Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Stock Plans

On June 18, 2024, the Company's stockholders approved the Company's Amended and Restated Omnibus Equity Incentive Plan (the "OEIP") which amended and restated (and renamed) the Company's 2015 Omnibus Equity Incentive Plan (as previously amended, the "2015 Plan") and increased the number of shares reserved thereunder by 3 million shares. As of June 30, 2024, there were approximately 3.1 million shares available for future grants under the Company’s OEIP. References to the OEIP herein include the 2015 Plan prior to its amendment and restatement. The maximum number of shares available for issuance over the term of the OEIP may not exceed 4.2 million shares.

During the six months ended June 30, 2024, the Company granted 0.3 million shares of restricted stock under the OEIP. There were no shares of restricted stock granted during the three months ended June 30, 2024.

The Company previously maintained a 2005 Stock Option / Stock Issuance Plan (the “2005 Plan”), which was replaced by and upon the adoption of the 2015 Plan. Certain options issued under the 2005 Plan remain outstanding, but no new grants have been made under the 2005 Plan since the adoption of the 2015 Plan.

The OEIP provides for the issuance of full value awards (restricted stock, performance stock, dividend equivalent right or restricted stock units) and partial value awards (stock options or stock appreciation rights) to employees, non-employee members of the Company's Board of Directors and consultants. Any full value award settled in shares will be debited as 1.2 shares, and partial value awards settled in shares will be debited as 1.0 shares against the share reserve. The exercise price per share for stock option grants is not to be less than the fair market value per share of the Company’s Common Stock on the date of grant. The Compensation Committee of the Board of Directors administers the OEIP and determines the vesting schedule at the time of grant. Stock options may be exercisable immediately or in installments, but generally vest over a four-year period from the date of grant. In the event the holder ceases to be employed by the Company, all unvested stock awards terminate, and all vested stock options may be exercised within a period of 90 days following termination of employment. In general, stock options expire ten years from the date of grant. Restricted stock is valued using the closing stock price on the date of the grant. The total value is expensed over the vesting period, which typically ranges from 12 to 48 months, however in the quarters ended March 31, 2024 and September 30, 2023, the Company granted restricted stock awards with tranched vesting periods of two to seven months.

Employee Stock Purchase Plan

The Company has a stockholder approved employee stock purchase plan (“ESPP”), under which substantially all employees may purchase the Company’s Common Stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning and end of six-month offering periods. Payroll deductions under the ESPP are limited to 10% of the employee’s compensation and in any calendar year employees may not purchase more than the lesser of $25,000 of stock or 250 shares, as set by the Compensation Committee of the Board of Directors in accordance with the terms of the ESPP. Additionally, no more than 31,250 shares in the aggregate may be purchased under the ESPP.

Stock Compensation Expense

The Company accounts for all stock-based payment awards made to employees and directors based on their fair values and recognized as compensation expense over the vesting period using the straight-line method over the requisite service period for each award as required by FASB ASC Topic No. 718, Compensation-Stock Compensation.

Non-cash stock-based compensation expenses related to stock options, restricted stock grants and the ESPP were recorded in the financial statements as follows (unaudited, in thousands):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
Sales and marketing	$	345	$	190	$	653	$	352
Research and development	245		240		509		464
General and administrative	548		600		1,110		1,159
Total non-cash stock compensation expense	$	1,138	$	1,030	$	2,272	$	1,975

As of June 30, 2024, there was approximately $4.0 million in unrecognized compensation costs related to unvested stock options and restricted stock awards granted under the OEIP and the 2005 Plan. In the second quarter of 2024, vesting of certain restricted stock awards was accelerated in accordance with the terms of the OEIP. As such, an additional $0.1 million of stock compensation expense was recorded in sales and marketing expense in that period.

Stock Options

For the six months ended June 30, 2024, the Company had approximately 9,000 stock options outstanding under the OEIP and 2005 Plan with a weighted average exercise price of $26.89 per share, a remaining weighted average contractual life of 3.4 years and nominal intrinsic value. No options were granted in the six months ended June 30, 2024 or 2023.

Restricted Stock Awards

A summary of the Company’s restricted stock awards outstanding under the OEIP for the six months ended June 30, 2024 are as follows (unaudited, in thousands, except weighted average grant date fair value):

	Shares	Weighted average grant date fair value
Unvested at December 31, 2023	256	$	21.31
Granted	277	6.46
Vested	(190)	13.85
Canceled and forfeited	(9)	12.05
Unvested at June 30, 2024	334	$	13.48