Stockholders' Equity (Deficit) | 3 Months Ended |
Mar. 29, 2014 |
Statement of Stockholders' Equity [Abstract] | ' |
Stockholders' Equity (Deficit) | ' |
Stockholders’ Equity (Deficit) |
Initial Public Offering |
On January 29, 2014, we closed our IPO in which we sold and issued 6,152,500 shares of common stock, including 802,500 shares of common stock pursuant to the exercise of the underwriters’ option to purchase additional shares, which were sold to the public at a price of $17.00 per share. We received net proceeds of approximately $95.2 million from the IPO, including the exercise of the underwriters’ over-allotment option, net of underwriters’ discounts and commissions, and after deducting offering expenses of approximately $2.1 million. |
Upon the closing of the IPO, all shares of our outstanding redeemable convertible preferred stock automatically converted into 21,490,656 shares of common stock and our outstanding warrant to purchase redeemable convertible preferred stock automatically converted into a warrant to purchase 40,697 shares of common stock at $1.72 per share. |
Common Stock |
As of March 29, 2014 and December 28, 2013, we had reserved the following shares of common stock for future issuance in connection with the following (in thousands): |
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| March 29, 2014 | | December 28, 2013 | | | | | | | | |
Conversion of preferred stock | — | | | 21,299 | | | | | | | | | |
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Contingent consideration payable in Series E convertible preferred stock | — | | | 383 | | | | | | | | | |
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Contingent consideration payable in common stock | 191 | | | — | | | | | | | | | |
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Options issued and outstanding | 3,963 | | | 3,632 | | | | | | | | | |
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Options available for grant under stock option plans | 3,526 | | | 193 | | | | | | | | | |
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Convertible preferred stock warrants | — | | | 41 | | | | | | | | | |
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Common stock warrants | — | | | 40 | | | | | | | | | |
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Total | 7,680 | | | 25,588 | | | | | | | | | |
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Preferred Stock Warrants |
In connection with a debt financing in 2007, we issued Lighthouse Capital Partners a warrant to purchase 40,697 shares of our Series A-1 convertible preferred stock at an exercise price of $1.72 per share, expiring October 2014, which were fully exercisable upon issuance. In conjunction with the closing of our IPO in January 2014, the warrant was automatically converted into a warrant exercisable for 40,697 shares of common stock at a purchase price of $1.72 per share, which resulted in the reclassification of the related convertible preferred stock warrant liability to additional paid-in capital as the warrant met the criteria for equity classification upon conversion to a warrant to purchase common stock. In accordance with ASC 480-10 (Distinguishing Liabilities from Equity) the freestanding warrant for our preferred stock was recognized as a liability and recorded at fair value in all periods prior to its conversion into a warrant to purchase common stock. The warrant liability was re-measured to fair value prior to reclassification to additional paid-in capital. As of March 29, 2014, we had no outstanding warrant liability. The warrant was exercised during the three months ended March 29, 2014 using a net exercise method which resulted in the issuance of 38,142 shares of common stock. There were no proceeds received by us related to this transaction. |
Common Stock Warrants |
In connection with a 2010 Loan and Security Agreement, we issued a warrant to purchase a maximum of 40,000 shares of our common stock at an exercise price of $1.65 per share. The warrant was exercised during the three months ended March 29, 2014 using a net exercise method which resulted in the issuance of 37,591 shares of common stock. There were no proceeds received by us related to this transaction. |
Stock Option Plans |
On November 15, 2006, we adopted our 2006 Stock Incentive Plan (‘‘the 2006 Plan’’), which provides for the issuance of incentive and non-qualified stock options, restricted stock and other stock-based awards to employees and non-employees of the Company. We reserved 4,567,500 shares of common stock for issuance under the 2006 Plan. Options generally vest over four years, with 25% vesting upon the one-year anniversary of the date of hire, and the remaining 75% vesting quarterly over the next three years. Options granted to consultants or other non-employees generally vest over the expected service period to the Company. The options expire ten years from the date of grant. We issue new shares to satisfy stock option exercises. Only stock options have been issued under the 2006 Plan. No grants have been made under the 2006 Plan since our IPO, and no further awards will be granted under the 2006 Plan. However, the 2006 Plan will continue to govern outstanding awards granted under the 2006 Plan. |
During 2010, we granted our Chief Executive Officer a performance-based option to purchase 150,000 shares, which vests in tranches if defined corporate goals are achieved during fiscal years 2011 through 2014. We recorded a share-based compensation expense related to this award of less than $0.1 million and $0.2 million during the quarters ended March 29, 2014, and March 31, 2013, respectively. |
On January 23, 2014, we adopted the 2014 Incentive Award Plan (‘‘the 2014 Plan’’), which provides for the issuance of incentive and non-qualified stock options, restricted stock and other stock-based awards to employees, directors and non-employees of the Company and our subsidiaries. We initially reserved 4,112,048 shares of common stock for issuance under the 2014 Plan. The number of shares initially available for issuance will be increased by (i) the number of shares represented by awards outstanding under the 2006 Plan that are forfeited, lapse unexercised or are settled in cash and which following the effective date of the 2014 Plan are not issued under the 2006 Plan and (ii) an annual increase on January 1 of each calendar year beginning in 2015 and ending in 2019, equal to the lesser of (A) 4% of the shares of common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (B) an amount as determined by our board of directors. No more than 5,002,935 shares of common stock may be issued upon the exercise of incentive stock options. Options generally vest over four years, with 25% vesting upon the one-year anniversary of the date of hire, and the remaining 75% vesting quarterly over the next three years. Options granted to consultants or other non-employees generally vest over the expected service period to the Company. The options expire ten years from the date of grant. To date only stock options have been issued under the 2014 Plan. |
Stock-Based Compensation |
A summary of stock option activity for the quarter ended March 29, 2014 is as follows (in thousands for shares and intrinsic value): |
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| | Number of Shares | | Weighted-Average Remaining Contractual Term (Years) | | Weighted-Average Exercise Price | | Aggregate Intrinsic Value |
Outstanding as of December 28, 2013 | 3,439 | | | 7.98 | | $ | 4.28 | | | $ | 27,148 | |
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Granted | 587 | | | | | 19.64 | | | |
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Canceled and forfeited | (12 | ) | | | | 6.3 | | | |
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Exercised | (51 | ) | | | | 3.08 | | | |
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Outstanding as of March 29, 2014 | 3,963 | | | 8.1 | | $ | 6.57 | | | $ | 40,767 | |
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Options vested and exercisable as of March 29, 2014 | 1,673 | | | 7.2 | | $ | 3.42 | | | $ | 21,667 | |
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Options vested and expected to vest as of March 29, 2014 (1) | 3,789 | | | 8.1 | | $ | 6.5 | | | $ | 39,213 | |
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(1) Options expected to vest reflect an estimated forfeiture rate |
Aggregate intrinsic value represents the difference between the closing stock price of our common stock and the exercise price of outstanding, in-the-money options. Our closing stock price as reported on the NYSE as of March 29, 2014 was $16.37. The total intrinsic value of options exercised was approximately $1.0 million and $0.1 million for the quarters ended March 29, 2014 and March 31, 2013, respectively. The weighted-average grant-date fair value of options granted was $9.37 and $2.68 for the quarters ended March 29, 2014 and March 31, 2013, respectively. The aggregate fair value of the options that vested during the quarters ended March 29, 2014 and March 31, 2013 was $1.3 million and $0.5 million, respectively. |
As of March 29, 2014, total unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options was approximately $9.7 million, which is expected to be recognized over the next 3.1 years. As of March 29, 2014, we had 3,525,790, shares available for grant under the 2014 Plan. |
The following table presents the weighted-average assumptions used to estimate the fair value of options granted during the periods presented: |
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| Fiscal Quarter Ended | | | | | | | | | | |
| March 29, | | March 31, | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | |
Risk-free interest rate | 1.85 - 2.88 % | | 1.23 - 2.04 % | | | | | | | | | | |
Expected term (years) | 4.88 - 10 | | 6 - 9.55 | | | | | | | | | | |
Volatility | 47.1 - 47.3 % | | 44.60% | | | | | | | | | | |
Expected dividend yield | — | | — | | | | | | | | | | |
The following table summarizes stock-based compensation in our accompanying unaudited condensed consolidated statements of operations (in thousands): |
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| Fiscal Quarter Ended | | | | | | |
| March 29, | | March 31, | | | | | | |
2014 | 2013 | | | | | | |
Cost of revenue | $ | 47 | | | $ | 38 | | | | | | | |
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Selling and marketing | 146 | | | 75 | | | | | | | |
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Research and development | 89 | | | 49 | | | | | | | |
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General and administrative | 817 | | | 135 | | | | | | | |
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Total stock-based compensation | $ | 1,099 | | | $ | 297 | | | | | | | |
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