Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.7.0.1
Stockholders' Equity
6 Months Ended
Jun. 30, 2017
Equity [Abstract]  
Stockholders' Equity

7. Stockholders’ equity

 

The Company has a 2012 Equity Incentive Plan (2012 Plan) under which the Company granted options to purchase shares of its common stock. As of June 30, 2017, options to purchase 352,744 shares of common stock remained outstanding under the 2012 Plan. The 2012 Plan was terminated in connection with the Company’s initial public offering in February 2014, and accordingly, no new options are available for issuance under this plan. The 2012 Plan continues to govern outstanding awards granted thereunder.

The Company has a 2002 Stock Incentive Plan (2002 Plan) as amended, under which the Company granted options to purchase shares of its common stock. As of June 30, 2017, options to purchase 96,472 shares of common stock remained outstanding under the 2002 Plan. The 2002 Plan was terminated in March 2012 in connection with the adoption of the 2012 Plan, and, accordingly, no new options are available for issuance under this plan. The 2002 Plan continues to govern outstanding awards granted thereunder.

The Company’s board of directors adopted and its stockholders approved a 2014 Equity Incentive Plan (2014 Plan) effective immediately prior to the effectiveness of its initial public offering. The 2014 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to the Company’s employees and any parent and subsidiary corporation’s employees, and for the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to its employees, directors and consultants and its parent and subsidiary corporations’ employees and consultants.

As of June 30, 2017, awards to purchase 1,605,920 shares of the Company’s common stock were outstanding, and 1,242,013 shares of common stock remained available for issuance under the 2014 Plan. The shares available for issuance under the 2014 Plan will be increased by any shares returned to the 2002 Plan, 2012 Plan and the 2014 Plan as a result of expiration or termination of awards (provided that the maximum number of shares that may be added to the 2014 Plan pursuant to such previously granted awards under the 2002 Plan and 2012 Plan is 2,328,569 shares). The number of shares available for issuance under the 2014 Plan also is increased annually on the first day of each fiscal year by an amount equal to the least of:

895,346 shares;

4% of the outstanding shares of common stock as of the last day of the Company’s immediately preceding fiscal year; or

such other amount as the Company’s board of directors may determine.

For 2017, an additional 815,594 shares were added to the 2014 Plan share reserve pursuant to the provision described above.

Stock options

Options typically expire between seven and ten years from the date of grant and vest over one to four-year terms. Options have been granted to employees, directors and consultants of the Company, as determined by the board of directors, at the deemed fair market value of the shares underlying the options at the date of grant.

The activity for stock options under the Company’s stock plans is as follows:  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

weighted-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-

 

 

average

 

 

Per share

 

 

 

 

 

 

 

 

 

 

 

average

 

 

contractual

 

 

average

 

 

 

 

 

 

 

Price per

 

 

exercise

 

 

terms

 

 

intrinsic

 

 

 

Options

 

 

share

 

 

price

 

 

(in years)

 

 

value

 

Outstanding as of December 31, 2016

 

 

2,355,527

 

 

$0.60-$58.95

 

 

$

28.22

 

 

 

5.42

 

 

$

38.95

 

Granted

 

 

64,498

 

 

 

83.30

 

 

 

83.30

 

 

 

 

 

 

 

 

 

Exercised

 

 

(308,132

)

 

0.60-56.72

 

 

 

21.68

 

 

 

 

 

 

 

 

 

Forfeited

 

 

(62,424

)

 

24.52-58.95

 

 

 

43.75

 

 

 

 

 

 

 

 

 

Expired

 

 

(33

)

 

 

8.70

 

 

 

8.70

 

 

 

 

 

 

 

 

 

Outstanding as of June 30, 2017

 

 

2,049,436

 

 

0.60-83.30

 

 

 

30.47

 

 

 

5.07

 

 

 

64.95

 

Vested and exercisable as of June 30, 2017

 

 

1,106,535

 

 

0.60-83.30

 

 

 

21.62

 

 

 

4.83

 

 

 

73.80

 

Vested and expected to vest as of June 30, 2017

 

 

1,984,249

 

 

$0.60-$83.30

 

 

$

30.18

 

 

 

5.06

 

 

$

65.24

 

 

The unrecognized compensation expense related to non-vested stock-based compensation granted under the Plans as of June 30, 2017 and June 30, 2016 was $13,285 and $19,067, respectively.

Restricted stock units

 

The Company granted time-based awards of restricted stock units (RSU) at a weighted-average grant date fair value of $73.26.

RSU activity for the six months ended June 30, 2017, is summarized below:

 

 

 

 

 

 

 

Weighted-

 

 

 

 

 

 

 

average grant

 

 

 

 

 

 

 

date fair value

 

 

 

Units

 

 

per share

 

Unvested as of December 31, 2016

 

 

 

 

$

 

Granted

 

 

5,700

 

 

 

73.26

 

Vested

 

 

 

 

 

 

Forfeited/canceled

 

 

 

 

 

 

Unvested as of June 30, 2017

 

 

5,700

 

 

$

73.26

 

 

As of June 30, 2017, the unrecognized compensation cost related to unvested employee RSUs was $345, excluding estimated forfeitures.  This amount is expected to be recognized over a weighted-average period of 3.5 years.

Employee stock purchase plan

 

The Company’s board of directors adopted and its stockholders approved a 2014 Employee Stock Purchase Plan (ESPP) effective immediately prior to the effectiveness of its initial public offering. The ESPP provides for the grant to all eligible employees an option to purchase stock under the ESPP, within the meaning Section 423 of the Internal Revenue Code. The ESPP permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation, which includes a participant’s base straight time gross earnings, incentive compensation, bonuses, overtime and shift premium, but exclusive of payments for equity compensation and other similar compensation. A participant may purchase a maximum of 1,500 shares during a purchase period. Amounts deducted and accumulated by the participant are used to purchase shares of the Company’s common stock at the end of each six-month period. The purchase price of the shares will be 85% of the lower of the fair market value of the Company’s common stock on the first trading day of each offering period or on the exercise date. The offering periods are currently approximately six months in length beginning on the first business day on or after March 1 and September 1 of each year and ending on the first business day on or after September 1 and March 1 approximately six months later.

As of June 30, 2017, a total of 605,629 shares of common stock were available for sale pursuant to the ESPP. The number of shares available for sale under the ESPP is increased annually on the first day of each fiscal year by an amount equal to the least of:

179,069 shares;

1.5% of the outstanding shares of the Company’s common stock on the last day of the Company’s immediately preceding fiscal year; or

such other amount as may be determined by the administrator.

For 2017, an additional 179,069 shares were added to the ESPP share reserve pursuant to the provision described above.

Stock-based compensation

Stock-based compensation expense recognized for the three months and six months ended June 30, 2017 and June 30, 2016 was as follows:

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Stock-based compensation expense by type of award:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock option plan awards

 

$

2,055

 

 

$

2,001

 

 

$

3,799

 

 

$

3,205

 

Restricted stock units

 

 

24

 

 

 

 

 

 

48

 

 

 

 

Employee stock purchase plan

 

 

137

 

 

 

155

 

 

 

260

 

 

 

246

 

Total stock-based compensation expense

 

$

2,216

 

 

$

2,156

 

 

$

4,107

 

 

$

3,451

 

Employee stock-based compensation expense was calculated based on stock option plan awards and restricted stock units ultimately expected to vest based on the Company’s historical option cancellations. The employee stock-based compensation expense recognized for the six months ended June 30, 2017 and June 30, 2016 has been reduced for estimated forfeitures of stock option plan awards at a rate of 7.3% and 7.3%, respectively. The employee stock-based compensation expense recognized for the six months ended June 30, 2017 has been reduced for estimated forfeitures of restricted stock units at a rate of 5.7%. There were no grants of restricted stock units for the six months ended June 30, 2016. ASC 718 – Compensation-Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

For the three months and six months ended June 30, 2017 and June 30, 2016, stock-based compensation expense recognized under ASC 718, included in cost of revenues, sales and marketing expense, general and administrative expense, and research and development expense was as follows:

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Cost of revenue

 

$

212

 

 

$

160

 

 

$

403

 

 

$

279

 

Research and development

 

 

250

 

 

 

207

 

 

 

473

 

 

 

338

 

Sales and marketing

 

 

347

 

 

 

314

 

 

 

662

 

 

 

541

 

General and administrative

 

 

1,407

 

 

 

1,475

 

 

 

2,569

 

 

 

2,293

 

Total stock-based compensation expense

 

$

2,216

 

 

$

2,156

 

 

$

4,107

 

 

$

3,451

 

 

401(k) retirement savings plan

The Company maintains a 401(k) retirement savings plan for the benefit of eligible employees.  Under the terms of this plan, eligible employees are able to make contributions to the plan on a tax-deferred basis.  The Company began matching employees’ contributions, effective January 1, 2017.  The Company made $293 in contributions to the 401(k) plan for the six months ended June 30, 2017.  The Company made no contributions to the 401(k) plan for the six months ended June 30, 2016.