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STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2021

14 - STOCK-BASED COMPENSATION

2015 Equity Incentive Plan

On March 19, 2021, the Board of Directors approved an amendment and restatement of the 2015 Equity Incentive Plan (the “Amended 2015 Plan”). This amendment and restatement increased the number of shares available for awards under the plan from 2,750,000 to 4,750,000, subject to shareholder approval. The Company’s shareholders approved the increase in the number of shares at the Company’s 2021 Annual Meeting of Shareholders on May 13, 2021. As of June 30, 2021, the Company has awarded restricted stock units, restricted stock and stock options under the Amended 2015 Plan.

Stock Options

On February 23, 2021, the Company issued options to purchase 118,552 of the Company’s shares of common stock to certain individuals with an exercise price of $9.91 per share. One third of the options become exercisable on each of the first three anniversaries of February 23, 2021, with accelerated vesting that may occur following a change in control of the Company, and all unexercised options expire on the sixth anniversary of the grant date. The fair value of each option was estimated on the date of the grant using the Cox-Ross-Rubinstein pricing formula, resulting in a value of $4.33 per share, or $513 in the aggregate. The assumptions used in the Cox-Ross-Rubinstein option pricing formula are as follows: volatility of 60.91% (representing the Company’s historical volatility), a risk-free interest rate of 0.41%, a dividend yield of 0.98%, and expected life of 4 years (determined using the simplified method as outlined in SAB Topic 14 due to lack of historical exercise data).

For the three and six months ended June 30, 2021 and 2020, the Company recognized amortization expense of the fair value of these options, which is included in General and administrative expenses, as follows:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
General and administrative expenses	$	151	$	192	$	330	$	397

Amortization of the unamortized stock-based compensation balance of $673 as of June 30, 2021 is expected to be expensed $306, $278, $81 and $8 during the remainder of 2021 and during the years ending December 31, 2022, 2023 and 2024, respectively. The following table summarizes the stock option activity for the six months ended June 30, 2021:


		Weighted		Weighted
	Number	Average		Average
	of	Exercise		Fair
	Options	Price		Value
Outstanding as of January 1, 2021	837,338	$	8.86		4.02
Granted	118,552		9.91		4.33
Exercised	(24,544)		7.34		2.49
Forfeited	—		—		—

Outstanding as of June 30, 2021	931,346	$	9.04	$	4.10

Exercisable as of June 30, 2021	504,028	$	9.88	$	5.04

The following table summarizes certain information about the options outstanding as of June 30, 2021:

Options Outstanding and Unvested,

Options Outstanding and Exercisable,

June 30, 2021

Weighted

Average

Weighted

Average

Weighted

Average

Exercise Price of

Average

Remaining

Average

Remaining

Outstanding

Number of

Exercise

Contractual

Number of

Exercise

Contractual

Options

Price

Life

Options

Price

Life

9.04

427,318

8.04

4.75

504,028

9.88

3.11

As of June 30, 2021 and December 31, 2020, a total of 931,346 and 837,338 stock options were outstanding, respectively.

Restricted Stock Units

The Company has issued restricted stock units (“RSUs”) under the 2015 Plan to certain members of the Board of Directors and certain executives and employees of the Company, which represent the right to receive a share of common stock, or in the sole discretion of the Company’s Compensation Committee, the value of a share of common stock on the date that the RSU vests. As of June 30, 2021 and December 31, 2020, 478,848 and 373,588 shares of the Company’s common stock were outstanding in respect of the RSUs, respectively. Such shares of common stock will only be issued in respect of vested RSUs issued to directors when the director’s service with the Company as a director terminates. Such shares of common stock will only be issued to executives and employees when their RSUs vest under the terms of their grant agreements and the amended 2015 Plan.

The RSUs that have been issued to certain members of the Board of Directors generally vest on the date of the annual shareholders meeting of the Company following the date of the grant. In lieu of cash dividends issued for vested and nonvested shares held by certain members of the Board of Directors, the Company will grant additional vested and nonvested RSUs, respectively, which are calculated by dividing the amount of the dividend by the closing price per share of the Company’s common stock on the dividend payment date and will have the same terms as other RSUs issued to members of the Board of Directors. The RSUs that have been issued to other individuals vest ratably on each of the three anniversaries of the determined vesting date. The table below summarizes the Company’s unvested RSUs for the six months ended June 30, 2021:


		Weighted
	Number of	Average Grant
	RSUs	Date Price
Outstanding as of January 1, 2021	298,834	$	7.49
Granted	156,445		11.85
Vested	(148,924)		7.66
Forfeited	—		—

Outstanding as of June 30, 2021	306,355	$	9.64

The total fair value of the RSUs that vested during the six months ended June 30, 2021 and 2020 was $1,798 and $352, respectively. The total fair value is calculated as the number of shares vested during the period multiplied by the fair value on the vesting date.

The following table summarizes certain information of the RSUs unvested and vested as of June 30, 2021:


Unvested RSUs				Vested RSUs
June 30, 2021				June 30, 2021
			Weighted
	Weighted		Average		Weighted
	Average		Remaining		Average
Number of	Grant Date		Contractual	Number of	Grant Date
RSUs	Price		Life	RSUs	Price
306,355	$	9.64	1.87	654,821	$	10.30

The Company is amortizing these grants over the applicable vesting periods, net of anticipated forfeitures. As of June 30, 2021, unrecognized compensation cost of $1,948 related to RSUs will be recognized over a weighted-average period of 1.87 years.

For the three and six months ended June 30, 2021 and 2020, the Company recognized nonvested stock amortization expense for the RSUs, which is included in General and administrative expenses as follows:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
General and administrative expenses	$	401	$	284	$	743	$	560