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Stockholder's Equity (Deficit) | 3 Months Ended
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Mar. 31, 2021
Equity [Abstract] |
Stockholders' Deficit | 17. STOCKHOLDERS’ EQUITY (DEFICIT) Authorized Capital Stock—The Company was authorized to issue 190,000,000 shares of common stock, with a par value of $0.000004 per share as of March 31, 2021 and December 31, 2020. Warrants—In May 2015, the Company issued warrants to acquire 116,350 shares of Common Stock at a price of approximately $17.19 per share to the placement agent as consideration for backstopping the financing completed in May 2015. These warrants were exercised in full as a cashless transaction during the three months ended March 31, 2021. As a result of this cashless transaction, the resulting number of shares issued was 67,713 shares. Common Stock Issuances—The Company issued the following shares of common stock:
| Three Months Ended March, |
| 2021 |  |  | 2020 |
| Shares |  |  | Average Price per Share |  |  | Shares |  |  | Average Price per Share |
Acquisitions |  | 71,740 |  |  | $ | 31.65 |  |  |  | — |  |  | $ | — |
Exercise of warrants |  | 67,713 |  |  |  | 17.19 |  |  |  | — |  |  |  | — |
Exercise of options |  | 330,060 |  |  |  | 6.62 |  |  |  | — |  |  |  | — |
Restricted shares, net |  | 36,817 |  |  |  | 29.88 |  |  |  | — |  |  |  | — |
Total |  | 506,330 |  |  | $ | 13.27 |  |  |  | — |  |  | $ | — |
Employee Equity Incentive Plans—The Company has two plans under which stock-based awards have been issued: (i) the Montrose Amended & Restated 2017 Stock Incentive Plan (“2017 Plan”) and (ii) the Montrose Amended & Restated 2013 Stock Option Plan (“2013 Plan”) (collectively the “Plans”). As of March 31, 2021 and March 31, 2020, there was $18.8 million and $7.2 million, respectively, of total unrecognized stock compensation expense related to unvested options and restricted stock granted under the Plans. Such unrecognized expense is expected to be recognized over a weighted-average three year period. The following number of shares were authorized to be issued and available for grant:
|  | March 31, 2021 |
|  | 2017 Plan |  |  | 2013 Plan |  |  | Total |
Shares authorized to be issued |  |  | 3,944,750 |  |  |  | 2,047,269 |  |  |  | 5,992,019 |
Shares available for grant |  |  | 1,618,996 |  |  |  | — |  |  |  | 1,618,996 |
|  | March 31, 2020 |
|  | 2017 Plan |  |  | 2013 Plan |  |  | Total |
Shares authorized to be issued |  |  | 1,057,785 |  |  |  | 2,058,619 |  |  |  | 3,116,404 |
Shares available for grant |  |  | 8,217 |  |  |  | 4,775 |  |  |  | 12,992 |
Total stock compensation expense for the Plans was as follows:
|  | Three Months Ended March 31, |
|  | 2021 |  |  | 2020 |
|  | 2017 plan |  |  | 2013 plan |  |  |  |  |  |  | 2017 plan |  |  | 2013 plan |  |  |  |  |
|  | Options |  |  | Restricted Stock |  |  | Options |  |  | Total |  |  | Options |  |  | Restricted Stock |  |  | Options |  |  | Total |
Cost of revenue |  | $ | 606 |  |  | $ | — |  |  | $ | 10 |  |  | $ | 616 |  |  | $ | 355 |  |  | $ | — |  |  | $ | 70 |  |  | $ | 425 |
Selling, general and administrative expense |  |  | 1,004 |  |  |  | 182 |  |  |  | 3 |  |  |  | 1,189 |  |  |  | 287 |  |  |  | 370 |  |  |  | 68 |  |  |  | 725 |
Total |  | $ | 1,610 |  |  | $ | 182 |  |  | $ | 13 |  |  | $ | 1,805 |  |  | $ | 642 |  |  | $ | 370 |  |  | $ | 138 |  |  | $ | 1,150 |
Montrose Amended & Restated 2017 Stock Incentive Plan Restricted Stock—During the three months ended March 31, 2021 and March 31, 2020, the Company issued 14,532 and 33,229 shares of restricted stock with a fair market value of $30.96 and $31.60 per share, respectively, to certain 2017 Plan participants as Director’s compensation. These shares of restricted stock granted in the three months ended March 31, 2021 and March 31, 2020 vest one year from the date of grant, or, in each case, in full upon a change in control, subject to the participant’s continued service as a Director throughout such date, or upon retirement. Members of the Board of Directors that receive stock-based compensation are treated as employees for accounting purposes. There were 36,817 and zero shares of restricted stock that became fully vested and were released as unrestricted shares of common stock during the three months ended March 31, 2021 and March 31, 2020, respectively. There were no forfeitures of restricted shares during the three months ended March 31, 2021 and March 31, 2020. There were an aggregate of 281,705 and 273,122 restricted shares outstanding as of March 31, 2021 and March 31, 2020, respectively. Options—Options issued to all optionees under the 2017 Plan vest over four years from the date of issuance (or earlier vesting start date, as determined by the Board of Directors) as follows: one half on the second anniversary of date of grant and the remaining half on the fourth anniversary of the date of grant, with the exception of certain annual grants to certain executive officers, which vest annually over a 3-year and 1-year period. The following summarizes the options activity of the 2017 Plan:
|  | Options to Purchase Common Stock |  |  | Weighted- Average Exercise Price per Share |  |  | Weighted Average Grant Date Fair Value per Share |  |  | Weighted Average Remaining Contract Life (in Years) |  |  | Aggregate Intrinsic Value of In-The- Money Options (in Thousands) |
Outstanding at January 1, 2020 |  |  | 617,852 |  |  | $ | 24 |  |  | $ | 12 |  |  |  | 7.82 |  |  | $ | 4,696 |
Granted |  |  | 158,062 |  |  |  | 32 |  |  |  | 12 |  |  |  | — |  |  |  | — |
Forfeited/ cancelled |  |  | (2,000 | ) |  |  | 32 |  |  |  | — |  |  |  | — |  |  |  | — |
Outstanding at March 31, 2020 |  |  | 773,914 |  |  |  | 26 |  |  |  | 12 |  |  |  | 8.50 |  |  |  | 4,693 |
Outstanding at January 1, 2021 |  |  | 1,840,229 |  |  |  | 23 |  |  |  | 12 |  |  |  | 9.09 |  |  |  | 15,598 |
Granted |  |  | 224,270 |  |  |  | 38 |  |  |  | 20 |  |  |  | — |  |  |  | — |
Forfeited/ cancelled |  |  | (10,000 | ) |  |  | 26 |  |  |  | — |  |  |  | — |  |  |  | — |
Expired |  |  | (1,250 | ) |  |  | 18 |  |  |  | — |  |  |  | — |  |  |  | — |
Exercised |  |  | (17,188 | ) |  |  | 16 |  |  |  | — |  |  |  | — |  |  |  | 519 |
Outstanding at March 31, 2021 |  |  | 2,036,061 |  |  |  | 24 |  |  |  | 13 |  |  |  | 8.97 |  |  |  | 52,317 |
Exercisable at March 31, 2021 |  |  | 218,379 |  |  |  | 24 |  |  |  | — |  |  |  | 7.79 |  |  |  | 5,702 |
Options vested and expected to vest |  |  | 2,036,061 |  |  |  | 24 |  |  |  | — |  |  |  | 8.97 |  |  |  | 52,317 |
The following weighted-average assumptions were used in the Black-Sholes option-pricing model calculation:
|  | March 31, |  | March 31, |
|  | 2021 |  | 2020 |
Common stock value (per share) |  | $ 37.61 |  | $ 31.60 |
Expected volatility |  |  | 58.01 | % |  | 31.87 | %
Risk-free interest rate |  |  | 0.71 | % |  | 1.78 | %
Expected life (years) |  | 5.5-7.0 |  | 7.0 |
Forfeiture rate |  | None |  | None |
Dividend rate |  | None |  | None |
Montrose Amended & Restated 2013 Stock Option Plan—The following summarizes the activity of the 2013 Plan:
|  | Options to Purchase Common Stock |  |  | Weighted- Average Exercise Price per Share |  |  | Weighted Average Grant Date Fair Value per Share |  |  | Weighted Average Remaining Contract Life (in Years) |  |  | Aggregate Intrinsic Value of In-The- Money Options (in Thousands) |
Outstanding at January 1, 2020 |  |  | 1,855,469 |  |  | $ | 6 |  |  | $ | 1 |  |  |  | 6.14 |  |  |  | 46,617 |
Expired |  |  | (725 | ) |  |  | 6 |  |  |  | — |  |  |  | — |  |  |  | — |
Outstanding at March 31, 2020 |  |  | 1,854,744 |  |  |  | 6 |  |  |  | 1 |  |  |  | 6.14 |  |  |  | 46,521 |
Outstanding at January 1, 2021 |  |  | 1,787,869 |  |  |  | 6 |  |  |  | — |  |  |  | 5.40 |  |  |  | 43,867 |
Exercised |  |  | (311,872 | ) |  |  | 6 |  |  |  | — |  |  |  | — |  |  |  | 12,321 |
Outstanding at March 31, 2021 |  |  | 1,475,997 |  |  |  | 6 |  |  |  | — |  |  |  | 5.14 |  |  |  | 64,492 |
Exercisable at March 31, 2021 |  |  | 1,456,922 |  |  |  | 6 |  |  |  | — |  |  |  | 5.13 |  |  |  | 63,740 |
Options vested and expected to vest |  |  | 1,475,997 |  |  |  | 6 |  |  |  | — |  |  |  | 5.14 |  |  |  | 64,492 |
Total shares outstanding from exercised options were 579,260 shares and 201,600 shares as of March 31, 2021 and March 31, 2020, respectively. Common Stock Reserved for Future Issuances—The Company has reserved certain stock of its authorized but unissued common stock for possible future issuance in connection with the following:
|  | March 31, |
|  | 2021 |  |  | 2020 |
Warrants |  |  | — |  |  |  | 650,590 |
Montrose 2013 Stock Incentive Plan |  |  | 2,047,269 |  |  |  | 2,058,619 |
Montrose 2017 Stock Incentive Plan |  |  | 3,944,750 |  |  |  | 1,057,785 |
Common stock reserved for future issuance |  |  | 5,992,019 |  |  |  | 3,766,994 |

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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