stock in the accompanying consolidated statements of stockholders’ equity. During the three months ended September 30, 2024, as discussed in Note 14, Commitments and Contingencies, the Company issued 1 million shares from its Treasury Stock in connection with a litigation settlement.
Warrants
As of September 30, 2024, the Company had 3,871,557 warrants outstanding, which have an expiration date of November 8, 2024. Each warrant is exercisable into one share of Common Stock at a price of $11.50 per share. The exercise price and number of shares of Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for the issuance of Common Stock at a price below its exercise price. There were no warrants exercised during the nine months ended September 30, 2024 and 2023.
The Company classifies its warrants as a liability in its consolidated balance sheets because of certain terms included in the corresponding warrant agreement. The estimated fair value of the warrants is recorded as a liability, with such fair value reclassified to stockholders’ equity upon the exercise of such warrants. Prior to exercise, the change in the estimated fair value of such warrants each period is recognized as a non-cash charge or gain in the Company’s consolidated statements of operations.
A reconciliation of the changes in the warrant liability during the nine months ended September 30, 2024 and 2023 was as follows (in thousands):
Estimated fair value of warrant liability at December 31, 2023$4,021
Change in estimated fair value of the warrant liability(1,800)
Estimated fair value of warrant liability at September 30, 2024$2,221
Estimated fair value of warrant liability at December 31, 2022$38,503
Change in estimated fair value of the warrant liability(31,886)
Estimated fair value of warrant liability at September 30, 2023$6,617
The warrant liability is classified as a current liability as of September 30, 2024 and December 31, 2023 in the accompanying consolidated balance sheets since the expiration date of the warrants is less than one year as of such dates.
Equity-based Compensation
In connection with the Company’s 2019 Stock Incentive Plan (the "2019 Plan"), the Company provides equity-based compensation to attract and retain employees while also aligning employees’ interest with the interests of its stockholders. The 2019 Plan permits the grant of various equity-based awards to selected employees and non-employee directors. On June 20, 2024, the stockholders of the Company approved an amendment and restatement of the 2019 Plan to increase the number of shares of Common Stock of the Company reserved under the 2019 Plan by 8,350,000 shares, to permit the grant of up to 18,350,000 shares of Common Stock, subject to certain adjustments and limitations. At September 30, 2024, 7,206,885 shares of the Company’s Common Stock were available for issuance under the 2019 Plan.
Stock Options
There were no stock options granted during the nine months ended September 30, 2024 and 2023. The following table provides the activity regarding the Company’s outstanding stock options during the nine months ended September 30, 2024 that were granted in connection with the 2019 Plan (in thousands, except per share data):
Number of
Options		Weighted-Average
Grant Date
Fair Value
per Share		Weighted-Average
Exercise Price
per Share		Weighted-Average
Remaining
Contractual Term
Outstanding, December 31, 20232,219$3.75 $19.36 5.1 Years
Expired(735)$4.58 $23.38 
Outstanding, September 30, 20241,484$3.34 $17.38 0.9 Years
The following table provides the activity for all outstanding stock options during the nine months ended September 30, 2024 (in thousands, except per share data):
Number of
Options		Weighted-Average
Exercise Price
per Share		Weighted-Average
Remaining
Contractual Term
Outstanding, December 31, 20233,409$14.90 
4.9 Years
Exercised(245)$3.97 
Expired(735)$23.38 
Outstanding, September 30, 20242,429$13.43 2.3 Years
During the nine months ended September 30, 2024 and 2023, 207,002 and 200,000 stock options were exercised resulting in $0.7 million and $0.5 million of cash proceeds received by the Company and the issuance of 207,002 and 200,000 shares of the Company’s Common Stock, respectively. During the nine months ended September 30, 2024 and 2023, 38,014 and 1,341,770 stock options were exercised on a cashless basis resulting in the issuance of 13,509 and 228,466 shares of the Company's Common Stock, respectively.
Restricted Stock
During the nine months ended September 30, 2024, the Company granted the following shares of restricted stock and restricted stock units:
•1,881,690 shares of restricted stock to various employees which vest ratably over the two or three-year periods following the vesting commencement dates, subject to the employees’ continuous employment through the applicable vesting dates. The grant-date fair value of these awards was $16.7 million
•52,326 shares of restricted stock to an employee which vested on the two-month anniversary following the applicable vesting commencement dates. The grant-date fair value of these awards was $0.5 million
•122,663 shares of restricted stock to the Company's non-employee directors which vest approximately one year following the grant date. The grant-date fair value of these awards was $1.2 million.
•1,047,291 shares of performance-vested restricted stock units ("Performance RSUs") to certain employees of the Company which will vest on the three-year period following the vesting commencement dates subject to the achievement of specified goals relative to the Company’s three-year relative total shareholder return ("Relative TSR") performance versus the Company’s defined peer group (the "Peer Group"), which is considered a market
condition, and is also subject to the employees’ continuous employment through the vesting dates. The grant-date fair value of these awards, using a Monte-Carlo simulation analysis, was $19.2 million. The payout of shares on the vesting dates are as follows based on the Company’s Relative TSR versus the Peer Group (for performance between the stated goals noted below, straight-line interpolation will be applied):
•Less than 25th Percentile – No payout
•Greater than or equal to 25th Percentile – 50% of Performance RSUs
•Equal to 50th Percentile – 100% of Performance RSUs
•Greater than or equal to 75th Percentile – 200% of Performance RSUs
Activity related to the Company’s non-vested restricted stock grants for the nine months ended September 30, 2024 is presented below (in thousands, except per share data):
Number of Shares of
Restricted Stock		Weighted-Average Grant Date
Fair Value per Share
Non-vested balance, December 31, 20232,068$19.16 
Granted3,104$12.13 
Vested(754)$37.25 
Forfeited(1,023)$15.73 
Non-vested balance, September 30, 20243,395$14.02 
Equity-Based Compensation Expense
The Company recognized equity-based compensation expense of $0.9 million during the three months ended September 30, 2024, of which $0.4 million and $0.5 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations. The Company recognized equity-based compensation expense of $4.5 million during the three months ended September 30, 2023, of which $3.5 million and $1.0 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations.
The Company recognized equity-based compensation expense of $10.6 million during the nine months ended September 30, 2024, of which $8.4 million and $2.2 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations. The Company recognized equity-based compensation expense of $17.3 million during the nine months ended September 30, 2023, of which $15.8 million and $1.5 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations.
At September 30, 2024, there was $31.1 million of unrecognized compensation expense related to equity-based compensation awards, which is expected to be recognized over a weighted-average period of 2.2 years.
As previously disclosed, by mutual agreement with the Company, the Company's former President resigned from all positions held with the Company on August 31, 2024 and the parties agreed that he will serve as a non-executive member of the board of directors until December 31, 2024. In connection with his termination of employment on August 31, 2024, 311,018 restricted stock units subject to time-based vesting conditions and 391,408 restricted stock units subject to performance-based vesting conditions that were unvested at the time of his resignation were forfeited. As a result of these forfeitures, during the three and nine months ended September 30, 2024, the Company reversed $3.3 million of previously recognized equity-based compensation expense, which was recognized as a reduction to general and administration expenses in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2024.
As previously disclosed, by mutual agreement with the Company, effective June 30, 2023, Stephen Griggs resigned as Chief Executive Officer of the Company. In connection with Mr. Griggs’ separation, the Company accelerated the vesting of 78,130 unvested stock options and 143,739 unvested shares of restricted stock which were subject to time-based vesting
conditions only. In addition, the Company modified the vesting conditions for 159,555 shares of Performance RSU's to allow for vesting based on the achievement of the applicable Relative TSR, but no longer requires continuous employment through the applicable vesting date. In connection with the accelerated vesting and modification, the Company recognized $4.0 million of equity-based compensation expense, which is included in general and administrative expenses in the accompanying consolidated statements of operations for the nine months ended September 30, 2023.