Stock Based Compensation

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

Stock Based Compensation

11. STOCK-BASED COMPENSATION

For the three and six months ended June 30, 2019 and 2018, the Company recorded stock-based compensation expense related to stock options and restricted stock awards as follows (in thousands):

	For the three months ended				For the six months ended
	June 30,				June 30,
	2019		2018		2019		2018
General and administrative expense	$	6,892	$	7,035	$	15,929	$	12,807
Research and development expense		1,481		1,309		2,565		2,982
Sales and marketing expense		245		–		413		-
Total stock-based compensation expense	$	8,618	$	8,344	$	18,907	$	15,789

Incentive Compensation Plans

2019 Plan

On October 5, 2018, the Company’s Board of Directors (the “Board”) approved the Company’s 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers, directors and consultants. The Compensation Committee of the Board will administer the 2019 Plan, including determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards. Up to 3,000,000 shares of common stock are issuable pursuant to awards under the 2019 Plan. Unless earlier terminated by the Board, the 2019 Plan shall terminate at the close of business on October 5, 2028. As of June 30, 2019, the Company had approximately 1,857,972 shares available for future issuances under the 2019 Plan.

2017 Plan

On December 1, 2016, the Company’s Board of Directors (the “Board”) approved the Company’s 2017 Equity Incentive Plan (the “2017 Plan”). The purpose of the 2017 Plan is to promote the success of the Company and to increase stockholder value by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees, consultants and other eligible persons. The 2017 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers, directors and consultants. The Compensation Committee of the Board will administer the 2017 Plan, including determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards. Up to 7,300,000 (increased from 3,450,000 in October 2017) shares of common stock are issuable pursuant to awards under the 2017 Plan. Unless earlier terminated by the Board, the 2017 Plan shall terminate at the close of business on December 1, 2026. As of June 30, 2019, the Company had approximately 374,038 shares available for future issuances under the 2017 Plan.

Stock Options

A summary of the Company’s employee and non-employee stock option activity for the six months ended June 30, 2019 is presented below:

	Number of shares			Weighted-Average Exercise Price
Outstanding – December 31, 2018		6,499,885		$	14.02
Granted		767,201		$	14.36
Exercised (1)		(292,417	)	$	3.99
Forfeited		(370,208	)	$	7.81
Outstanding – June 30, 2019		6,604,461		$	14.30
Options exercisable – June 30, 2019		4,567,527		$	12.11
Weighted-average grant date fair value of options granted during the six months ended June 30, 2019				$	10.28

(1) The number of exercised options includes shares withheld on behalf of employees to satisfy minimum statutory tax withholding requirements.

Restricted Stock

A summary of the Company’s employee and non-employee restricted-stock activity for the six months ended June 30, 2019 is presented below:

	Number of shares			Weighted-Average Grant-Date Fair Value
Unvested - December 31, 2018		651,110		$	23.65
Granted		75,000		$	10.97
Vested (1)		(187,663	)	$	28.83
Forfeited		(45,000	)	$	22.46
Unvested – June 30, 2019		493,447		$	22.66

(1) The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.

Employee Stock Purchase Plan (ESPP)

In May 2018, the Company adopted the Employee Stock Purchase Plan (“ESPP”). The Company has initially reserved 500,000 shares of common stock for purchase under the ESPP. The initial offering period began January 1, 2019 and ended on June 30, 2019 with the first purchase date. Subsequent offering periods will automatically commence on each January 1 and July 1 and will have a duration of six months ending with a purchase date June 30 and December 31 of each year. On each purchase date, ESPP participants will purchase shares of common stock at a price per share equal to 85% of the lesser of (1) the fair market value per share of the common stock on the offering date or (2) the fair market value of the common stock on the purchase date. Total stock-based compensation related to the ESPP for the three and six months ended June 30, 2019 was immaterial to the condensed consolidated financial statements. A total of 7,260 shares of common stock were purchased pursuant to the ESPP during the six months ended June 30, 2019 for total proceeds of $35,000.