Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

v3.22.1
STOCK-BASED COMPENSATION
 3 Months Ended
Mar. 31, 2022
Share-based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
Equity Incentive Plans
In the first quarter of 2016, the Company adopted the 2016 Equity Incentive Plan. In the fourth quarter of 2018, the Company adopted the 2018 Equity Incentive Plan. In July 2021, the Company assumed the 2019 Equity Incentive Plan as part of the acquisition of UMBRLA. The following table contains information about the Company's equity incentive plans as of March 31, 2022:
Awards Reserved for Issuance Awards Exercised Awards Outstanding Awards Available for Grant
2016 Equity Incentive Plan 999,906  —  499,953  499,953 
2018 Equity Incentive Plan 30,159,437  4,080,088  14,009,842  12,069,507 
2019 Equity Incentive Plan 101,475,719  54,383  73,014,714  28,406,622 
Stock Options
The following table summarizes the Company’s stock option activity and related information for the three months ended March 31, 2022:
Number of
Shares
Weighted-
Average Exercise
Price Per Share 		Weighted-
Average
Remaining
Contractual
Life 		Aggregate
Intrinsic
Value of
In-the-Money
Options
 
Options outstanding as of January 1, 2022 88,251,380 $ 0.20 
Exercised (146,212) $ 0.08 
Forfeited (223,788) $ 0.15 
Expired (29,762) $ 0.34 
Options outstanding as of March 31, 2022
 87,851,618 $ 0.20  8.5 years $ 526 
Options exercisable as of March 31, 2022
 41,296,676 $ 0.26   7.4 years $ 1,338 
As of March 31, 2022, there was $6.37 million total unrecognized stock-based compensation. Such costs are expected to be recognized over a weighted-average period of approximately 1.6 years.
The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period.
The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Hence, the Company uses the “simplified method” described in Staff Accounting Bulletin 107 to estimate the expected term of share option grants.
The expected stock price volatility assumption was determined by examining the historical volatilities for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumptions as more historical data for the Company’s common stock becomes available.
The risk-free interest rate assumption is based on the U.S. treasury instruments whose term was consistent with the expected term of the Company’s stock options.
The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. Accordingly, the Company has assumed no dividend yield for purposes of estimating the fair value of the Company stock-based compensation.
Stock-Based Compensation Expense
The following table sets forth the total stock-based compensation expense resulting from stock options and restricted grants of common stock to employees, directors and non-employee consultants in the consolidated statement of operations which are included in selling, general and administrative expenses:
  (in thousands except for shares / options)
  For the Three Months Ended
  March 31, 2022 March 31, 2021
Type of Award Number of
Shares or
Options
Granted		 Stock-Based
Compensation
Expense 		Number of
Shares or
Options
Granted		 Stock-Based
Compensation
Expense
 
Stock options 114,006,195 $ 1,821  500,000 $ 244 
Stock grants:
Employees (common stock) 900,000  $ 182  — — 
Directors (common stock) 683,332 $ 184  541,666 121 
Non–employee consultants (common stock) — $ —  332,947 33 
Total stock–based compensation expense $ 2,187  $ 398 
On March 10, 2022, the Company terminated the employment of Oren Schauble, the Company’s President. On March 13, 2022, the Company terminated the employment of Francis Knuettel II, the Company’s Chief Executive Officer. The Company entered into separation agreements with each of Mr. Knuettel and Mr. Schauble regarding the compensation to be granted to each of them regarding their separation from the Company. In addition, on March 17, 2022 the Company entered into a consulting agreement with Mr. Schauble pursuant to which he will continue to provide certain services to the Company through a future agreed upon date. The Company granted Mr. Schauble 910,623 restricted shares of the Company's Common Stock in four monthly installments.