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Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Stock-Based Compensation

Stock-Based Compensation

NOTE 5: Stock-Based Compensation

Equity Incentive Plans

In April 2014, the Board of Directors adopted the 2014 Equity Incentive Plan (the “2014 Plan”) allowing for the issuance of up to 2,000,000 shares of common stock through grants of options, stock appreciation rights, restricted stock or restricted stock units. In December 2016, the 2014 Plan was terminated, and the Company’s Board of Directors adopted a new equity incentive plan defined as the 2016 Equity Incentive Plan (the “2016 Plan”) in which the remaining 1,936,014 shares available for issuance under the 2014 Plan at that time were transferred to the Company’s 2016 Plan. Awards outstanding under the 2014 Plan at the time of the 2014 Plan’s termination will continue to be governed by their existing terms. The shares underlying any awards that are forfeited, canceled, repurchased or are otherwise terminated by the Company under the 2014 Plan will be added back to the shares of common stock available for issuance under the Company’s 2016 Plan. The 2016 Plan provides for the granting of stock awards such as incentive stock options, non - statutory stock options, stock appreciation rights, restricted stock or restricted stock units to employees, directors and outside consultants as determined by the Board of Directors.

On June 23, 2022, following approval by the Board of Directors, the Company’s stockholders adopted the 2022 Equity Incentive Plan (the “2022 Plan”) allowing for the issuance of up to 5,000,000 shares of Class A Common Stock through grants of options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards, and other stock or cash-based awards. In connection with the adoption of the 2022 Plan, shares previously available for issuance under the 2016 Plan became available for issuance under the 2022 Plan. The number of shares authorized under the 2022 Plan will be increased each January 1^st, beginning January 1, 2023 and ending on (and including) January 1, 2032, by an amount equal to the lesser of (a) 5% of our Class A Common Stock and Class B Common Stock outstanding on December 31st of the immediately preceding calendar year (rounded up to the nearest whole share) and (b) a number of shares determined by the plan administrator. Shares subject to awards (including under the 2016 Plan and the 2014 Plan) that lapse, expire, terminate, or are canceled prior to the issuance of the underlying shares or that are subsequently forfeited to or otherwise reacquired by us will be added back to the shares of common stock available for issuance under the 2022 Plan.

The Board of Directors may grant stock options under the 2022 Plan at an exercise price of not less than 100% of the fair market value of the Company’s common stock on the date the option is granted. Options generally have a term of ten years from the date of grant. Incentive stock options granted to employees who, on the date of grant, own stock representing more than 10% of the voting power of all of the Company’s classes of stock, are granted at an exercise price of not less than 110% of the fair market value of the Company’s common stock. The maximum term of incentive stock options granted to employees who, on the date of grant, own stock having more than 10% of the voting power of all of the Company’s classes of stock, may not exceed five years. The Board of Directors also determines the terms and conditions of awards, including the vesting schedule and any forfeiture provisions. Options granted under the 2022 Plan may vest upon the passage of time, generally four years, or upon the attainment of certain performance criteria established by the Board of Directors. The Company may from time-to-time grant options to purchase common stock to non-employees for advisory and consulting services. At each measurement date, the Company will remeasure the fair value of these stock options using the Black - Scholes option pricing model and recognize the expense ratably over the vesting period of each stock option award. Stock options comprise all of the awards granted since the 2022 Plan’s inception.

Stock option activity under all of the Company’s equity incentive plans for the three-month period ended of March 31, 2024 is as follows:


									Weighted
						Weighted			Average
		Shares		Number of		Average			Remaining		Aggregate
		Available for		Shares		Exercise			Contractual		Intrinsic
		Grant		Outstanding		Price			Life (Years)		Value (000’s)
Available and outstanding as of December 31, 2023		99,363		10,069,394		$	2.72		7.14		$	141
Granted		(20,000)		20,000			0.64
Exercised		—		—
Forfeited		1,225,092		(1,225,092)			4.96
Available and outstanding as of March 31, 2024		1,304,455		8,864,302		$	2.40		7.07		$	80
Vested and exercisable as of March 31, 2024				6,446,174		$	2.20		6.49		$	75

The weighted average grant date fair value of options granted during the three months ended March 31, 2024 was $0.36 per share. There were no options exercised during the three month period ended March 31, 2024 compared to 213,020 options exercised in the prior year period. The fair value of the options that vested during the three months ended March 31, 2024 and 2023 was $345 and $793, respectively.

As of March 31, 2024, the Company had unamortized stock-based compensation expense of $2.3 million that will be recognized over the weighted average remaining vesting term of options of 2.52 years.

The assumptions utilized for option grants during the three-month periods ended March 31, 2024 and 2023 are as follows:


		Three months ended
		March 31,
		2024		2023
Risk-free interest rate		4.49	%	3.76	%
Expected dividend yield		—	%	—	%
Expected volatility		54.89	%	54.09	%
Expected term (in years)		6.02		5.99

A summary of stock-based compensation expense recognized in the Company’s condensed statements of operations is as follows:


		Three months ended
		March 31,
		2024			2023
Cost of services		$	57		$	93
Research and development			122			—
Sales and marketing			48			53
General and administrative			107			300
Total		$	334		$	446