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Stock–Based Compensation
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock–Based Compensation

21. Stock–Based Compensation

 

The Company issued stock-based compensation awards under several plans as follows:

 

●2016 Plan – On December 19, 2016, the Board adopted the 2016 Stock Incentive Plan (the “2016 Plan”) that allowed the Company to grant restricted stock awards and statutory and non-statutory common stock options to acquire shares of the Company’s common stock to employees, directors and consultants, with vesting variable vesting provisions consisting of time-based and performance-based. The Company is no longer issuing awards under the 2016 Plan.
   
●2019 Plan – On April 4, 2019, the Board adopted the 2019 Equity Incentive Plan (the “2019 Plan”) that allowed awards of stock options, restricted stock awards, restricted stock units, unrestricted stock awards, and stock appreciation rights, with variable vesting provisions consisting of time-based, performance-based, or market-based. The Company is no longer issuing option awards under the 2019 Plan.
   
●Outside Options – The Company granted stock options outside the 2016 Plan and 2019 Plan (the “Outside Options”) that allowed the Company to grant statutory and non-statutory common stock options, with variable vesting provisions consisting time-based, performance-based targets and certain performance achievements. The Company is no longer issuing Outside Options.
   
●2022 Plan – On April 18, 2022, the Board adopted the 2022 Stock and Equity Compensation Plan (the “2022 Plan”) that was approved by the Company’s stockholders on June 2, 2022 with a maximum number of shares authorized to be issued under the plan of 1,800,000. The purpose of the 2022 Plan is to foster the growth and success of the Company by providing a means to attract, motivate and retain officers, directors, key employees, and consultants through awards of stock options, stock appreciation rights, restricted stock awards, unrestricted stock awards and restricted stock units. Shares subject to an award that have been canceled, expired, settled in cash, or not issued or forfeited for any reason will not reduce the aggregate number of shares that may be subject to or delivered under the 2022 Plan and will be available for future awards granted under the 2022 Plan. Common stock options issued under the 2022 Plan may have a term of up to ten years and may have variable vesting provisions based on time and performance. The issuance of awards under the 2022 Plan is administered by the Board or any committee of directors designated by the Board.

 

Restricted Stock Units

 

During the years ended December 31, 2024 and 2023, the Company issued restricted stock units to various employees and members of the board subject to continued service. Upon vesting of the award, subject to certain conditions for release of the award, the Company issues the underlying common stock of the Company.

 

The fair value of a restricted stock unit was determined based on the number of shares granted and the quoted price of the Company’s common stock on the date issued during the years ended December 31, 2024, and 2023.

 

A summary of the restricted stock unit activity during the year ended December 31, 2024 is as follows:

 

   Number of Shares   Weighted Average Grant-Date Fair 
   Unvested   Vested   Value 
Restricted stock units outstanding at January 1, 2024   199,267    612,871   $13.55 
Granted   222,396    -    1.55 
Vested   (366,491)   366,491    4.11 
Issuance of common stock for restricted stock units   -    (971,863)     
Cancelled   (39,615)   -    8.72 
Restricted stock units outstanding at December 31, 2024   15,557    7,499    6.99 

 

 

On February 28, 2023 and June 30, 2023, the Company modified certain restricted stock units as a result of the resignation of two senior executives, where 38,026 and 42,635 restricted stock units with time-based vesting that were unvested were vested, respectively, subject to certain provisions, resulting in no incremental cost.

 

The aggregate grant date fair value of restricted stock units that vested during the year ended December 31, 2024 was $1,507.

 

The Company’s policy is to repurchase the number of shares of its common stock at the fair market value at the time of issuance of new shares of its common stock upon conversion of a restricted stock unit to cover the tax obligations. During the year ending December 31, 2025, the Company expects to repurchase approximately 6,000 shares of its common stock to cover the tax obligations upon the conversion of restricted stock units that are expected to vest and be released during the period.

 

The total intrinsic value of shares of the Company’s common stock issued for restricted stock units that were released during the years ended December 31, 2024 and 2023 were $454 and $2,955, respectively.

 

Common Stock Options

 

During the years ended December 31, 2024 and 2023, the Company issued common stock options under the 2022 Plan, consisting of primarily of incentive stock options with a term of up to ten years with time-based vesting provisions over three years.

 

The fair value of common stock option awards granted during the years ended December 31, 2024 and 2023 was calculated using a Black-Scholes options-pricing model for the time-based awards under the Up-list Scenario, after the Company’s common stock was listed on the NYSE American. The assumptions utilized are as follows:

 

   Years Ended December 31, 
   2024   2023 
   Up-list   Up-list 
Risk-free interest rate   3.85% - 3.98%   3.46% - 4.82%
Expected dividend yield   0.00%   0.00%
Expected volatility   47.32% - 47.35%   46.43% - 47.27%
Expected life   6 years    6 years 

 

 

A summary of the common stock option activity during the year ended December 31, 2024 is as follows:

 

           Weighted 
           Average 
       Weighted   Remaining 
   Number   Average   Contractual 
   of   Exercise   Life 
   Shares   Price   (in Years) 
Common stock options outstanding at January 1, 2024   5,451,968   $9.56    4.43 
Granted   22,843    0.35      
Forfeited   (401,489)   7.58      
Expired   (2,129,646)   9.20      
Common stock options outstanding at December 31, 2024   2,943,676    10.03    2.98 
Common stock options exercisable at December 31, 2024   2,265,249    10.06    3.72 
Common stock options not vested at December 31, 2024   678,427           
Common stock options available for future grants at December 31, 2024 (1)   1,338,225           

 

(1)Common stock available for future issuance under the 2022 Plan represent 1,800,000 of authorized shares; less 422,052 common stock options outstanding and 19,723 restricted stock units outstanding.

 

The aggregate grant date fair value of common stock options granted during the years ended December 31, 2024 and 2023 was $4 and $610, respectively. The weighted-average grant-date fair value of common stock options granted during the years ended December 31, 2024 and 2023 were $0.18 and $2.21, respectively.

 

The total intrinsic value of common stock options exercised during the years ended December 31, 2024 and 2023 were $0 and $10, respectively. The total fair value of common stock options vested during the years ended December 31, 2024 and 2023 were $2,412 and $10,155, respectively.

 

The unvested common stock options for which the vesting is expected based on achievement of a performance condition as of December 31, 2024 were 583,143 with a weighted average remaining contractual term of 4.28 years.

 

The Company’s policy is to repurchase the number of shares of its common stock at the fair market value at the time of issuance of its common stock upon exercise of common stock options to cover the tax obligations and any cashless exercise.

 

As of December 31, 2024, there was no intrinsic value of exercisable, in-the-money common stock option awards and no aggregate intrinsic value of all outstanding, in-the-money options, including both exercisable and unvested options, based on the fair market value of the Company’s common stock trading price at December 31, 2024 of $1.34 per share.

 

 

Modification of Awards – On February 28, 2023, the Company modified certain equity awards as a result of the resignation of a senior executive employee where 38,026 restricted stock units with time-based vesting that were unvested were vested and 21,117 options to purchase shares of the Company’s common stock with time-based vesting that were unvested were vested, each subject to compliance with applicable securities laws and certain other provisions. In connection with the modification of these equity awards, the Company agreed to purchase a total of 45,632 options to purchase shares of the Company’s common stock (including previously vested options to purchase shares of the Company’s common stock of 24,515) as of the resignation date of the employee at a price of $10.29 per share, reduced by the exercise price and required tax withholdings, subject to certain conditions. The modification of the equity awards resulted in the unamortized costs being recognized at the modification date. The cash price of $10.29 per option less the strike price of $8.82 per option resulted in incremental cost of $68 being recognized at the modification date. The modification resulted in liability classification of the equity awards, with $68 paid during the year ended December 31, 2024.

 

On June 30, 2023, the Company modified certain equity awards upon the resignation of a senior executive employee pursuant to which unvested restricted stock units for 42,635 shares of the Company’s common stock vested, and unvested options for 29,701 shares of the Company’s common stock vested with the exercise period extended for the 10-year contractual term of the options from the grant date of the award. In connection with the termination, the unamortized costs of the awards of $773 was recognized at the termination date and $284 of incremental cost was recognized as a result of the option award modification upon termination of the senior executive.

 

On November 2, 2023, the Company modified options of former a senior executive officer for 450,560 shares of the Company’s common stock, pursuant to which the exercise period would be extended for the 10-year contractual term from the grant date of the award subject to continued employment through the closing date of the Business Combination (see Note 24) (the “conditions”). Incremental costs in connection with the modification was $380, of which no cost was recognized at the modification date since the conditions were not satisfied and the employment of the officer was terminated.

 

ABG Warrants

 

In connection with the Licensing Agreement and issuance of the ABG Warrants to purchase up to 999,540 shares of the Company’s common stock, the Company recorded the issuance of the warrants as stock-based compensation with the fair value of the warrants measured at the time of issuance and expensed over the requisite service period.

 

A summary of the ABG Warrant activity during the year ended December 31, 2024 is as follows:

 

   Number of Shares   Weighted Average   Weighted Average Remaining Contractual Life 
   Unvested   Vested   Exercise Price   (in years) 
ABG Warrants outstanding at January 1, 2024   599,724    399,816   $11.55    5.46 
Vested   (599,724)   599,724    -    - 
ABG Warrants outstanding at December 31, 2024   -    999,540    11.55    4.45 

 

There was no intrinsic value of exercisable but unexercised in-the-money ABG Warrants as of December 31, 2024 based on a fair market value of the Company’s common stock of $1.34 per share on December 31, 2024. Information on the acceleration of the vesting of the ABG Warrants is provided in Note 27.

 

 

Publisher Partner Warrants

 

Publisher Partner Warrants – Publisher Partner Warrants outstanding as of January 1, 2023, totaling 4,154, expired during the year ended December 31, 2023. As of December 31, 2024 and 2023, there are no Publisher Partner Warrants outstanding.

 

A summary of the Publisher Partner Warrants activity during the year ended December 31, 2024 is as follows:

 

           Weighted 
           Average 
       Weighted   Remaining 
   Number   Average   Contractual 
   of   Exercise   Life 
   Shares   Price   (in Years) 
Publisher Partner Warrants outstanding at January 1, 2024   9,800   $6.91    4.15 
Granted   -    6.91    3.15 
Publisher Partner Warrants outstanding at December 31, 2024   9,800    7.11    3.14 
Publisher Partner Warrants exercisable at December 31, 2024   6,062           
Publisher Partner Warrants not vested at December 31, 2024   3,738           
Publisher Partner Warrants available for future grants at December 31, 2024   23,200           

 

There was no intrinsic value of exercisable but unexercised in-the-money Publisher Partner Warrants since the fair market value of $1.34 per share of the Company’s common stock was lower than the exercise prices on December 31, 2024.

 

Stock-Based Compensation

 

Stock–based compensation and equity-based expense charged to operations or capitalized during the years ended December 31, 2024 and 2023 are summarized as follows:

 

   Year Ended December 31, 2024 
   Restricted Stock   Equity Plans   Warrants   Totals 
Cost of revenue  $119   $745   $13   $877 
Selling and marketing   20    187    -    207 
General and administrative   909    432    -    1,341 
Total costs charged to operations   1,048    1,364    13    2,425 
Capitalized platform development   -    259    -    259 
Total stock-based compensation  $1,048   $1,623   $13   $2,684 

 

 

   Year Ended December 31, 2023 
   Restricted Stock   Equity Plans   Warrants   Totals 
Cost of revenue  $2,092   $2,136   $10   $4,238 
Selling and marketing   257    961    -    1,218 
General and administrative   6,372    3,454    1,010    10,836 
Total costs charged to operations   8,721    6,551    1,020    16,292 
Capitalized platform development   -    1,016    -    1,016 
Total stock-based compensation  $8,721   $7,567   $1,020   $17,308 

 

Unrecognized compensation expense related to the stock-based compensation awards and equity-based awards as of December 31, 2024 was as follows:

 

   As of December 31, 2024 
   Restricted Stock   Equity Plans   ABG Warrants   Totals 
Unrecognized compensation expense  $451   $1,015   $19   $1,485 
Weighted average period expected to be recognized (in years)   0.93    1.02    1.52    1.00