Stock-based Compensation
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock-based Compensation STOCK-BASED COMPENSATION
The Company has stock-based employee compensation plans for which compensation cost is recognized in its financial statements. The Company is authorized to grant key employees and members of our board of directors stock-based incentive awards, including options to purchase common stock, stock appreciation rights, RSUs, PSUs or other stock units. The cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity award). The Company utilizes the Black-Scholes option-pricing model to value stock option awards. The Company measures RSUs and PSUs using the fair market value of the restricted shares of common stock on the day the award is granted. Stock-based awards granted to employees and members of our board of directors include stock options and restricted stock units.
The following table presents the weighted-average assumptions used to estimate the fair value of options granted (excluding replacement options in conjunction with modifications described below) during the periods presented:
Years Ended December 31,
20202019
Expected dividend yield— %— %
Expected stock price volatility63.8 %66.7 %
Risk-free interest rate1.8 %2.0 %
Expected life of options (in years)5.705.27
The Company determines expected volatility using historical volatility based on daily closing prices of the Company's common stock over periods that correlate with the expected terms of the awards. The risk-free rate is based on the United States Treasury yield curve at the time of grant for the appropriate expected term of the awards granted. Expected dividends are based on our history and expectation of dividend payouts. The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. The expected life assumption represents the weighted-average period awards are expected to remain outstanding. The expected life assumptions are established through a review of historical exercise behavior of stock-based award grants with similar vesting periods.
The Company recorded $1.5 million and $1.6 million of stock-based compensation expense for the years ended December 31, 2020, and 2019, respectively. Expense related to stock option grants of non-qualified stock options (“NSOs”) results in a temporary tax difference, which gives rise to a deferred income tax asset.
Total stock-based compensation expense included in the accompanying consolidated statements of operations for the years ended December 31, 2020 and 2019, is as follows (in thousands):
Years Ended December 31,
20202019
Technology and development$218 $338 
Sales and marketing407 513 
General and administrative831 765 
Total stock-based compensation expense$1,456 $1,616 
Equity Incentive Plans —The Company has two stock option plans (the 2006 Stock Plan and the Amended and Restated 2012 Equity Incentive Plan), which, as of December 31, 2020, authorize the Company to grant up to 17.1 million stock options (ISOs and NSOs), stock appreciation rights, restricted stock, RSUs and PSUs. The ISOs and NSOs will be granted at a price per share not less than the fair value of the Company’s common stock at the date of grant. Options granted to date generally vest over a four-year period with 25% vesting at the end of one year and the remaining 75% vesting monthly thereafter. Options granted generally are exercisable up to 10 years. RSUs generally vest over a 3 year period with one-sixth vesting at the end of each six-month period. PSUs vest annually over a 4 year period with the number of shares earned dependent upon the Company's achievement of certain financial performance targets.
Special Purpose Recruitment Plan —During 2013, our shareholders approved the Special Purpose Recruitment Plan from which equity compensation awards are granted to newly-hired employees. One million shares of common stock were reserved for issuance and have all been granted under this plan.
Stock Option Activity —A summary of stock option activity for the year ended December 31, 2020 is as follows:
Number of
Shares		Weighted
Average
Exercise
Price		Aggregate
Intrinsic
Value (in
thousands)		Weighted
Average
Remaining
Contractual
Term (years)
Outstanding at January 1, 20207,296,746 $2.48 
Granted89,100 1.49 
Exercised— — 
Forfeited(161,651)2.28 
Expired(1,261,889)2.73 
Outstanding—December 31, 20205,962,306 $2.42 $8 4.72
Expected to vest—December 31, 20205,954,759 $2.42 $7 4.71
Vested and exercisable—December 31, 20205,396,910 $2.47 $— 4.39
Aggregate intrinsic value represents the difference between the closing stock price of the Company’s common stock and the exercise price of outstanding, in-the-money options. The Company’s closing stock price as reported on the Nasdaq as of December 31, 2020 was $1.36. There were no options exercised for the year ended December 31, 2020. The total intrinsic value of options exercised was $10 thousand for the year ended December 31, 2019. The weighted-average grant date fair value of options granted was $0.86 per share and $0.97 per share for the years ended December 31, 2020 and 2019, respectively.
As of December 31, 2020, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was $0.6 million, which is expected to be recognized over a weighted-average period of 1.68 years.
RSU Activity —A summary of RSU activity for the year ended December 31, 2020 is as follows:
Number of SharesWeighted Average
Fair Value
Unvested—January 1, 2020
677,354 $1.54 
Granted1,250,595 1.18 
Vested(503,048)1.38 
Forfeited(38,168)1.53 
Unvested—December 31, 2020
1,386,733 $1.27 
As of December 31, 2020, total unrecognized compensation cost, adjusted for estimated forfeitures, related to RSUs was $1.3 million. This cost is expected to be recognized over a weighted-average remaining period of 2.21 years.
PSU Activity  — A summary of PSU activity for the year ended December 31, 2020 is as follows:
Number of SharesWeighted Average
Fair Value
Unvested—January 1, 2020297,789 $1.36 
Granted336,100 1.21 
Vested— — 
Forfeited(74,442)1.36 
Unvested—December 31, 2020559,447 $1.27 
During the year ended December 31, 2020, certain employees were granted PSUs. The PSUs vest annually over three years from the grant date based on continuous service, with the number of shares earned dependent upon the Company's achievement of certain financial performance targets measured over the period from January 1, 2020 through December 31, 2023. The number of shares earned can range from 0% to 150% of the target award.
As of December 31, 2020, total unrecognized compensation cost, adjusted for estimated forfeitures, related to PSUs was $0.4 million. This cost is expected to be recognized over a weighted-average remaining period of 3.58 years.