Stockholder’s Equity

Preferred Stock

The total number of shares of preferred stock, $.001 par value, that the Company is authorized to issue is 5,000,000.

The Board of Directors may, without further action by the stockholders, issue a series of Preferred Stock and fix the rights and preferences of those shares, including the dividend rights, dividend rates, conversion rights, exchange rights, voting rights, terms of redemption, redemption price or prices, liquidation preferences, the number of shares constituting any series and the designation of such series.

On March 1, 2017, the Company filed with the Secretary of State of the State of Delaware a Certificate of Elimination of the 1,000,000 shares of Series A-1 Preferred Stock that effectuated the elimination of the Series A-1 Preferred Stock, which then resumed the status of authorized but unissued shares of preferred stock. As of December 31, 2017, there were no longer any Series A-1 shares authorized or issued and outstanding.

Common Stock

The total number of shares of common stock, $0.001 par value, that the Company is authorized to issue is 100,000,000.

In March 2017, the Company completed the underwritten public offering and sale of 9,200,000 shares (the “Shares”) of common stock at a price to the public of $5.00 per share. The net proceeds from the sale of the Shares, after deducting the underwriters’ discount and other offering expenses, were approximately $43.0 million. The Offering was conducted pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-190535) filed with the SEC under the Securities Act of 1933, as amended (the “Securities Act”) and declared effective on April 18, 2014.

The Company issued shares of common stock of 2,080,648 and 4,693,918 related to exercises of stock options, 1,013,763 and 934,991 related to restricted stock awards and 675,000 and 1,763,340 related to the exercise of warrants during the year ended December 31, 2017 and 2016, respectively. During the year ended December 31, 2016, 200,000 warrants expired. No warrants expired during the year ended December 31, 2017.

In September 2015, the Board of Directors authorized a $1 million share repurchase program (the “2015 Repurchase Program”) relating to the Company’s common stock. In October 2015, the Board of Directors increased the authorized amount to $3 million. The 2015 Repurchase Program expired on April 30, 2016. The Company did not repurchase any of our common stock under the 2015 Repurchase Program.

On August 29, 2016, the Board of Directors authorized a $15 million share repurchase program (the “2016 Repurchase Program”). Repurchases under the 2016 Repurchase Program will be made in the open market or through privately negotiated transactions intended to comply with SEC Rule 10b-18, subject to market conditions, applicable legal requirements, and other relevant factors. The 2016 Repurchase Program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended at any time at the Company’s discretion. During the year ended December 31, 2016, the Company repurchased 848,145 shares for an aggregate purchase price of $5.0 million. These shares were immediately retired.

Stock-Based Compensation

The fair values of share-based payments are estimated on the date of grant using the Black-Scholes option pricing model, based on weighted average assumptions. Expected volatility is based on historical volatility of the Company’s common stock. The risk-free rate is based on the U.S. Treasury yield curve in effect over the expected term at the time of grant. Compensation expense is recognized on a straight-line basis over the requisite service period of the award. During 2017, 2016 and 2015, the Company continued to use the simplified method to determine the expected option term since the Company’s stock option exercise experience does not provide a reasonable basis upon which to estimate the expected option term.

The Company began granting restricted stock awards (“RSAs”) to its employees in April 2013. The cost of the RSAs is determined using the fair value of the Company’s common stock on the date of grant. Stock-based compensation expense for RSAs is amortized on a straight-line basis over the requisite service period. RSAs generally vest over a three-year period with 33% vesting at the end of one year and the remaining vesting annually thereafter.

The assumptions used in calculating the fair value of stock-based awards represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future.

Stock-based compensation expense includes incremental stock-based compensation expense and is allocated on the consolidated statements of operations and comprehensive income (loss) as follows:



	For the Years Ended December 31,
	2017		2016		2015
Sales and marketing	$	439,797	$	354,088	$	309,708
Product development and content	4,008,545		1,528,547		1,197,696
General and administrative	4,018,936		1,685,352		1,409,023
Total stock-based compensation for vesting of options and RSA's	8,467,278		3,567,987		2,916,427
Warrant modification	—		—		425,538
Total stock-based compensation expense	$	8,467,278	$	3,567,987	$	3,341,965

As of December 31, 2017, the Company had $4.9 million of unrecognized compensation cost related to stock options, which will be recognized over the remaining weighted-average vesting period of approximately 2.1 years. As of December 31, 2017, the Company had $10.6 million of unrecognized stock-based compensation expense related to RSAs, which will be recognized over the remaining weighted-average vesting period of approximately 2.1 years.

Stock Option Plans

2012 Omnibus Incentive Plan

On December 16, 2016, the Company’s stockholders approved the Amended and Restated 2012 Omnibus Incentive Plan (the “2012 Plan”), providing for the issuance of up to 10.5 million shares of the Company’s common stock, including approximately 2.1 million shares previously approved by the Company’s stockholders under the Company’s Amended and Restated 2006 Stock Incentive Plan (the “2006 Stock Plan”), less one share of common stock for every one share of common stock that was subject to an option or other award granted after December 31, 2011 under the 2006 Stock Plan, plus an additional number of shares of common stock equal to the number of shares previously granted under the 2006 Stock Plan that either terminate, expire, or are forfeited after December 31, 2011. As of December 31, 2017, there were approximately 1.7 million shares of common stock available for grant. A summary of stock option activity under the 2012 Plan during the year ended December 31, 2017 is as follows:



Options	Number of Stock Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at December 31, 2016	2,822,855		$	2.42
Granted	1,227,851		4.74
Exercised	(100,015	)	2.10
Forfeited or expired	(225,799	)	4.37
Outstanding at December 31, 2017	3,724,892		$	3.07	7.8	$	1,582,812
Exercisable at December 31, 2017	2,384,981		$	2.48	7.1	$	1,385,939

The total intrinsic values of options under the 2012 Plan exercised during the years ended December 31, 2017, 2016 and 2015 were $0.2 million, $3.2 million and $0.1 million, respectively. The Company recorded stock-based compensation expense under the 2012 Plan related to options of $2.5 million, $1.4 million and $1.5 million for the years ended December 31, 2017, 2016 and 2015, respectively.

The weighted-average grant-date fair value of stock options granted to employees in the years ended December 31, 2017, 2016 and 2015 was $4.74, $3.35 and $1.79 per share, respectively. The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions for the years ended December 31, 2017, 2016 and 2015:



	For the Years Ended December 31,
	2017		2016		2015
Risk-free interest rate	1.90	%	1.39	%	1.37	%
Expected term (in years)	6.0		6.0		5.9
Expected dividend yield	—		—		—
Expected volatility	83	%	84	%	87	%

Restricted Stock Awards

The Company granted 1,873,294 RSAs under the 2012 Plan during the year ended December 31, 2017. Shares are forfeited if not vested within three years from the date of grant, and vest in three equal annual increments. The Company recorded stock-based compensation expense related to RSAs under the 2012 Plan of $3.9 million, $2.1 million and $1.5 million for the years ended December 31, 2017, 2016 and 2015, respectively. A summary of RSA activity under the 2012 Plan during the year ended December 31, 2017 is as follows:



RSA's	Number of RSAs		Weighted-Average Stock Price
Outstanding at December 31, 2016	1,794,115		$	2.46
Granted	1,873,294		4.34
Exercised	(1,100,401	)	2.47
Forfeited or expired	(274,700	)	4.27
Outstanding and unvested at December 31, 2017	2,292,308		$	3.77

2006 Stock Incentive Plan

On June 27, 2007, the Company’s stockholders approved the 2006 Stock Plan, providing for the issuance of up to 3,700,000 shares of common stock plus an additional number of shares of common stock equal to the number of shares previously granted under the 1998 Stock Option Plan that either terminate, expire, or lapse after the date of the Board of Directors’ approval of the 2006 Stock Plan. All options granted and outstanding have been fully expensed prior to 2016.

A summary of stock option activity under the 2006 Stock Plan during the year ended December 31, 2017 is as follows:



Options	Number of Stock Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at December 31, 2016	3,041,686		$	2.62
Granted	—		—
Exercised	(1,664,177	)	1.31
Forfeited or expired	(183,428	)	4.94
Outstanding at December 31, 2017	1,194,081		$	4.08	3.8	$	3,768
Exercisable at December 31, 2017	1,149,902		$	4.09	3.9	$	3,768

The total intrinsic values of options under the 2006 Plan exercised during the years ended December 31, 2017, 2016 and 2015 were $6.3 million, $15.3 million and $0.1 million, respectively.

Amended and Restated 2016 Inducement Omnibus Incentive Plan

On October 3, 2016, in connection with the closing of the Skout Acquisition, the Company’s Board of Directors adopted the 2016 Inducement Omnibus Incentive Plan in accordance with NASDAQ Listing Rule 5635(c)(4). At the closing of the Skout Acquisition, the Company granted stock options to purchase an aggregate of up to 355,000 shares of its common stock to 25 former Skout employees as an inducement material to becoming non-executive employees of the Company. On February 27, 2017, the Company amended and restated the 2016 Inducement Omnibus Incentive Plan (as so amended and restated, the “2016 Stock Plan”) authorized an additional 2,000,000 shares of common stock under the 2016 Stock Plan. At the closing of the if(we) Acquisition, the Company granted options to purchase an aggregate of up to 75,000 shares of its common stock and restricted stock awards representing an aggregate of 717,500 shares of common stock to 83 former if(we) employees as an inducement material to becoming non-executive employees of the Company. At the closing of the Lovoo Acquisition, the Company granted restricted stock awards representing an aggregate of 531,500 shares of common stock to 96 former Lovoo employees as an inducement material to becoming non-executive employees of the Company.

Options under the 2016 Stock Plan

The Company recorded stock-based compensation expense related to options under the 2016 Stock Plan of approximately $0.8 million and $0.1 million for the year ended December 31, 2017 and 2016, respectively. A summary of stock option activity under the 2016 Stock Plan during the year ended December 31, 2017 is as follows:



Options	Number of Stock Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at December 31, 2016	310,000		$	6.02
Granted	575,000		4.95
Exercised	—		—
Forfeited or expired	(150,832	)	6.03
Outstanding at December 31, 2017	734,168		$	5.18	9.1	$	—
Exercisable at December 31, 2017	80,834		$	6.04	8.8	$	—

The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions for the year ended December 31, 2017:



	Year Ended December 31,
	2017		2016
Risk-free interest rate	1.89	%	1.21	%
Expected term (in years)	6.0		6.0
Expected dividend yield	—		—
Expected volatility	84	%	85	%

Restricted Stock Awards under the 2016 Stock Plan

The Company granted 1,539,250 RSAs under the 2016 Stock Plan during the year ended December 31, 2017. Shares are forfeited if not vested within three years from the date of grant, and vest in three equal annual increments. The Company recorded stock-based compensation expense related to RSAs of approximately $1.1 million for the year ended December 31, 2017. A summary of RSA activity under the 2016 Stock Plan during the year ended December 31, 2017 is as follows:



RSAs	Number of RSAs		Weighted-Average Stock Price
Outstanding at December 31, 2016	—		$	—
Granted	1,539,250		4.80
Vested	—		—
Forfeited or expired	(297,000	)	5.55
Outstanding and unvested at December 31, 2017	1,242,250		$	4.62

Non-Plan Options

The Board of Directors has approved, and our stockholders have ratified, the issuance of stock options outside of our stock incentive plans. A summary of Non-Plan option activity during the year ended December 31, 2017 is as follows:



Options	Number of Stock Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at December 31, 2016	316,456		$	1.34
Granted	—		—
Exercised	(316,456	)	1.34
Forfeited or expired	—		—
Outstanding at December 31, 2017	—		$	—	—	$	—

The total intrinsic values of options exercised during the years ended December 31, 2017 and 2016 were $1.0 million and $0.4 million. There were no options exercised in 2015.