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Share Based Payments and Employee Benefit Plans
12 Months Ended
Dec. 31, 2021
Share Based Payments and Employee Benefit Plans  
Share Based Payments and Employee Benefit Plans

Note 14.—Share Based Payments and Employee Benefit Plans

The Company maintains an equity-based incentive compensation plan, the terms of which are governed by the 2020 Equity Incentive Plan (the 2020 Incentive Plan). The 2020 Incentive Plan provides for the grant of stock appreciation rights, RSUs, DSUs, performance shares and other stock and cash-based incentive awards. Employees, directors, consultants or other persons providing services to the Company or its affiliates are eligible to receive awards pursuant to the 2020 Incentive Plan. In connection with the adoption of the 2020 Incentive Plan, the Company’s 2010 Omnibus Incentive Plan (2010 Plan), which was scheduled to expire in July 2020, was frozen for new grants.  The 2010 Plan will remain in place only for the issuance of shares of common stock pursuant to equity compensation awards outstanding under the 2010 Plan, which awards will continue to be governed by the terms of the 2010 Plan.  As of December 31, 2021, the aggregate number of shares reserved under the 2020 Incentive Plan and 2010 Plan, is 2,000,000 and 952,646 shares, respectively, and there were 1,477,760 shares available for grant as stock options, RSUs, DSUs or other stock and cash-based incentive awards under the 2020 Incentive Plan. The Company issues new shares of common stock to satisfy stock option exercises, RSU vesting, DSU issuances and other stock-based incentive awards.

The fair value of options granted, which is amortized to expense over the option service period, is estimated on the date of grant with the following weighted average assumptions:

For the Year Ended December 31, 

2021

2020

Risk-free interest rate

    

0.50%

1.45%

Expected lives (in years)

 

4.54

4.94

Expected volatility

77.55%

61.21%

Expected dividend yield

0.00%

0.00%

Fair value per share

$

1.96

$

3.13

The following table summarizes activity, pricing and other information for the Company’s stock options for the years presented below:

For the Year Ended December 31, 

2021

2020

Weighted-

Weighted-

Average

Average

Number of

Exercise

Number of

Exercise

Shares

Price

Shares

Price

Options outstanding at the beginning of the year

    

524,357

    

$

8.58

    

914,470

    

$

8.10

    

Options granted

 

85,154

 

3.29

 

30,000

 

5.34

 

Options exercised

 

 

 

(9,500)

 

4.84

 

Options forfeited/cancelled

 

(39,283)

 

7.15

 

(410,613)

 

7.35

 

Options outstanding at the end of the period

 

570,228

7.89

 

524,357

8.58

 

Options exercisable at the end of the period

 

406,361

$

9.65

 

327,366

$

11.46

 

The aggregate intrinsic value in the following table represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $1.11 and $3.04 per common share as of December 31, 2021 and 2020, respectively. Aggregate intrinsic value represents the amount of proceeds the option holders would have received had all option holders exercised their options and sold the stock as of that date.

As of December 31, 

 

2021

2020

 

Weighted-

Weighted-

Average

Aggregate

Average

Aggregate

Remaining

Intrinsic

Remaining

Intrinsic

Life

Value

Life

Value

(Years)

(in thousands)

(Years)

(in thousands)

 

Options outstanding at end of year

    

6.17

    

$

-

    

6.77

    

$

-

Options exercisable at end of year

 

5.43

$

-

 

5.96

$

-

As of December 31, 2021, there was approximately $127 thousand of total unrecognized compensation cost related to stock option compensation arrangements granted, net of estimated forfeitures. That cost is expected to be recognized over the remaining weighted average period of 1.5 years.

For the years ended December 31, 2021 and 2020, the aggregate grant-date fair value of stock options granted was approximately $167 thousand and $94 thousand, respectively.

For the years ended December 31, 2021 and 2020, total stock-based compensation expense was $884 thousand and $702 thousand, respectively.

Additional information regarding stock options outstanding as of December 31, 2021 is as follows:

Stock Options Outstanding

Options Exercisable

 

Weighted-

 

Average

Weighted-

Weighted-

 

Exercise

Remaining

Average

Average

 

Price

Number

Contractual

Exercise

Number

Exercise

 

Range

Outstanding

Life in Years

Price

Exercisable

Price

 

$

3.22 - 3.74

 

150,872

 

7.91

$

3.45

 

53,671

$

3.59

3.75 - 5.38

 

200,000

 

7.16

 

3.75

 

133,334

 

3.75

5.39 - 9.85

 

27,582

 

4.01

 

7.01

 

27,582

 

7.01

9.86 - 17.39

86,524

4.15

 

11.99

 

86,524

 

11.99

17.40 - 20.49

 

51,250

 

4.55

 

17.40

 

51,250

 

17.40

20.50 - 20.50

 

54,000

 

3.56

 

20.50

 

54,000

 

20.50

$

3.22 - 20.50

 

570,228

 

6.17

$

7.89

 

406,361

$

9.65

In addition to the options granted, the Company has granted DSUs, which vest between one and three year periods. The fair value of each DSU was measured on the date of grant using the grant date price of the Company’s stock. In 2021, the Company did not grant any DSUs.

The following table summarizes activity, pricing and other information for the Company’s DSUs for the year ended December 31, 2021:

Weighted-

Average

Number of

Grant Date

Shares

Fair Value

DSUs outstanding at the beginning of the year

    

54,500

    

$

6.61

    

DSUs granted

 

 

 

DSUs issued

 

 

 

DSUs forfeited/cancelled

 

 

 

DSUs outstanding at the end of the period

 

54,500

$

6.61

 

As of December 31, 2021, there was approximately $6 thousand of total unrecognized compensation cost related to the DSU compensation arrangements granted under the plan. This cost is expected to be recognized over a weighted average period of 0.2 years.

The following table summarizes activity, pricing and other information for the Company’s RSUs for the ended December 31, 2021:

Weighted-

Average

Number of

Grant Date

Shares

Fair Value

RSUs outstanding at beginning of the year

    

267,221

    

$

5.04

RSUs granted

 

245,332

 

3.29

RSUs issued

 

(94,493)

 

4.78

RSUs forfeited/cancelled

 

(20,231)

 

3.29

RSUs outstanding at end of the period

 

397,829

$

4.11

For the year ended December 31, 2021, the aggregate grant-date fair value of RSUs granted was approximately $807 thousand. As of December 31, 2021, there was approximately $1.0 million of total unrecognized compensation cost related to the RSU compensation arrangements granted under the plan. This cost is expected to be recognized over a weighted average period of 1.7 years.

401(k) Plan

After meeting certain employment requirements, employees can participate in the Company’s 401(k) plan. Under the 401(k) plan, employees may contribute up to 25% of their salaries, pursuant to certain restrictions. Effective January 1, 2020, the Company matches 50% of the first 6% of employee contributions. Additional contributions may be made at the discretion of the board of directors. During the years ended December 31, 2021 and 2020, the Company recorded compensation expense of approximately $1.0 million and $1.0 million for basic matching contributions, respectively. There were no discretionary matching contributions recorded during the years ended December 31, 2021 or 2020.