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Stockholders' Equity | 9 Months Ended
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Sep. 30, 2024
Equity [Abstract] |
Stockholders' Equity | 9. Stockholders’ equity The Company has a 2014 Equity Incentive Plan (2014 Plan) under which the Company granted restricted stock units, restricted stock awards, performance units, performance shares, and options to purchase shares of its common stock. As of September 30, 2024, awards with respect to 309,330 s hares of the Company’s common stock were outstanding. The Company’s stockholders approved the adoption of the Amended and Restated 2023 Equity Incentive Plan (2023 Plan) on June 5, 2024 that provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to the Company’s employees and any parent and subsidiary corporation’s employees, and for the grant of nonstatutory stock options, restricted stock, restricted stock units, restricted stock awards, stock appreciation rights, performance units and performance shares to its employees, directors and consultants and its parent and subsidiary corporations’ employees and consultants. The 2023 Plan became effective June 7, 2024. The number of shares of common stock reserved for issuance under the 2023 Plan was: (i) 1,600,000 shares, plus (ii) (A) 2,027,790 shares that, as of immediately before the termination or expiration of the 2014 Plan, had been reserved but not issued under any 2014 Plan awards and are not subject to any awards granted under the 2014 Plan, plus (B) any shares subject to awards granted under the 2014 Plan or the 2012 Plan that, after the 2014 Plan is terminated or expired, expire or otherwise terminate without having been exercised or issued in full or are forfeited to or repurchased by the Company due to failure to vest with the maximum number of shares that may be added to the 2023 Plan under subsection (ii) above equal to 2,950,000 shares. As of September 30, 2024, awards with respect to 1,406,814 shares of the Company's common stock were outstanding, and 2,367,813 shares of common stock remained available for issuance under the 2023 Plan. The shares available for issuance under the 2023 Plan will be increased by any shares returned to the 2014 Plan as a result of expiration or termination of awards. Pursuant to the Nasdaq inducement grant exception, during the nine months ended September 30, 2024, the Company issued 225,000 shares of common stock to a certain new hire issuable upon (i) the vesting of a maximum of 75,000 time-based restricted stock units granted, and (ii) the vesting of a maximum of 150,000 shares of performance-based restricted stock units granted to induce the employee to accept employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). Stock options Options expired ten years from the date of grant and vest over one-year terms. The activity for stock options under the Company’s stock plans for the nine months ended September 30, 2024 is as follows:
|  |  |  |  |  |  |  |  |  |  | Remaining |  |  |  |
|  |  |  |  |  |  |  |  |  |  | weighted- |  |  |  |
|  |  |  |  |  |  |  | Weighted- |  |  | average |  |  | Per share |
|  |  |  |  |  |  |  | average |  |  | contractual |  |  | average |
|  |  |  |  | Price per |  |  | exercise |  |  | terms |  |  | intrinsic |
|  | Options |  |  | share |  |  | price |  |  | (in years) |  |  | value |
Outstanding as of December 31, 2023 |  |  | 20,000 |  |  | $ | 83.30 |  |  | $ | 83.30 |  |  |  | 0.36 |  |  | $ | — |
Forfeited |  |  | (10,000 | ) |  |  | 83.30 |  |  |  | 83.30 |  |  |  |  |  |  |
Expired |  |  | (10,000 | ) |  |  | 83.30 |  |  |  | 83.30 |  |  |  |  |  |  |
Outstanding as of September 30, 2024 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Vested and exercisable as of September 30, 2024 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Vested and expected to vest as of September 30, 2024 |  |  | — |  |  | $ | — |  |  | $ | — |  |  |  | — |  |  | $ | — |
The total intrinsic value of options exercised during the nine months ended September 30, 2024 and 2023 was $0 and $735, respectively. As of September 30, 2024, all stock-based compensation expense for options granted under the 2014 and 2023 Plans was recognized. Stock incentive awards The Company grants restricted stock units (RSUs) under the 2014 and 2023 Plans (Stock Awards). The Stock Awards vest either based solely on the satisfaction of time-based service conditions or on the satisfaction of time-based service conditions combined with performance market criteria. Stock Awards are subject to forfeiture if the holder’s services to the Company terminate before vesting. Stock Awards granted with only time-based service vesting conditions generally vest over three-year and four-year service periods, as defined in the terms of each award. Stock Awards that vest based on the satisfaction of time-based service conditions combined with performance criteria generally vest over a three-year service and performance period, based on performance and/or market conditions established at the time of the award. The portion of the Stock Award that is earned may equal or be more or less than the targeted number of shares subject to the Stock Award depending on whether the performance criteria are met. Stock Awards activity for the nine months ended September 30, 2024 is summarized below:
|  |  |  |  |  |  |  |  |  |  | Weighted- |
|  |  |  |  |  |  |  |  |  |  | average |
|  |  |  |  |  |  |  |  |  |  | grant |
|  |  |  |  | Performance |  |  |  |  |  | date fair |
|  |  |  |  | and |  |  |  |  |  | value |
Restricted stock units |  | Time-based |  |  | time-based |  |  | Total |  |  | per share |
Unvested restricted stock units as of December 31, 2023 |  |  | 1,146,404 |  |  |  | 346,688 |  |  |  | 1,493,092 |  |  | $ | 14.67 |
Granted |  |  | 857,447 |  |  |  | 587,768 |  |  |  | 1,445,215 |  |  |  | 7.23 |
Vested |  |  | (389,244 | ) |  |  | — |  |  |  | (389,244 | ) |  |  | 18.03 |
Forfeited/canceled |  |  | (292,994 | ) |  |  | (314,925 | ) |  |  | (607,919 | ) |  |  | 14.26 |
Unvested restricted stock units as of September 30, 2024 (1) |  |  | 1,321,613 |  |  |  | 619,531 |  |  |  | 1,941,144 |  |  | $ | 8.65 |
Unvested and expected to vest restricted stock units outstanding as of September 30, 2024 |  |  |  |  |  |  |  |  | 1,499,262 |  |  | $ | 8.69 |
(1) Outstanding restricted stock units are based on the maximum payout of the targeted number of shares. As of September 30, 2024, the unrecognized compensation cost related to unvested employee restricted stock units was $9,289, excluding estimated forfeitures. This amount is expected to be recognized over a weighted average period of 1.8 years. Employee stock purchase plan The Company’s 2014 Employee Stock Purchase Plan (ESPP) provides for the grant to all eligible employees an option to purchase stock under the ESPP, within the meaning Section 423 of the Internal Revenue Code. The ESPP permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation, which includes a participant’s base straight time gross earnings, incentive compensation, bonuses, overtime, and shift premium, but exclusive of payments for equity compensation and other similar compensation. A participant may purchase a maximum of 1,500 shares during a purchase period. Amounts deducted and accumulated by the participant are used to purchase shares of the Company’s common stock at the end of each six-month period. The purchase price of the shares will be 85% of the lower of the fair market value of the Company’s common stock on the first trading day of each offering period or on the exercise date. The offering periods are currently approximately six months in length beginning on the first business day on or after March 1 and September 1 of each year and ending on the first business day on or after September 1 and March 1 approximately six months later. As of September 30, 2024, a total of 585,409 shares of common stock were available for sale pursuant to the ESPP. The number of shares available for sale under the ESPP is increased annually on the first day of each fiscal year by an amount equal to the least of: • 179,069 shares; • 1.5% of the outstanding shares of the Company’s common stock on the last day of the Company’s immediately preceding fiscal year; or • such other amount as may be determined by the administrator. For 2024, an additional 179,069 shares were added to the ESPP share reserve pursuant to the provision described above. Stock-based compensation Stock-based compensation expense recognized for the three and nine months ended September 30, 2024 and 2023, was as follows:
|  | Three months ended |  |  | Nine months ended |
|  | September 30, |  |  | September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Stock-based compensation expense by type of award: |  |  |  |  |  |  |  |  |  |  |  |
Restricted stock units and restricted stock awards |  | $ | 1,362 |  |  | $ | 1,682 |  |  | $ | 5,367 |  |  | $ | 8,164 |
Employee stock purchase plan |  |  | 112 |  |  |  | 97 |  |  |  | 337 |  |  |  | 320 |
Total stock-based compensation expense |  | $ | 1,474 |  |  | $ | 1,779 |  |  | $ | 5,704 |  |  | $ | 8,484 |
Employee stock-based compensation expense was calculated based on awards of stock options, restricted stock units and restricted stock awards ultimately expected to vest based on the Company’s historical award cancellations. ASC 718 – Compensation-Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For the three and nine months ended September 30, 2024 and 2023, respectively, stock-based compensation expense recognized under ASC 718, included in cost of revenue, research and development expense, sales and marketing expense, and general and administrative expense was as follows:
|  | Three months ended |  |  | Nine months ended |
|  | September 30, |  |  | September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Cost of revenue |  | $ | 123 |  |  | $ | 164 |  |  | $ | 448 |  |  | $ | 401 |
Research and development |  |  | 68 |  |  |  | 358 |  |  |  | 453 |  |  |  | 1,192 |
Sales and marketing |  |  | 363 |  |  |  | (255 | ) |  |  | 1,221 |  |  |  | 1,177 |
General and administrative |  |  | 920 |  |  |  | 1,512 |  |  |  | 3,582 |  |  |  | 5,714 |
Total stock-based compensation expense |  | $ | 1,474 |  |  | $ | 1,779 |  |  | $ | 5,704 |  |  | $ | 8,484 |

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