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Share-based compensation

6 Months Ended

Jun. 30, 2020

Note 9. Share-based compensation

The 2017 Stock Option Plan (“2017 Option Plan”) became effective November 13, 2017, upon the approval of the board of directors and serves as the umbrella plan for the Company’s stock-based and cash-based incentive compensation program for its officers and other eligible employees. The aggregate number of shares of common stock that may be issued under the 2017 Option Plan may not exceed 8,470,000 shares. At June 30, 2020, 128,928 shares of common stock are reserved for additional grants under the Plan. All stock options granted by the Company were at an exercise price at or above the estimated fair market value of the Company’s common stock as of the grant date. No options were granted during the six months ended June 30, 2020.

The table below summarizes return target options activity for the six months ended June 30, 2020:


				Weighted‑
		Weighted‑		Average	Aggregate
		Average		Remaining	Intrinsic
		Exercise		Contractual	Value
	Options	Price		Term (Years)	(in thousands)
Outstanding, December 31, 2019	3,687,664	$	6.75	8.8	$	29,908
Granted	—		—
Exercised	—		—			—
Forfeitures	—		—
Outstanding, June 30, 2020	3,687,664	$	6.75	8.3	$	39,644
Options exercisable at June 30, 2020	—	$	—	—	$	—
Vested or expected to vest at June 30, 2020	—	$	—	—	$	—

There was approximately $33.0 million of unrecognized compensation expense related to these return target options at June 30, 2020.

Restricted stock unit (“RSU”) activity for the six months ended June 30, 2020 is as follows:


		Per Unit
	Units	Fair Value
Outstanding, December 31, 2019	36,520	$	12.60
Granted	—		—
Restrictions lapsed	—		—
Forfeited	—		—
Outstanding, June 30, 2020	36,520	$	12.60

RSUs vest 100% on the one-year anniversary of the date of the grant. The estimated compensation cost of each RSU, which is equal to the fair value of the award on the date of grant, is recognized on a straight-line basis over the vesting period. At June 30, 2020, there was $0.2 million of total unrecognized compensation cost related to unvested restricted stock and that cost is expected to be recognized in the year.

The table below summarizes the service-based option activity for the six months ended June 30, 2020:


				Weighted‑
		Weighted‑		Average	Aggregate
		Average		Remaining	Intrinsic
		Exercise		Contractual	Value
	Options	Price		Term (Years)	(in thousands)
Outstanding, December 31, 2019	4,073,286	$	5.65	8.1	$	37,520
Granted	—		—
Exercised	(18,792)		5.49			60
Forfeitures	—		—
Outstanding, June 30, 2020	4,054,494	$	5.65	7.6	$	48,044
Options exercisable at June 30, 2020	2,150,893	$	5.50	7.5	$	25,806
Vested or expected to vest at June 30, 2020	4,054,494	$	5.65	7.6	$	48,044

The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the optionholders had all optionholders exercised their options on the last date of the period. The total fair value of service-based options vested during the six months ended June 30, 2020 was $0.6 million.

The Company recognized stock-based compensation expense for service-based stock options as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019

	(in thousands)
Cost of revenues:
Subscription	$	38	$	55	$	76	$	118
Services		—		—		—		—
Sales and marketing		111		143		222		236
Research and development		141		95		298		185
General and administrative		474		356		979		679
	$	764	$	649	$	1,575	$	1,218

There was $4.6 million of unrecognized compensation expense related to service-based stock options that is expected to be recognized over a weighted-average period of 2.1 years at June 30, 2020.