Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.20.2
Stock-Based Compensation
6 Months Ended
Jun. 30, 2020
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
The Company has two equity incentive plans: the 2008 Stock Option Plan (the “2008 Plan”) and the 2011 Equity Incentive Plan (the “2011 Plan”, and together with the 2008 Plan, the “Stock Option Plans”). The Stock Option Plans are meant to provide additional incentive to officers, employees and consultants to remain in the Company's employment. Options granted are generally exercisable for up to 10 years. Effective April 9, 2018, the Company cannot issue additional options from the 2008 Plan.

At June 30, 2020, 25 thousand shares remain available for future awards under the 2011 Plan. On January 2, 2020, the Company granted 20 thousand options to key employees. The options will vest in equal monthly installments over the next twelve months and have an exercise price of $5.53 per share.

A summary of employee and non-employee stock option activity for the six months ended June 30, 2020 for both continuing and discontinuing employees is as follows:
  Options Outstanding Weighted-
Average
Remaining
Contractual
Term (in years)
Aggregate
Intrinsic
Value
(in thousands)
  Number of
Shares
(in thousands)
Weighted-
Average
Exercise
Price
Outstanding January 1, 2020 64    $ 113.63    7.48 $ 24   
Granted 20    5.53   
Cancelled or expired (12)   90.93   
Outstanding June 30, 2020 72    $ 87.50    7.71 $ —   
Exercisable June 30, 2020 53    $ 115.12    7.24 $ —   

Aggregate intrinsic value represents the difference between the fair value of the Company's common stock and the exercise price of outstanding, in-the-money options.

As of June 30, 2020, total unrecognized compensation cost related to non-vested stock options granted to employees was approximately $148 thousand for continuing operations, which the Company expect to recognize over the next 1.79 years.
The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term (the period of time that the options granted are expected to be outstanding), the volatility of the Company's common stock, a risk-free interest rate, and expected dividends. Forfeitures will be recorded when they occur. No compensation cost is recorded for options that do not vest. Due to significant changes in the Company's business, the Company used the simplified calculation of expected life described in the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, and volatility is based on the historical volatility of the Company's common stock. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The Company use an expected dividend yield of zero, as it does not anticipate paying any dividends in the foreseeable future.

The following table presents the weighted-average assumptions used to estimate the fair value of options granted to continuing and discontinuing employees during the periods presented:
  Six Months Ended June 30,
  2020 2019
Volatility 110.43  % 90.15  %
Risk free interest rate 1.68  % 2.54  %
Dividend yield 0.00  % 0.00  %
Term (years) 5.27 6.32
Weighted-average fair value of options granted during the period $ 4.45    $ 10.07   

The Company did not grant stock options during the three months ended June 30, 2020 and 2019.

Restricted stock awards have been granted to employees, directors and consultants as compensation for services. At June 30, 2020, there was no unrecognized compensation cost related to non-vested restricted stock granted to employees and directors.

The TSA with Buyer described in Note 1 requires the Company to continue to employ individuals who will transfer to Buyer no later than six months from the closing of the transaction. Stock-based compensation related to these employees is included in discontinuing operations. The following table presents the effects of stock-based compensation related to stock option and restricted stock awards to employees and non-employees on the Company's continuing operations included in its Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss during the periods presented (in thousands):

  Three Months Ended June 30, Six Months Ended June 30,
  2020 2019 2020 2019
Cost of revenues $   $   $   $  
General and administrative 52    63    106    178   
Total stock-based compensation related to continuing operations $ 55    $ 67    $ 113    $ 186   

During the three and six months ended June 30, 2020, the Company recognized approximately $(8) thousand of stock-based compensation (benefit) related to discontinuing operations. During the three and six months ended June 30, 2019, the Company recognized approximately $35 thousand and $74 thousand, respectively, of stock-based compensation related to discontinuing operations.