Stock-Based Compensation |
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| Stock-Based Compensation | Stock-Based Compensation A summary of our various equity incentive plans is set forth below:
2023 Inducement Plans
During 2023, our board of directors adopted two inducement plans; the Phunware, Inc. 2023B Inducement Plan and the 2023 Inducement Plan (collectively, the "2023 Inducement Plans"). As permitted by Nasdaq Stock Market rules, our stockholders were not required to approve the 2023 Inducement Plans. The plans provide of up to 24,000 shares of our common stock under awards granted to newly hired employees. An "award" is any right to receive common stock of the Company consisting of nonstatutory stock options, stock appreciation rights, restricted stock awards or restricted stock units.
On June 30, 2023, we made an inducement grant to a newly hired officer of the Company of 12,000 restricted stock units under the 2023 Inducement Plan with a grant date fair value of $27.00 per share. One-third of the restricted stock units will vest on June 3, 2024 and the remainder will vest in equal installments over annual periods beginning on June 2, 2025 and concluding on June 1, 2026, subject to the employee's continued service on such vesting date. Shares will be delivered electronically to the holder shortly after each vesting date.
On November 10, 2023, we made an inducement grant to a newly hired officer of the Company of 12,000 restricted stock units under the 2023B Inducement Plan with a grant date fair value of $7.30 per share. The restricted stock units vested on February 23, 2024 and were delivered electronically to the holder shortly after the vest date.
2022 Inducement Plan
Our board of directors adopted the Phunware, Inc. 2022 Inducement Plan (the "2022 Inducement Plan") in January 2023. As permitted by Nasdaq Stock Market rules, our stockholders were not required to approve the 2022 Inducement Plan. The plan provides of up to 29,412 shares of our common stock under awards granted to newly hired employees. An "award" is any right to receive common stock of the Company consisting of nonstatutory stock options, stock appreciation rights, restricted stock awards or restricted stock units.
In January 2023, we made an inducement grant to a newly hired officer of the Company of 29,412 restricted stock units under the 2022 Inducement Plan with a grant date fair value of $43.50 per share. One-third, or 9,804, of the restricted stock units was scheduled to vest on December 28, 2023 and the remainder in equal installments over eight quarterly periods beginning on March 31, 2024 with the final vesting date occurring on December 28, 2025. On October 25, 2023, we entered into a separation agreement with the executive, pursuant to which the vesting of this grant was modified such that 10,000 restricted stock units vested on October 25, 2023 and 10,000 restricted stock units will vest on November 30, 2023. The balance, 9,412 unvested restricted stock units, were terminated and returned to the plan to be made available for future grants.
2018 Equity Incentive Plan
In 2018, our board of directors adopted, and our stockholders approved, the 2018 Equity Incentive Plan, as amended (the “2018 Plan”). The purposes of the 2018 Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentives to employees, directors and consultants who perform services for the Company, and to promote the success of our business. These incentives are provided through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares. Shares will be delivered electronically to the holder shortly after exercise or vest date pursuant to an effective registration statement.
The number of shares of common stock available for issuance under the 2018 Plan will also include an annual increase on the first day of each fiscal year, equal to the lesser of 5% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or such other amount as our board of directors may determine.
In addition, the shares of common stock reserved for issuance under the 2018 Plan also will include any shares of common stock subject to stock options, restricted stock units or similar awards granted under the 2009 Equity Incentive Plan (the “2009 Plan”), that, on or after the adoption of the 2018 Plan, expire or otherwise terminate without having been exercised in full and shares of common stock issued pursuant to awards granted under the 2009 Plan that are forfeited to or repurchased by us. As of December 31, 2023, the maximum number of shares of common stock that may be added to the 2018 Plan pursuant to the foregoing is 14,625. Not including the maximum number of shares from the 2009 Plan that may be added to the 2018 Plan, the 2018 Plan had 77,426 and 87,653 shares of common stock reserved for future issuances as of December 31, 2023 and December 31, 2022, respectively.
2018 Employee Stock Purchase Plan
Also, in 2018, our board of directors adopted, and our stockholders approved, the 2018 Employee Stock Purchase Plan (the “2018 ESPP”). The purpose of the 2018 ESPP is to provide eligible employees with an opportunity to purchase shares of our common stock at a discount through accumulated contributions generally in the form of payroll deductions of up to 15% of eligible compensation, subject to caps of $25 in any calendar year and 80 shares on any purchase date. The 2018 ESPP provides for 24-month offering periods, generally beginning in June and December of each year, and each offering period consists of four six-month purchase periods. The first purchase under the 2018 ESPP was in December 2021. Participation ends automatically upon termination of employment with the Company.
On each purchase date, participating employees will purchase shares of our common stock at price per share equal to 85% of the lesser of the fair market value of our common stock on (i) the first trading day of the applicable offering period and (ii) the last trading day of each purchase period in the applicable offering period. If the price per share of our common stock on any purchase date in the offering period is lower than the stock price on the enrollment date of that offering period, the offering period will immediately reset after the purchase of shares on such purchase date and automatically roll into a new offering period. Shares will be delivered electronically to the participant shortly after the purchase date pursuant to an effective registration statement.
We use a Black-Scholes option pricing model to determine the fair value of shares to be purchased under the 2018 ESPP. Stock-based compensation expense related to our 2018 ESPP for the years ended December 31, 2023 and 2022 was not significant.
The number of shares of common stock that may be made available for sale under the 2018 ESPP also includes an annual increase on the first day of each fiscal year beginning for the fiscal year following the fiscal year in which the first enrollment date (if any) occurs equal to the lesser of (i) 16,377 shares of common stock; (ii) 1.5% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year; or such other amount as the administrator may determine.
The 2018 ESPP had 30,415 and 16,058 shares of common stock available for sale and reserved for issuance as of December 31, 2023 and 2022, respectively.
2009 Equity Incentive Plan
In 2009, we adopted the 2009 Plan, which allowed for the granting of incentive and non-statutory stock options, as defined by the Internal Revenue Code, to employees, directors and consultants. The exercise price of the options granted was generally equal to the value of our common stock on the date of grant, as determined by our board of directors. The awards are exercisable and vested, generally over four years, in accordance with each option agreement. The term of each option is no more than ten years from the date of the grant. The 2009 Plan allowed for options to be immediately exercisable, subject to the Company’s right of repurchase for unvested shares at the original exercise price. There were no unvested shares subject to repurchase provisions outstanding as of December 31, 2023 and 2022. Upon exercise, shares will be delivered electronically to the holder pursuant to an effective registration statement. Effective with the adoption of the 2018 Plan, no additional grants will be made under the 2009 Plan.
Restricted Stock Units
A summary of our restricted stock unit activity is set forth below:
During the third quarter of 2022, we granted 25,340 restricted stock unit awards to team members with an average grant date fair value of $78.50 per share. The awards granted to team members vest over a range of 39 to 49 months with various installment and vesting dates, and are subject to service conditions. We also granted 500 restricted stock units to a non-employee consultant with a grant date fair value of $85.00 per share. The award vests on March 31, 2023 and is subject to service conditions.
During the fourth quarter of 2022, we granted 780 restricted stock unit awards to team members with an average grant date fair value of $76.00 per share. The awards granted to team members vest over a range of 48 months with various installment and vesting dates, and are subject to service conditions. We also granted 7,952 restricted stock units to non-employee directors, each with a grant date fair value of $74.00. The awards granted to non-employee directors generally vest quarterly over 12 months, and are subject to service conditions.
During the first quarter of 2023, we granted 38,420 restricted stock unit awards to team members with an average grant date fair value of $46.00 per share. The vesting provisions were generally such that one-third of the awards vested immediately with the remaining vesting at various dates through November 2024. We also granted 7,454 restricted stock unit awards to members of our team in lieu of cash bonus earned during 2022 with a grant date fair value of $46.50. These awards vested immediately.
During the second quarter of 2023, we granted 6,460 restricted stock unit awards to team members with an average grant date fair value of $30.00 per share. The vesting of these awards occurs at various dates through May 2027.
During the third quarter of 2023, we granted 70,660 restricted stock unit awards to team members with an average grant date fair value of $14.00 per share. The vesting of these awards occurs at three equal installments on August 1, 2023, August 1, 2024 and August 1, 2025. We also granted 1,234 restricted stock units to a consultant. Those restricted stock units vested in full at August 31, 2023.
During the fourth quarter of 2023, we granted 18,000 restricted stock units to an executive officer with a grant date fair value of $7.315 per share. The vesting of this award was such that 10,000 restricted stock units vested upon grant, 4,000 restricted stock units vested each of November 30, 2023 and January 12, 2024. We also granted 13,320 restricted stock units to a consultant and board member in lieu of cash payments with an average grant date fair value of $6.85 per share. Those restricted stock units vested immediately.
The restricted stock unit grants were valued based on the fair value of our common stock on the date of grant.
Pursuant to an agreement entered into by us with our former Chief Executive Officer, we modified the remaining vesting schedule related to the unvested portion of the individual's outstanding equity awards as of December 2022. The original equity awards were made at multiple occurrences, each of which contained various vesting share amounts on various dates, with the last vesting period originally scheduled to occur in May 2025. As additional compensation under the agreement, we modified the vesting schedule with respect to the unvested portion of restricted stock units under the individual's awards, such that 789 restricted stock units will vest on each of the last day of each month from January 2023 through December 2023. Incremental costs associated with this modification was not significant for the year ended December 31, 2023.
Stock Options
A summary of our stock option activity under the 2018 Plan and related information is as follows:
A summary of our stock option activity under the 2009 Plan and related information is set forth below:
During 2022, we granted options to purchase 1,000 shares of our common stock to two non-employee consultants with an exercise price of $85.00 per share. The options vested in various increments with the final vest date occurring on December 30, 2022.
During 2023, we granted an option to purchase 1,500 shares of our common stock to a non-employee consultant with an exercise price of $38.00 per share. As of December 31, 2023, the option had fully vested. We have historically used the Black-Scholes option pricing model to estimate the fair value of our stock option awards. Stock based compensation related to this grant was not significant.
The weighted average grant date fair value of options granted during 2023 and 2022 was $38.15 and $27.00, respectively. The total fair value for options vested during the years ended December 31, 2023 and 2022 was $6 and $42, respectively.
The aggregate intrinsic value is based on our stock price trading price on the Nasdaq Capital Market. The aggregate intrinsic value of options exercised was $16 and $50 for the years ended December 31, 2023 and 2022, respectively, and is calculated based on the difference between the estimated fair value of our common stock at the date of exercise and the exercise price.
Stock-Based Compensation
Compensation cost that has been included in our consolidated statements of operations and comprehensive loss for all stock-based compensation arrangements is set forth below:
As of December 31, 2023, there was approximately $2,131 total unrecognized compensation cost related to our stock benefit plans. These unrecognized compensation costs are expected to be recognized over an estimated weighted-average period of approximately 2.0 years.
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