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Capital Structure
 3 Months Ended
Mar. 31, 2024
Equity [Abstract]  
Capital Structure Capital Structure
Preferred Stock

Our Second Amended and Restated Certificate of Incorporation authorizes the issuance of 1,000,000,000 shares of preferred stock, par value $0.1000 with such designation, rights and preferences as may be determined from time to time by our board of directors. As of March 31, 2024 and December 31, 2023 there were no shares of preferred stock outstanding.
Common Stock

Our Second Amended and Restated Certificate of Incorporation authorizes the issuance of 300,000,000 shares of common stock, par value of $0.1000. As of March 31, 2024, there were 18,981,398 shares of common stock issued, and 18,811,398 shares of common stock outstanding. As of December 31, 2023, there were 18,841,142 shares of common stock issued and 18,671,142 shares of common stock outstanding.

Common Stock Reserved for Future Issuance

Shares of common stock reserved for future issuance as of March 31, 2024 were as follows:
(In thousands)Number of Shares
Restricted stock units (“RSUs”) and stock options outstanding under 2021 EIP
2,396 
RSUs outstanding under 2023 IEIP200 
Stock options outstanding under Cloudbreak Plan48 
Shares issuable upon conversion of 2025 Notes3,270 
Shares issuable upon conversion of 2026 Notes1,080 
Shares issuable upon conversion of 2021 Public Warrants1,725 
Shares issuable upon conversion of the 2023 Private Placement Series A Warrants3,000 
Shares issuable upon conversion of the 2023 Private Placement Series B Warrants3,000 
Shares issuable upon conversion of 2021 Private Warrants57 
Shares issuable upon conversion of 2021 PIPE Warrants30 
Shares available for future grant under 2021 EIP171 
Shares available for future grant under 2023 IEIP400 
Total15,377 

2015 Cloudbreak Incentive Plan

On June 19, 2015, Cloudbreak created the 2015 Unit Incentive Plan (the “Cloudbreak Plan”), which had a maximum aggregate number of 2,200,000 common units. Cloudbreak measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service period.

Upon completion of the Business Combinations, UpHealth assumed 1,576,670 options with a fair value of $99.0 million, which were included in purchase consideration, and 134,943 unvested options with a fair value of $0.6 million, which were subject to continued vesting and will be recorded as stock-based compensation prospectively; and Cloudbreak ceased granting awards under the Cloudbreak Plan.

On March 15, 2024, we completed the Sale of Cloudbreak to Forest Buyer, and in accordance with the Cloudbreak Plan, the 48,035 unvested outstanding options as of such date were immediately vested and will expire on September 15, 2024 if unexercised.

2021 Equity Incentive Plan

On June 4, 2021, the GigCapital2 stockholders considered and approved the 2021 Equity Incentive Plan (“2021 EIP”). The 2021 EIP was previously approved, subject to stockholder approval, by the Board of Directors of GigCapital2 on February 7, 2021. The 2021 EIP became effective immediately upon the closing of the Business Combinations. The number of shares of common stock reserved for issuance under the 2021 EIP will automatically increase on January 1 of each year, beginning on January 1, 2022 and each anniversary thereof during the effectiveness of the 2021 EIP, by an amount equal to the lesser of (i) five percent (5%) of the total number of shares of our common stock outstanding on such date, and (ii) such lesser number of shares as may be determined by our Board of Directors. On January 1, 2024, the number of shares of common stock reserved for issuance under the 2021 EIP was automatically increased by 933,557 shares.

In conjunction with the approval of the 2021 EIP, our Board of Directors also adopted a form of Restricted Stock Units Agreement (the “RSU Agreement”) and a form of Stock Option Agreement (the “Stock Option Agreement”) that we will generally use for grants under our 2021 EIP. The RSU Agreement provides that RSUs will vest over a fixed period and be paid as shares of common stock, and that the unvested RSUs will expire upon certain terminations of the grantees’ employment or other service relationship with us. The Stock Option Agreement provides that stock options will vest over a fixed period, and that the unvested options will expire upon certain terminations of the grantees’ employment or other service relationship with us.

We had 171,422 and 1,315,646 shares available for grant as of March 31, 2024 and December 31, 2023, respectively.
The following table summarizes our RSU activity under the 2021 EIP:
(In thousands, except per share amounts)Number of RSUsWeighted Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2023522 $3.10 
RSUs granted820 $0.31 
RSUs vested and issued(204)$3.15 
RSUs forfeited(42)$18.03 
Outstanding as of March 31, 20241,096 $1.04 
    
During the three months ended March 31, 2024, 181,638 RSUs were accelerated under the 2021 EIP in connection with the Sale of Cloudbreak, as discussed in Note 1, Organization and Business.

As of March 31, 2024, there was $0.9 million of unrecognized stock-based compensation expense related to RSUs, expected to be recognized over a weighted-average period of 1.28 years.

The following table summarizes our stock options granted during the three months ended March 31, 2024 :
(In thousands, except per share amounts)Number of OptionsWeighted Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2023— $— 
Options granted1,300 $0.41 
Outstanding as of March 31, 20241,300 $0.41 

For the options granted during the three months ended March 31, 2024, the fair value of stock options granted to employees was estimated using the Black-Scholes option-pricing model and with the following weighted average assumptions presented below:
March 31, 2024
Expected term (years)5to 5.5
Expected volatility110.0 %
Expected dividend yield— %
Risk-free interest rate4.2 %

As of March 31, 2024, there was $0.6 million of unrecognized stock-based compensation expense related to stock options, expected to be recognized over a weighted-average period of 2.93 years.

2023 Inducement Equity Incentive Plan

On May 1, 2023, for purposes of facilitating grants of equity awards to individuals as an inducement to the commencement of employment with us, our Board of Directors approved and adopted each of the UpHealth, Inc. Inducement Equity Incentive Plan (the “2023 IEIP”) providing for the issuance of an aggregate of up to 600,000 shares of UpHealth common stock pursuant to awards granted thereunder, and a form of Inducement RSU Agreement and Notice of Grant (the “Inducement RSU Agreement”) that we will generally use for grants under the 2023 IEIP. The Inducement RSU Agreement provides that RSUs will vest over a fixed period and be paid as shares of common stock, and that the unvested RSUs will expire upon certain terminations of the grantees’ employment or other service relationship with us. The 2023 IEIP does not provide for an automatic increase in the number of shares of common stock reserved for issuance pursuant to awards granted under the 2023 IEIP.

We had 200,000 shares outstanding at weighted average grant date fair value of $1.24 as of both March 31, 2024 and December 31, 2023. We had 400,000 shares available for grant under the 2023 IEIP as of both March 31, 2024 and December 31, 2023.

As of March 31, 2024, there was $0.1 million of unrecognized stock-based compensation expense related to RSUs, expected to be recognized over a weighted-average period of 2.14 years.

Stock-based Compensation
During the three months ended March 31, 2024 and 2023, we recorded stock-based compensation expense totaling $0.9 million and $1.0 million, respectively, all of which was attributed to our general and administrative function. In addition, we recorded $0.3 million related to the acceleration of equity awards in connection with the Sale of Cloudbreak, which is included in gain on sale of business in the unaudited condensed consolidated statements of operations.