Share-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Note 10 – Share-Based Compensation

The Company’s share-based compensation awards are issued under the 2020 Equity Incentive Plan (2020 Plan), the predecessor 2016 Equity Incentive Plan (2016 Plan) and 2006 Equity Incentive Plan (2006 Plan). Any awards that expire or are forfeited under the 2016 Plan or 2006 Plan become available for issuance under the 2020 Plan. As of September 30, 2024, 809,163 shares of common stock remained available for future issuance under the 2020 Plan.

Share-Based Compensation Expense

Share-based compensation expense reported in the Company’s condensed statements of operations was (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Direct costs and expenses	$	20	$	17	$	54	$	41
Research and development		110		68		240		249
Sales, marketing, general and administrative		1,385		869		5,079		4,002
Total	$	1,515	$	954	$	5,373	$	4,292

The unrecognized remaining share-based compensation expense for options and RSUs was approximately $6.5 million as of September 30, 2024 and is expected to be amortized to expense over the next 2.2 years.

Stock Options

Stock option activity during the nine months ended September 30, 2024, excluding the Bonus Option Program described below, was (in thousands, except weighted average exercise price and weighted average contractual life):


	Number of Options			Weighted Average Exercise Price		Weighted Average Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding - January 1, 2024		2,041		$	3.36		6.9	$	964
Granted		2,226			1.67		—		—
Forfeited/canceled		(221	)		1.96		—		—
Exercised		(27	)		0.72		—		—
Outstanding ‑ September 30, 2024		4,019		$	2.52		7.9	$	1,250
Exercisable ‑ September 30, 2024		1,719		$	3.48		6.2	$	822

Restricted Stock Unit Activity

Restricted stock unit activity during the nine months ended September 30, 2024 was (in thousands, except weighted average grant date fair value per share):


	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Outstanding ‑ January 1, 2024		2,729		$	1.91
Granted		1,670			1.81
Forfeited/canceled		(15	)		1.92
Released		(591	)		2.01
Outstanding ‑ September 30, 2024		3,793		$	1.85

Bonus-to-Options Program

The Company also has a Bonus-to-Options Program (the Bonus Option Program) which allows participants who so elect to convert a portion of their annual cash bonus into fully vested, non-qualified stock options to purchase shares of common stock. Participation is limited to the Chief Executive Officer, direct reports to the Chief Executive Officer and Vice Presidents of the Company. As part of the Bonus Option Program, the Company recorded the following activity during the nine months ended September 30, 2024 (in thousands, excepted weighted average exercise price and weighted average contractual life):


	Number of Options			Weighted Average Exercise Price		Weighted Average Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding ‑ January 1, 2024		1,050		$	2.81		8.4	$	22
Granted		341			1.46		—		—
Forfeited/canceled		(27	)		24.34		—		—
Exercised		—			—		—		—
Outstanding ‑ September 30, 2024		1,364		$	2.04		8.2	$	129
Exercisable ‑ September 30, 2024		1,364		$	2.04		8.2	$	129

The Company recorded $0.3 million and $0.7 million for the three and nine months ended September 30, 2024, respectively, compared to an insignificant amount and $0.2 million for the three and nine months ended September 30, 2023, respectively, related to the estimate of the Bonus Option Program. Options granted, if any, pertaining to the performance of the Bonus Option Program are typically approved and granted in first quarter of the year following completion of the fiscal year.

Employee Stock Purchase Plan

The ESPP provides for successive six-month offering periods beginning on September 1st and March 1st of each year. During the nine months ended September 30, 2024, 471,843 shares were issued under the ESPP leaving 175,275 shares reserved for future issuance.