Quarterly report pursuant to Section 13 or 15(d)

SHARE-BASED COMPENSATION

v3.21.2
SHARE-BASED COMPENSATION
9 Months Ended
Sep. 30, 2021
SHARE-BASED COMPENSATION  
11. SHARE-BASED COMPENSATION

11. SHARE-BASED COMPENSATION

 

During 2019 the Company’s Board of Directors adopted the 2019 Stock and Incentive Plan (the “Plan”), which was amended in April 2020 and March 2021. The Plan permits the issuance of stock options, stock appreciation rights, stock awards, share units, performance shares, performance units and other stock-based awards, and, as of September 30, 2021, 13.2 million shares have been authorized to be issued under the Plan and 4.5 million are available for future grant. The Plan provides for the grant of options as either non-statutory stock options or incentive stock options and restricted stock units to employees, officers, directors, and consultants of the Company to attract and retain persons of ability to perform services for the Company and to reward such individuals who contribute to the achievement by the Company of its economic objectives. The awards granted generally vest in 25% increments over a four-year period and option awards expire 6 years from grant date.

 

The Plan is administered by the Board or a committee appointed by the Board, which determines the persons to whom the awards will be granted, the type of awards to be granted, the number of awards to be granted, and the specific terms of each grant, including the vesting thereof, subject to the provisions of the Plan.

 

During the three and nine months ended September 30, 2021 and 2020, the Company granted shares to certain employees as compensation for services. These shares were accounted for in accordance with ASC 718 - Compensation - Stock Compensation. The Company amortizes awards over the service period and until awards are fully vested.

 

For the three and nine months ended September 30, 2021 and 2020, share-based compensation expense was as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

(in thousands)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Cost of goods sold

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

General and administrative expense

 

 

361

 

 

 

187

 

 

 

986

 

 

 

2,012

 

Total share-based compensation

 

$ 361

 

 

$ 187

 

 

$ 986

 

 

$ 2,012

 

 

The following table summarizes the status of stock option grants and unvested awards at and for the nine months ended September 30, 2021:

 

 

 

 

 

 

 

Weighted-Average

 

 

 

 

 

Stock

 

 

Weighted-Average

 

 

Remaining

 

 

Aggregate

 

(in thousands except per share amounts)

 

Options

 

 

Exercise Price

 

 

Contractual Life

 

 

Intrinsic Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding-December 31, 2020

 

 

6,260

 

 

$ 0.97

 

 

 

4.7

 

 

$ 3,162

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

2,330

 

 

 

1.35

 

 

 

 

 

 

 

 

 

Exercised

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

Cancelled

 

 

(1,692 )

 

 

1.42

 

 

 

 

 

 

 

 

 

Outstanding-September 30, 2021

 

 

6,898

 

 

$ 0.99

 

 

 

4.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable-September 30, 2021

 

 

1,796

 

 

$ 1.33

 

 

 

1.8

 

 

$ 424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and expected to vest-September 30, 2021

 

 

6,898

 

 

$ 0.99

 

 

 

4.5

 

 

$ 1,372

 

 

The weighted-average fair value of options granted during the three and nine months ended September 30, 2021, estimated as of the grant date, were $1.08 and $1.35, respectively. As of September 30, 2021, there was $1,156 of total unrecognized compensation cost related to non-vested options, which is expected to be recognized over a remaining weighted-average vesting period of 1.9 years.

The following table summarizes the status of restricted stock unit (“RSU”) grants and unvested awards at and for the nine months ended September 30, 2021:

 

 

 

 

 

 

Weighted-Average

 

(in thousands except per share amounts)

 

RSUs

 

 

Fair Value

 

 

 

 

 

 

 

 

Outstanding-December 31, 2020

 

 

450

 

 

$ 0.33

 

 

 

 

 

 

 

 

 

 

Granted

 

 

1,395

 

 

 

1.15

 

Vested

 

 

-

 

 

 

-

 

Cancelled

 

 

(70 )

 

 

1.11

 

Outstanding-September 30, 2021

 

 

1,775

 

 

$ 0.99

 

 

As of September 30, 2021, there was $719 of total unrecognized compensation cost related to non-vested restricted stock units, which is expected to be recognized over a remaining weighted-average vesting period of 17 months.

 

The fair value of the stock options and RSUs granted were determined using the Black-Scholes option-pricing model with the following weighted average assumptions at the time of grant.

 

Stock Options

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Expected volatility

 

 

50 %

 

 

50 %

 

 

50 %

 

 

50 %

Dividend yield

 

 

0 %

 

 

0 %

 

 

0 %

 

 

0 %

Risk-free interest rate

 

 

1.0 %

 

 

0.4 %

 

 

0.9 %

 

 

0.5 %

Expected term in years

 

 

4.25

 

 

 

6.00

 

 

 

4.25

 

 

 

6.00

 

 

RSUs

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Expected volatility

 

 

50 %

 

 

50 %

 

 

50 %

 

 

50 %

Dividend yield

 

 

0 %

 

 

0 %

 

 

0 %

 

 

0 %

Risk-free interest rate

 

 

0.9 %

 

 

0.9 %

 

 

0.9 %

 

 

0.9 %

Expected term in years

 

 

0.74

 

 

 

0.60

 

 

 

0.74

 

 

 

0.60