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STOCKHOLDERS' EQUITY (DEFICIT) AND COMPENSATION ARRANGEMENTS | 6 Months Ended
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Jun. 30, 2024
Share-Based Payment Arrangement [Abstract] |
STOCKHOLDERS' EQUITY (DEFICIT) AND COMPENSATION ARRANGEMENTS | STOCKHOLDERS' EQUITY (DEFICIT) AND COMPENSATION ARRANGEMENTS Groupon, Inc. Incentive Plan In August 2011, we established the 2011 Plan under which options, RSUs and PSUs for up to 13,775,000 shares of Common Stock are authorized for future issuance to employees, consultants and directors. The 2011 Plan is administered by the Compensation Committee. In June 2024, at the Company's annual meeting of stockholders, the Company's stockholders approved an amendment to the 2011 Plan to increase the number of authorized shares by 7,000,000. Accordingly, a total of 20,775,000 shares of Common Stock have been authorized for issuance under the 2011 Plan. As of June 30, 2024, 6,039,229 shares of Common Stock were available for future issuance under the 2011 Plan. Restricted Stock Units The RSUs generally have vesting periods between one and four years and are amortized on a straight-line basis over their requisite service period. The table below summarizes RSU activity for the six months ended June 30, 2024:
| RSUs |  | Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2023 | 745,840 |  |  | $ | 10.61 |
Granted | 642,772 |  |  | 10.68 |
Vested | (510,166) |  |  | 8.55 |
Forfeited | (99,403) |  |  | 14.12 |
Unvested at June 30, 2024 | 779,043 |  |  | $ | 11.55 |
As of June 30, 2024, $7.3 million of unrecognized compensation costs related to unvested RSUs are expected to be recognized over a remaining weighted-average period of 1.5 years. Stock Options On March 30, 2023, we issued 3,500,000 units of stock options with a per share value of $0.95, a strike price of $6.00 and vesting over two years. The exercise price of stock options granted is equal to the fair market value of the underlying stock on the date of grant. The contractual term for these stock options expires three years from the grant date. The fair value of stock options on the grant date is amortized on a straight-line basis over the requisite service period. The fair value of stock options granted is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. Expected volatility is based on Groupon's historical volatility over the estimated expected life of the stock options. The expected term represents the period of time the stock options are expected to be outstanding. The risk-free interest rate is based on yields on U.S. Treasury STRIPS with maturity similar to the estimated expected life of the stock options. The weighted-average assumptions for stock options granted are outlined in the following table:
Dividend yield | 0.0 | %
Risk-free interest rate | 4.1 | %
Expected term (in years) | 2
Expected volatility | 78.2 | %
The table below summarizes stock option activity for the six months ended June 30, 2024:
| Options |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Total outstanding at December 31, 2023(1) | 3,062,500 |  |  | $ | 6.00 |  |  | 2.25 |  | 20,948 |
Exercised | — |  |  | — |  |  | — |  |  | — |
Total outstanding at June 30, 2024 | 3,062,500 |  |  | 6.00 |  |  | 1.75 |  | 28,481 |
Exercisable at June 30, 2024 | 1,750,000 |  |  | $ | 6.00 |  |  | 1.75 |  | $ | 16,275 |
(1) Consists of 2,187,500 outstanding (unvested) stock options and 875,000 exercisable stock options as of December 31, 2023, as presented within our Annual Report on Form 10-K. As of June 30, 2024, there was $1.2 million of total unrecognized compensation costs related to unvested stock options granted under the 2011 Plan. That cost is expected to be recognized over a weighted-average period of 0.75 years. The total fair value of shares vested during the six months ended June 30, 2024 was $0.8 million. These stock options were granted to our Chief Executive Officer, who is based in the Czech Republic. Taxes on stock options in the Czech Republic are payable upon the sale of the underlying shares. The Company's tax liability is determined by multiplying the applicable tax rate by the difference between the value of the shares underlying the options on the date of exercise and the aggregate exercise price of the options. These taxes will be recognized in the Condensed Consolidated Statement of Operations upon any subsequent sale of the shares acquired upon exercise of the options. Performance Share Units We have previously granted PSUs that vest in shares of our Common Stock upon the achievement of financial and operational targets specified in the respective award agreement. Based on our financial and operational results for the year ended December 31, 2023, 422,368 shares became issuable upon vesting of PSUs following the Compensation Committee's certification in April 2024. In May 2024, we also granted the 2024 Executive PSUs. The 2024 Executive PSUs may only be earned if certain stock price hurdles are met and the recipient satisfies certain service conditions. The achievement of the stock price hurdles is measured during a period that begins nine months after the award date of May 1, 2024 and ends on May 1, 2027. The 2024 Executive PSUs have four stock price hurdles: $14.86, $20.14, $31.01, and $68.82. The shares awarded under the 2024 Executive PSU award are divided equally between four tranches corresponding to achievement of each stock price hurdle. Once the stock price hurdle is achieved, a service condition must also be met before the shares will vest. Specifically, the service condition for: (i) 33% of the award will be met after the first anniversary of the award date; (ii) an additional 33% of the award will be met after the second anniversary of the award date; and (ii) the final 34% of the award will be met after the third anniversary of the award date. We determined these awards are subject to a market condition, and therefore used a Monte Carlo simulation to calculate the grant date fair value of the awards and the related derived service period. The three year service condition period exceeds the derived service period and therefore we will recognize the expense over the three year requisite service period. The key inputs used in the Monte Carlo simulation were the risk-free rate of 4.46%, dividend yield of 0.0% and our stock price volatility of 95.73%. Both our PSUs and the 2024 Executive PSUs are subject to continued service through the period dictated by the award and certification by the Compensation Committee that the specified performance conditions have been achieved. The table below summarizes PSU activity for the six months ended June 30, 2024:
| PSUs |  | Weighted-Average Grant Date Fair Value (per unit) | 2024 Executive PSUs |  | Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2023 | 506,324 |  |  | $ | 6.34 |  | — |  |  | $ | — |
Granted | — |  |  | — |  | 3,537,145 |  |  | 13.59 |
Vested | (422,368) |  |  | 6.35 |  | — |  |  | — |
Forfeited | (83,956) |  |  | 6.31 |  | — |  |  | — |
Unvested at June 30, 2024 | — |  |  | $ | — |  | 3,537,145 |  |  | $ | 13.59 |
As of June 30, 2024, $43.2 million of unrecognized compensation costs related to unvested PSUs are expected to be recognized over a remaining weighted-average period of 2.31 years. Rights Offering In November 2023, the Board approved an $80.0 million fully backstopped Rights Offering to our stockholders of record of our Common Stock, as of the close of business on November 20, 2023. The Rights Offering was made through the distribution of non-transferable subscription rights to purchase shares of Common Stock at a subscription price of $11.30 per share and otherwise on such terms and subject to such conditions as may be required to comply with any applicable Nasdaq Global Market stock exchange rules and regulations. The Expiration Date for the subscription period for the Rights Offering ended on January 17, 2024. The Rights Offering was fully backstopped by Pale Fire Capital SICAV a.s., the Backstop Party, an entity affiliated with (i) Dusan Senkypl, the Company’s Chief Executive Officer and a member of the Board, and (ii) Jan Barta, a member of the Board. The Backstop Party had a binding commitment to (i) fully exercise its pro rata subscription right prior to the Expiration Date of the Rights Offering and (ii) fully purchase any and all unsubscribed shares in the Rights Offering following the Expiration Date at the same price and on the same terms and conditions as other participants in the Rights Offering. On January 22, 2024, we announced the closing of our $80.0 million fully backstopped Rights Offering for shares of our Common Stock, par value $0.0001 per share. Pursuant to the terms of the Rights Offering, 7,079,646 shares of Common Stock were purchased at $11.30 per share, generating $80.0 million in gross proceeds, less issuance costs incurred. As detailed below, the Rights Offering was oversubscribed, and the subscriptions, inclusive of the exercise of all over-subscription privileges, well exceeded $80.0 million, the maximum aggregate offering size of the Rights Offering. Through the exercise of both basic subscription rights and over-subscription privileges, the Backstop Party subscribed for approximately 7.1 million shares and other stockholders subscribed for approximately 9.7 million shares. The Company is issuing 4,574,113 shares of Common Stock via the exercise of the basic subscription rights and 2,505,533 shares of Common Stock via the exercise of over-subscription privileges. The Backstop Party purchased approximately 3.1 million shares of Common Stock in connection with the Rights Offering.

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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 -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/505/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/718/tableOfContent + Details
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