Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

v3.23.2
STOCK-BASED COMPENSATION
 6 Months Ended
Jun. 30, 2023
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, 2023:
Awards Reserved for Issuance Awards Exercised Awards Outstanding Awards Available for Grant
2016 Equity Incentive Plan 497,776  —  248,888  248,888 
2018 Equity Incentive Plan 17,364,171  4,022,133  6,754,353  6,587,685 
2019 Equity Incentive Plan 24,062,129  34,884  14,027,519  9,999,726 
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, 2023 June 30, 2022
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 — $ 89  400,000 $ 1,352 
Stock Grants:
Employees (Common Stock) —  —  1,200,000 170 
Directors (Common Stock) — —  259,796 29 
Non–Employee Consultants (Common Stock) 79,997,091 1,553  725,000 129 
Total Stock–Based Compensation Expense $ 1,642  $ 1,680 
(in thousands, except for shares / options)
  For the Six Months Ended
  June 30, 2023 June 30, 2022
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 — $ 187  400,000 $ 3,174 
Stock Grants:
Employees (Common Stock) —  —  2,100,000 352 
Directors (Common Stock) — —  943,128 213 
Non–Employee Consultants (Common Stock) 96,178,321 1,910  725,000 129 
Total Stock–Based Compensation Expense $ 2,097  $ 3,868 
Stock Options
The following table summarizes the Company’s stock option activity and related information for the six months ended June 30, 2023:
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, 2023 52,821,099 $ 0.23 
Forfeited (31,695,340) $ 0.23 
Options Outstanding as of June 30, 2023 21,125,759 $ 0.23  7.1 years $ — 
Options Exercisable as of June 30, 2023 15,931,299 $ 0.28   7.5 years $ — 

As of June 30, 2023, total unrecognized stock-based compensation was $0.21 million. Such costs are expected to be recognized over a weighted-average period of approximately 1.01 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.