Stock-Based Compensation

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Options

The Company recognized $0.3 million and $0.6 million of compensation expense related to stock options during the three months ended March 31, 2019 and 2018, respectively.

On May 25, 2016, the Board of Directors approved the Company’s 2016 Equity Incentive Plan (the “2016 Plan”). On May 21, 2018, the Board of Directors adopted, and the Company’s stockholders subsequently approved, an amendment and restatement of the 2016 Plan to increase the number of shares of Common Stock available for grant under such plan by adding 2,000,000 shares of Common Stock. The 2016 Plan, as amended, provides for the issuance of awards of up to 4,000,000 shares of the Company’s common stock, plus any shares of common stock that are represented by awards granted under our Director Plan and 2009 Plan that are forfeited, expire or are canceled without delivery of shares of common stock or which result in the forfeiture of shares of common stock back to the Company on or after May 25, 2016, up to 2,500,000 shares. Generally, shares of common stock reserved for awards under the 2016 Plan that lapse or are canceled, will be added back to the share reserve available for future awards. However, shares of common stock tendered in payment for an award or shares of common stock withheld for taxes will not be available again for grant. The 2016 Plan provides that no participant may receive awards for more than 1,000,000 shares of common stock in any fiscal year. As the 2016 Plan supersedes both the Director Plan and the 2009 Plan, any available shares from both are now incorporated into the 2016 Plan. As of March 31, 2019, there were 100,773 RSUs outstanding, 131,496 shares of common stock outstanding and options to purchase 3,164,345 shares of common stock outstanding under the 2016 Plan. As of December 31, 2018, there were 161,214 RSUs outstanding, 74,667 shares of common stock outstanding and options to purchase 1,394,285 shares of common stock outstanding under the 2016 Plan. As of March 31, 2019 and December 31, 2018, there were a total of 1,363,758 shares of common stock and 3,113,374 shares of common stock available under the 2016 Plan, respectively.

As of March 31, 2019 and December 31, 2018, there were options to purchase 6,105,619 and 4,352,391 shares of common stock outstanding, respectively, collectively in the Director Plan, 2009 Plan, and the 2016 Plan.

In the interest of maintaining consistency with the Company's 2016 Equity Incentive Plan, on March 13, 2017, the Company entered into (i) an amendment to the option agreements governing each option grant currently outstanding under the Company's 2009 Equity Incentive Plan, and (ii) an amendment to the RSU, agreements governing each RSU grant currently outstanding under the 2009 Plan. The amendments provide for the automatic vesting upon a change of control of the Company of each option grant and RSU grant, as applicable, outstanding under the 2009 Plan. The amendments had a de minimis value to the holders as of March 31, 2019, and therefore no additional stock compensation expense was recognized related to the amendments.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing formula that uses assumptions noted in the following table. Expected volatilities and risk-free interest rates are based upon the expected life of the grant.


	Three Months Ended March 31,
Assumptions	2019		2018
Expected dividends	—		—
Risk-free rate	2.47	%	2.32	%
Expected volatility	57.8%-60.2%		60.5%-60.9%
Expected term (in years)	3.2-3.3 years		3.2 - 3.3 years

Expected volatility was calculated using the historical volatility of the Company's stock over the expected life of the options. The expected life of the options was estimated based on the Company's historical data. The risk free interest rate is based on U.S. Treasury yields for securities with terms approximating the terms of the grants. Forfeitures are recognized in the period they occur. The assumptions used in the Black-Scholes options valuation model are highly subjective, and can materially affect the resulting valuation.

A summary of option activity under the 1999 Director Stock Option Plan, 2009 Equity Incentive Plan, and the 2016 Equity Incentive Plan as of March 31, 2019 and changes during the period are presented below:


	Number of Options	Weighted Average Exercise Price
Outstanding as of January 1, 2019	4,352,391	$	4.61
Issued	1,866,855	1.60
Exercised	—	—
Forfeited	(113,627)	4.84
Expired	—	—
Outstanding as of March 31, 2019	6,105,619	$	3.68

Exercisable as of March 31, 2019	3,601,093	$	4.65

The following tables summarize information regarding options outstanding and exercisable at March 31, 2019:

Outstanding:


Range of Exercise Prices	Stock Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
$0.79 - $1.50	1,652,250	$	1.08	3.47
$1.51 - $5.50	2,642,313	2.17		9.22
$5.51 - $10.67	1,811,056	8.25		6.73
Total	6,105,619	$	3.68	6.93

Exercisable:


Range of Exercise Prices	Stock Options Exercisable	Weighted Average Exercise Price
$0.79 - $1.50	1,510,000	$	1.06
$1.51 - $5.50	452,961	3.17
$5.51 - $10.67	1,638,132	8.36
Total	3,601,093	$	4.65

As of March 31, 2019, the intrinsic value of the options outstanding was $0.2 million and the intrinsic value of the options exercisable was $0.2 million. As of March 31, 2019, there was $2.1 million of total unrecognized compensation expense related to non-vested share-based compensation arrangements granted under the Plan. The costs will be recognized through March 2022.

Restricted Stock and RSUs

The Company periodically grants restricted stock and RSU awards to certain officers and other employees that typically vest one to three years from their grant date. The Company recognized $0.1 million and $0.2 million of compensation expense during the three months ended March 31, 2019 and 2018, respectively. Stock compensation expense is recognized over the vesting period of the restricted stock and RSUs. At March 31, 2019, the Company had approximately $0.4 million of total unrecognized compensation cost related to RSUs, all of which will be recognized through March 2022. The following table summarizes the number of unvested RSUs and their weighted average exercise price for the three months ended March 31, 2019.


	Number of RSUs	Weighted Average Grant Date Fair Value
Non-vested balance at January 1, 2019	175,591	$	4.78
Changes during the period:
Shares granted	—	—
Shares vested	(71,206)	5.20
Shares forfeited	(3,612)	3.53
Non-vested balance at March 31, 2019	100,773	$	4.53