Stock Plans and Share-Based Payments

3 Months Ended

Mar. 31, 2022

Share-Based Payment Arrangement [Abstract]

Stock Plans and Share-Based Payments

Note 10 – Stock Plans and Share-Based Payments

The fair value of stock options and restricted stock is recognized as stock-based compensation expense in the Company’s condensed consolidated statement of operations and comprehensive loss. The Company calculates stock-based compensation expense in accordance with ASC 718. The fair value of stock-based awards is amortized over the vesting period of the award.

Stock Options

During the three months ended March 31, 2022, the Company granted stock options to purchase 15,500 shares of common stock to employees. These stock options are being expensed over the respective vesting period, which is based on a service condition. The fair value of the stock options granted during the three months ended March 31, 2022 was approximately $38,000.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. The below assumptions for the risk-free interest rates, expected dividend yield, expected lives and expected stock price volatility were utilized for the stock options granted during the three months ended March 31, 2022.

Assumptions for Option Grants
Stock Price Volatility	65.67	%
Risk-Free Interest Rate	1.75	%
Expected Life (in years)	6.24
Expected Dividend Yield	-	%

Stock-based compensation expense related to stock options was $236,000 and $233,000 for the three months ended March 31, 2022 and 2021, respectively. For the three months ended March 31, 2022, approximately $223,000 and $13,000 are included in selling, general and administrative expenses and research and development expenses, respectively, on the accompanying condensed consolidated statement of operations and comprehensive loss. For the three months ended March 31, 2021, approximately $222,000 and $11,000 are included in selling, general and administrative expenses and research and development expenses, respectively, on the accompanying condensed consolidated statement of operations and comprehensive loss.

There was no tax benefit related to expense recognized in the three months ended March 31, 2022 and 2021, as the Company is in a net operating loss position. As of March 31, 2022, there was $2.2 million of total unrecognized compensation expense related to unvested stock-based awards granted under the equity compensation plans, which will be amortized over the weighted average remaining requisite service period of 2.8 years.

Restricted Stock

Total stock-based compensation expense for restricted stock on the Company’s condensed consolidated statement of operations was approximately $41,000 and $41,000 for the three months ended March 31, 2022 and 2021, respectively. For the three months ended March 31, 2022 and 2021, approximately $41,000 is included in selling, general and administrative expenses on the accompanying condensed consolidated statement of operations and comprehensive loss.No restricted stock was granted to employees during the three months ended March 31, 2022. Approximately $168,000 of restricted stock was granted to employees during the three and nine months ended September 30, 2021 for services rendered during the year ended December 31, 2020

As of March 31, 2022, there was approximately $131,000 of unrecognized compensation expense related to unvested stock-based awards granted under the equity compensation plans, which will be amortized over the weighted average remaining requisite service period of 3.0 years.

The aggregate shares of common stock legally issued and outstanding as of March 31, 2022 is greater than the aggregate shares of common stock outstanding for accounting purposes by the amount of unvested restricted shares.

SRP Equity Incentive Plan

SRP’s 2019 Equity Incentive Plan was approved on May 7, 2019 under which 150,000 shares of SRP’s common stock are reserved for the issuance of options and other awards.

There were no SRP stock options granted during the three months ended March 31, 2022. There was no stock-based compensation expense recognized related to the SRP stock options for the three months ended March 31, 2022. Stock-based compensation expense related to the SRP stock options was approximately $2,000 for the three months ended March 31, 2021 and is included in selling, general and administrative expenses on the accompanying condensed consolidated statement of operations and comprehensive loss. SRP stock options are being expensed over the respective vesting period, which is based on a service condition. Stock-based compensation expense related to the SRP stock options is presented by the Company as noncontrolling interest on the consolidated balance sheets as of March 31, 2022 and December 31, 2021.