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Stock-Based Compensation
 3 Months Ended
Mar. 31, 2023
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

Note 6. Stock-Based Compensation

 

Common Stock Equity Plans

 

In 2010, the Company adopted the 2010 Equity Incentive Plan and later amended it in 2014, 2017 and 2018 (the Amended 2010 Plan). The Amended 2010 Plan was terminated in August 2019 and remains in effect as to outstanding equity awards granted prior to the date of expiration. No new awards may be made under the Amended 2010 Plan.

 

In August 2019, the Company’s stockholders approved the 2019 Stock Incentive Plan (the 2019 Plan) to replace the Amended 2010 Plan. The 2019 Plan authorizes the board of directors or the compensation committee of the board of directors to grant a broad range of awards including stock options, stock appreciation rights, restricted stock, performance-based awards, and restricted stock units. Under the 2019 Plan, 182,500 shares were initially reserved for issuance. In November 2021, in connection with the approval of the Arrangement, the Company’s stockholders approved an amendment increasing the number of shares reserved for issuance under the 2019 Plan by 3,106,937 shares.

 

Under the 2019 Plan, the term of all incentive stock options granted to a person who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of the Company’s stock may not exceed five years. The exercise price of stock options granted under the 2019 Plan must be at least equal to the fair market value of the shares on the date of grant. Generally, awards under the 2019 Plan will vest over a three to four-year period, and options will have a term of 10 years from the date of grant. In addition, the 2019 Plan provides for automatic acceleration of vesting for options granted to non-employee directors upon a change of control of the Company.

 

In connection with the Arrangement, the Company assumed the Peraso Technologies Inc. 2009 Share Option Plan (the 2009 Plan) and all outstanding options granted pursuant to the terms of the 2009 Plan. Each outstanding, unexercised and unexpired option under the 2009 Plan, whether vested or unvested, was assumed by the Company and converted into options to purchase shares of the Company’s common stock No further awards will be made under the 2009 Plan.  

 

The 2009 Plan, the Amended 2010 Plan and the 2019 Plan are referred to collectively as the “Plans.”

 

Stock-Based Compensation Expense

 

The Company reflected compensation costs of $1.1 million related to the vesting of stock options during each of the three-month periods ended March 31, 2023 and 2022, respectively. At March 31, 2023, the unamortized compensation cost was approximately $6.6 million related to stock options and is expected to be recognized as expense over a weighted average period of approximately 1.6 years. The Company reflected compensation costs of $0.2 million and $0.1 million related to the vesting of restricted stock during the three months ended March 31, 2023 and 2022, respectively. The unamortized compensation cost at March 31, 2023 was $1.8 million related to restricted stock units and is expected to be recognized as expense over a weighted average period of approximately 1.8 years. There were no stock options granted or exercised during the three months ended March 31, 2023 and 2022. 

 

Common Stock Options and Restricted Stock

 

The term of all incentive stock options granted to a person who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of the Company’s stock may not exceed five years. The exercise price of stock options granted under the 2019 Plan must be at least equal to the fair market value of the shares on the date of grant. Generally, options granted under the 2019 Plan will vest over a three to four-year period and have a term of 10 years from the date of grant. In addition, the 2019 Plan provides for automatic acceleration of vesting for options granted to non-employee directors upon a change of control (as defined in the 2019 Plan) of the Company.

 

The following table summarizes the activity in the shares available for grant under the Plans during the three months ended March 31, 2023 (in thousands, except exercise price):

 

       Options Outstanding 
           Weighted 
   Shares       Average 
   Available   Number of   Exercise 
   for Grant   Shares   Prices 
Balance as of December 31, 2022   1,556    1,499   $3.32 
RSUs granted   (80)   —   $— 
RSUs cancelled and returned to the Plans   51    —   $— 
Options cancelled   —    (17)  $6.76 
Balance as of March 31, 2023   1,527    1,482   $3.28 

 

A summary of RSU activity under the Plans is presented below (in thousands, except for fair value):

 

       Weighted 
       Average 
   Number of   Grant-Date 
   Shares   Fair Value 
Non-vested shares as of December 31, 2022   1,057   $2.06 
Granted   80   $0.99 
Vested   (51)  $2.07 
Non-vested shares as of March 31, 2023   1,086   $1.98 

 

The following table summarizes significant ranges of outstanding and exercisable options as of March 31, 2023 (in thousands, except contractual life and exercise price):

 

   Options Outstanding   Options Exercisable 
       Weighted                 
       Average                 
       Remaining   Weighted       Weighted     
       Contractual   Average       Average   Aggregate 
   Number   Life   Exercise   Number   Exercise   Intrinsic 
Range of Exercise Price  Outstanding   (in Years)   Price   Exercisable   Price   value 
$1.57 - $14.99   1,472    7.41   $2.64    920   $2.60   $— 
$15.00 - $25.59   4    0.49   $15.00    4   $15.00   $— 
$25.60 - $143.99   1    1.43   $50.00    1   $50.00   $— 
$144.00 - $409.99   4    3.19   $144.00    4   $144.00   $— 
$410.00 - $924.00   1    1.45   $410.00    1   $410.00   $— 
$1.57 - $924.00   1,482    7.38   $3.28    930   $3.60   $—