Personalis Inc
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
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Stock-Based Compensation
Note 10. Stock-Based Compensation
Shares of common stock reserved for issuance under the Company’s equity incentive plans were as follows:
| Outstanding stock awards | 9,155,525 |
|---|---|
| Reserved for future award grants | 5,386,630 |
| Reserved for future ESPP | 192,341 |
| Total common stock reserved for stock awards | 14,734,496 |
Service-Based Stock Option Activity
A summary of the Company’s service-based stock option activity (excluding performance-based stock option activity, which is presented separately below) for the six months ended June 30, 2024 is as follows:
| Outstanding Service-Based Options | ||||
|---|---|---|---|---|
| (in thousands, except share and per share data) | Number ofShares | Weighted-AverageExercise Price | Weighted-AverageRemainingContractualTerm (in years) | AggregateIntrinsicValue |
| Balance—December 31, 2023 | 5,805,586 | $7.40 | 6.90 | $64 |
| Options granted | 2,924,500 | 1.56 | ||
| Options exercised | — | — | ||
| Options forfeited or expired | (617,967) | 10.36 | ||
| Balance—June 30, 2024 | 8,112,119 | $5.07 | 8.01 | $6 |
| Options vested and exercisable as of June 30, 2024 | 3,663,128 | $8.19 | 6.49 | $— |
The weighted-average grant date fair value of options granted was $0.92 and $1.51 per share for the three months ended June 30, 2024 and 2023, and $1.05 and $1.84 per share for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, the unrecognized stock-based compensation cost of unvested options was $6.7 million, which is expected to be recognized over a weighted-average period of 2.2 years.
Valuation of Service-Based Stock Options
The Company estimated the fair value of service-based stock options using the Black-Scholes option-pricing model. Fair value of stock options is recognized as compensation expense on a straight-line basis over the requisite service periods of the awards. Fair value of stock options was estimated using the following range of assumptions:
| Three Months Ended June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Expected term (in years) | 5.50 - 6.08 | 5.50 - 6.02 | 5.50 - 6.08 | 5.50 - 6.02 |
| Volatility | 72.61 - 73.12% | 78.47 - 79.31% | 72.61 - 80.28% | 78.47 - 79.31% |
| Risk-free interest rate | 4.35 - 4.65% | 3.47 - 3.98% | 3.88 - 4.65% | 3.47 - 3.98% |
| Dividend yield | –% | –% | –% | –% |
Performance-Based Stock Option Activity
During 2024, the Company granted performance-based stock options ("PSOs") to the executive leadership team. Vesting of the PSOs is based upon attainment of certain Medicare reimbursement coverages by the end of 2025 and subject to continuous service by the executives. Fair value was estimated using the Black-Scholes option-pricing model. Total grant-date fair value of the PSOs was $0.3 million.
A summary of the Company's performance-based stock option activity for the six months ended June 30, 2024 is as follows:
| Outstanding Performance-Based Options | ||||
|---|---|---|---|---|
| (in thousands, except share and per share data) | Number ofShares | Weighted-AverageExercise Price | Weighted-AverageRemainingContractualTerm (inyears) | AggregateIntrinsicValue |
| Balance—December 31, 2023 | — | $— | — | $— |
| Options granted | 271,500 | 1.61 | ||
| Balance—June 30, 2024 | 271,500 | $1.61 | 9.71 | $— |
| Options vested and exercisable as of June 30, 2024 | — | |||
Restricted Stock Units ("RSU") Activity and Valuation
A summary of the Company’s RSU activity for the six months ended June 30, 2024 is as follows:
| Unvested Restricted Stock Units | |||
|---|---|---|---|
| (in thousands, except share and per share data) | Number ofShares | Weighted-AverageGrant Date Fair Value | Aggregate Fair Value |
| Balance—December 31, 2023 | 1,253,826 | $8.99 | $2,633 |
| RSUs granted | — | — | |
| RSUs vested | (280,595) | 12.48 | 394 |
| RSUs forfeited | (201,325) | 10.25 | |
| Balance—June 30, 2024 | 771,906 | $7.39 | $903 |
As of June 30, 2024, the unrecognized stock-based compensation cost of unvested RSUs was $4.7 million, which is expected to be recognized over a weighted-average period of 1.6 years.
ESPP Activity and Valuation
During the three and six months ended June 30, 2024 and 2023,395,552 and 468,643 shares of common stock were purchased under the Employee Stock Purchase Plan ("ESPP"). The fair value of stock purchase rights granted under the ESPP was estimated using the following assumptions:
| Three and Six Months Ended June 30, | ||
|---|---|---|
| 2024 | 2023 | |
| Expected term (in years) | 0.50 | 0.50 |
| Volatility | 61.35% | 84.88% |
| Risk-free interest rate | 5.43% | 5.14% |
| Dividend yield | –% | –% |
| Grant-date fair value per share | $0.51 | $0.91 |
Stock-Based Compensation Expense
The following is a summary of stock-based compensation expense by award type (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Service-based stock options | $1,237 | $1,505 | $2,452 | $2,848 |
| Performance-based stock options | 35 | — | 41 | — |
| RSUs | 1,324 | 1,757 | 2,732 | 3,880 |
| ESPP | 57 | 223 | 115 | 452 |
| Total stock-based compensation expense | $2,653 | $3,485 | $5,340 | $7,180 |
The following is a summary of stock-based compensation expense by function (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Cost of revenue | $153 | $436 | $307 | $926 |
| Research and development | 1,046 | 1,241 | 1,993 | 2,486 |
| Selling, general and administrative | 1,454 | 1,808 | 3,040 | 3,768 |
| Total stock-based compensation expense | $2,653 | $3,485 | $5,340 | $7,180 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.