Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

v3.22.2.2
STOCK-BASED COMPENSATION
 6 Months Ended
Jun. 30, 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 June 30, 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 30,988,982  4,022,133  14,009,842  12,957,007 
2019 Equity Incentive Plan 109,990,468  34,884  73,014,714  36,940,870 
Stock Options
The following table summarizes the Company’s stock option activity and related information for the six months ended June 30, 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 
Granted 400,000  — 
Exercised (146,212) $ 0.08 
Forfeited (223,791) $ 0.15 
Expired (154,762) $ 0.34 
Options outstanding as of June 30, 2022
 88,126,615 $ 0.20  8.3 years $ 33 
Options exercisable as of June 30, 2022
 50,718,424 $ 0.24   7.4 years $ 50 
As of June 30, 2022, there was $5.44 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
  June 30, 2022 June 30, 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 400,000 $ 1,352  5,409,716 $ 641 
Stock grants:
Employees (common stock) 1,200,000  $ 170  250,000 68 
Directors (common stock) 259,796 $ 29  343,493 94 
Non–employee consultants (common stock) 725,000 $ 129  — — 
Total stock–based compensation expense $ 1,680  $ 803 
  (in thousands except for shares / options)
  For the Six Months Ended
  June 30, 2022 June 30, 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 400,000 $ 3,174  5,909,716 $ 885 
Stock grants:
Employees (common stock) 2,100,000  $ 352  250,000 67 
Directors (common stock) 943,128 $ 213  885,159 214 
Non–employee consultants (common stock) 725,000 $ 129  332,947 32 
Total stock–based compensation expense $ 3,868  $ 1,198 
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.
On April 12, 2022, the Company and Francis Knuettel, formerly the Company's Chief Executive Officer, agreed to terms on a separation agreement. The Company agreed to pay Mr. Knuettel 50% of his annual base salary and continue his medical benefits for a period of six months. Mr. Knuettel's unvested shares and options vested immediately. As part of this separation agreement Mr. Knuettel resigned as a director of the Company.
On April 14, 2022, the Company and Dallas Imbimbo, an advisor to the Company and a director of the Company, agreed to terms on a separation agreement. The Company agreed to vest 100% of Mr. Imbimbo's restricted common stock granted pursuant to the advisor agreement with Mr. Imbimbo. The Company agreed to vest 100% of the options to purchase shares of the Company's common stock granted as part Mr. Imbimbo's Independent Director Agreement. The Company will pay Mr. Imbimbo $0.08 million in cash compensation. As part of this separation agreement, Mr. Imbimbo resigned as a director of the Company and as an Advisor to the Company.