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Stockholders' Equity
 3 Months Ended
Mar. 31, 2021
Equity [Abstract]  
Stockholders' Equity

Note 12 - Stockholders’ Equity

 

Conversion of Series AA Preferred Stock

 

In January and February 2021, 9,807,367 shares of Series AA Preferred Stock converted into 19,614,734 shares of common stock. On March 1, 2021, we consummated an offer to exchange the remaining outstanding shares of Series AA Preferred Stock for two shares of our common stock per share of Series AA Preferred Stock (the “Exchange Offer”). As a result of the Exchange Offer, 13,412,246 shares of Series AA Preferred Stock, representing 100% of the outstanding shares of Series AA Preferred Stock, were exchanged for 26,824,492 shares of our common stock.

 

Issuance of treasury stock

 

On February 26, 2021, the Company issued 623,068 shares of its common stock in connection with the Vigtory Acquisition.

 

Stock-based compensation

 

During the three months ended March 31, 2021 and March 31, 2020 the Company recognized stock-based compensation expense as follows:

 

    For the Three Months Ended March 31,  
    2021     2020  
Subscriber related   $ 14     $ -  
Sales and marketing     713       -  
Technology and development     2,070       -  
General and administrative     6,577       9,061  
    $ 9,374     $ 9,061  

 

Options

 

The Company provides stock-based compensation to employees, directors, and consultants under the Company’s 2020 Equity Incentive Plan. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The risk-free interest rate is determined by referencing the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which is the half-life from vesting to the end of its contractual term. The simplified method was used because the Company does not have sufficient historical exercise data to provide a reasonable basis for an estimate of expected term.

 

The following was used in determining the fair value of stock options granted during the three months ended March 31, 2021 and 2020:

 

    For the Three Months Ended March 31,  
    2021     2020  
Dividend yield     0 %     0 %
Expected price volatility     44.85 %     52.28 %
Risk-free interest rate     0.73 %     1.49 %
Expected term (years)     6.1       2.5  

 

A summary of stock option activity for the three months ended March 31, 2021 is as follows (in thousands, except share and per share amounts):

 

    Number of Shares     Weighted Average
Exercise Price		     Total Intrinsic Value     Weighted Average Remaining Contractual Life
(in years)		  
Outstanding as of December 31, 2020     13,450,565     $ 5.45     $ 303,036       8.1  
Granted     62,599     $ 21.14                  
Exercised     (1,011,954 )   $ 0.76                  
Forfeited or expired     (290,724 )   $ 4.15                  
Outstanding as of March 31, 2021     12,210,486     $ 5.95     $ 197,917       8.0  
                                 
Options vested and exercisable as of March 31, 2021     5,119,688     $ 3.18     $ 96,994       3.8  

 

The outstanding stock options as of December 31, 2020 were adjusted from the previously reported amount in the Annual Report to exclude certain option grants subject to discretionary performance conditions for which a grant date had not occurred as of December 31, 2020.

 

As of March 31, 2021, the unrecognized stock-based compensation expense related to unvested options was approximately $38.7 million to be recognized over a period of 2.8 years.

 

Non-employees

 

During the three months ended March 31, 2020, the Company granted options to purchase 280,000 shares of the Company’s common stock at an exercise price of $7.20 per share. This option has a fair value of $1,031,000, a five-year term and expires on December 21, 2024. These options were immediately vested as of the grant date. During the three months ended March 31, 2021, 80,000 options were exercised in exchange for 71,010 shares of the Company’s common stock. These options are not included in the table above.

  

There were no options granted to non-employees in the three months ended March 31, 2021.

 

Market and Service Condition Based Stock Options

 

A summary of activity under the Plan for market and service-based stock options for the three months ended March 31, 2021 is as follows (in thousands, except share and per share amounts):

 

    Number of Shares     Weighted Average
Exercise Price		     Total Intrinsic Value     Weighted Average Remaining Contractual Life
(in years)		  
Outstanding as of December 31, 2020     3,078,297     $ 9.69     $ 56,351       6.3  
Outstanding as of March 31, 2021     3,078,297     $ 9.69     $ 38,250       6.1  
                                 
Options vested and exercisable as of March 31, 2021     3,078,297     $ 9.69     $ 38,250       6.1  

 

Restricted Stock Units

 

A summary of the Company’s restricted stock unit activity during the three months ended March 31, 2021 is as follows:

 

    Number of Shares     Weighted Average Grant-Date
Fair Value		  
Unvested at December 31, 2020     85,000     $ 25.26  
Granted     1,046,543     $ 33.02  
Unvested at March 31, 2021     1,131,543     $ 32.44  

 

During the three months ended March 31, 2021, the Company recognized $1.8 million of stock-based compensation expense, and as of March 31, 2021, unrecognized stock-based compensation related to restricted stock units totaled $34.7 million. As of March 31, 2021, the restricted stock units have an aggregate intrinsic value of approximately $25.0 million and the weighted average remaining contractual term is 3.7 years.

 

Warrants

 

A summary of the Company’s outstanding warrants as of March 31, 2021 are presented below (in thousands, except share and per share amounts):

 

    Number of Warrants     Weighted Average
Exercise Price		     Total Intrinsic Value     Weighted Average Remaining Contractual Life
(in years)		  
Outstanding as of December 31, 2020     2,535,528     $ 8.22     $ 50,560       1.0  
Exercised     (713,257 )   $ 8.83     $ -       -  
Outstanding as of March 31, 2021     1,822,271     $ 7.98     $ 26,171       0.7  
                                 
Warrants exercisable as of March 31, 2021     1,822,271     $ 7.98     $ 26,171       0.7