Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

v3.24.0.1
Stockholders' Equity
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Stockholders' Equity Stockholders’ Equity
Equity Compensation Plans
The Company currently grants stock options, restricted stock awards, and restricted stock units under the Fourth Amended and Restated 2013 Incentive Compensation Plan (the "2013 Plan"). The total shares of the Company’s common stock being reserved for issuance under the 2013 Plan is 4,156,250, of which 2,110,835 shares were outstanding as of December 31, 2023 and 421,940 shares remained available for grants under the 2013 Plan as of that date.
Share-Based Compensation Expense
The Company records share-based compensation expense on a straight-line basis over the related vesting period and recognizes forfeitures as they occur. The following table sets forth share-based compensation expense included in the consolidated statements of operations:
Years Ended December 31,
(in thousands)
2023 2022
Cost of revenue $ 101  $ 63 
Research and development 1,352  1,060 
Sales and marketing 1,717  809 
General and administrative 2,909  2,194 
  Share-based compensation expense $ 6,079  $ 4,126 
Share-based compensation expense by type of share-based award:
Years Ended December 31,
(in thousands)
2023 2022
Stock options $ 956  $ 1,076 
RSAs and RSUs 4,903  2,828 
ESPP 220  222 
  $ 6,079  $ 4,126 
Total unrecognized compensation expense by type of award and the weighted-average remaining requisite service period over which such expense is expected to be recognized (in thousands, unless otherwise noted):
December 31, 2023
Unrecognized Expense Remaining Weighted-Average Recognition Period (in years)
Stock options 1,000  1.63
RSAs and RSUs 6,889  1.75
Stock Option Activity
Options granted under the 2013 Plan must have an exercise price equal to at least 100% of fair market value of the Company's common stock on the date of grant. The options generally have a maximum contractual term of ten years and vest in accordance with the individual award agreements.
Stock option activity under all of the Company’s Plans as of and for the year ended December 31, 2023 is summarized below:
Stock Options Weighted-average
Exercise price
per share		 Weighted-average Remaining Contractual Life (in years)
Intrinsic Value
(in thousands)(1)
Outstanding at December 31, 2022 1,398,286  $ 8.69 
Granted 111,107  $ 8.10 
Exercised (20,000) $ 1.82 
Forfeited or expired (11,236) $ 53.05 
Outstanding at December 31, 2023 1,478,157  $ 8.40  5.46 $ 3,548 
Exercisable at December 31, 2023 1,251,942  $ 8.00  4.88 $ 3,548 
Vested and expected to vest at December 31, 2023 1,478,157 $ 8.40  5.46 $ 3,548 
(1)    Intrinsic value is calculated as the estimated fair value of the Company’s stock at December 31, 2023 less the option exercise price of in-the-money options.
A summary of the status of the Company’s non-vested stock options for the year ended December 31, 2023 is presented below:
Non-vested Stock Options Weighted - Average
Grant
Date Fair Value
Nonvested, December 31, 2022 264,665  $ 7.19 
Granted 111,107  $ 5.85 
Vested (149,557) $ 5.93 
Nonvested, December 31, 2023 226,215  $ 7.37 
The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2023 and 2022 was $5.85 per share and $8.21 per share, respectively.
The total intrinsic value of stock options exercised during the years ended December 31, 2023 and 2022 was $0.1 million and $0.3 million, respectively, and represents the difference between the exercise price of the option and the fair value of the common stock on the dates exercised. The total grant-date fair value of stock options vested during each of the years ended December 31, 2023 and 2022 was $0.9 million.
The exercise price of stock options granted is equal to the closing price of the common stock on the date of grant. The fair value of each stock option is estimated on the date of grant using the Black-Scholes valuation model utilizing the following weighted average assumptions for options granted during the years ended December 31, 2023 and 2022:
Years Ended December 31,
2023 2022
Risk-free interest rate 4.17% 3.07%
Expected life (in years) 6.10 5.93
Estimated volatility 81.21% 90.02%
Expected dividends None None
Restricted Stock Activity
The Company issues Restricted Stock Awards ("RSAs") and Restricted Stock Units ("RSUs"). RSAs are grants that entitle the holder to acquire shares of the Company's common stock at zero cost. The shares covered by a RSA cannot be sold, transferred, pledged, assigned or otherwise disposed of until the award vests. A RSU is a promise by the Company to issue a share of its common stock upon vesting of the unit. Both RSAs and RSUs vest in annual installments over a two to three-year period, contingent on the holder's continued employment with the Company. Annual grants of restricted stock to the Board of Directors typically vest in one year.
RSA activity as of and for the year ended December 31, 2023 is summarized below:
Restricted Stock Awards Weighted - Average
Grant
Date Fair Value
Outstanding at December 31, 2022 684,389  $ 11.10 
Vested (298,480) $ 9.92 
Forfeited or expired (8,995) $ 12.17 
Outstanding at December 31, 2023 376,914  $ 12.02 

RSU activity as of and for the year ended December 31, 2023 is summarized below:
Restricted Stock Units Weighted - Average
Grant
Date Fair Value
Outstanding at December 31, 2022 13,146  $ 11.41 
Granted 773,526  $ 8.08 
Vested (18,533) $ 7.76 
Outstanding at December 31, 2023 768,139  $ 8.15 
The estimated fair value of the restricted stock is based on the closing market value of the Company's common stock on the date of grant. The total fair value of RSAs and RSUs vested during the years ended December 31, 2023 and 2022 was $3.1 million and $1.6 million, respectively.
Employee Stock Purchase Plan
On June 3, 2021, the Company's stockholders adopted and approved the ClearPoint Neuro, Inc. Employee Stock Purchase Plan (the "ESPP"). A total of 400,000 shares of the Company’s common stock are available for issuance pursuant to the terms of the ESPP. The ESPP provides eligible employees the opportunity to purchase shares of common stock at the lower of 85% of the fair market value on either the first day or the last day of the applicable offering period, by having withheld from their salary an amount up to 15% of their compensation. No employee may purchase more than $25,000 worth of common stock (calculated at the time the purchase right is granted) in any
calendar year, nor may any employee purchase more than 3,500 shares in any six-month purchase period. The initial six-month purchase period commenced in July 2021.
The ESPP is deemed to be compensatory, and therefore, ESPP expense has been included in share-based compensation expenses in the consolidated statement of operations for the years ended December 31, 2023 and 2022.
During the year ended December 31, 2023, 84,430 shares were purchased at an average per share price of $6.00. On December 31, 2023, 236,091 shares of common stock were available for issuance under the ESPP.
The fair value of the purchase options under the ESPP are estimated at the beginning of the purchase period using the Black-Scholes valuation model utilizing the following assumptions:
2023 2022
Risk-free interest rate
4.77% - 5.53%
0.22% - 2.25%
Expected life (in years) 0.5 0.5
Estimated volatility
61.41% - 62.37%
61.29% - 78.23%
Expected dividends None None
The weighted-average fair value per ESPP purchase right during the years ended December 31, 2023 and 2022 was $2.57 per share and $4.14 per share, respectively.
Warrants
Warrants to purchase shares of the Company's common stock were issued in connection with financing transactions in 2015 and 2017. These warrants contained net exercise provisions giving the holder the option of acquiring a number of shares having a value equal to the difference between the exercise price and the current stock price, in lieu of paying the exercise price to acquire the full number of stated shares. All of the remaining outstanding warrants expired in 2023.
Common stock warrant activity for the year ended December 31, 2023 is as follows:
Shares Weighted - Average
Exercise
Price
Outstanding at December 31, 2022 36,554  $ 16.23 
Expired (36,554) $ 16.23 
Outstanding at December 31, 2023 —  $ —