Stock Award Plans and Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Award Plans and Stock-Based Compensation | Note 8 — Stock Award Plans and Stock-Based Compensation Equity Incentive Plan On June 19, 2018, the Company’s Shareholders and Board of Directors (the “Board of Directors”) approved the Myomo, Inc. 2018 Stock Options and Incentive Plan (the “2018 Plan”). On January 1 of each year, the number of shares of common stock reserved and available for issuance under the 2018 Plan will cumulatively increase by 4% of the number shares of common stock outstanding on the immediately preceding December 31 or such lesser number of shares of common stock determined by management in consultation with members of the Board of Directors, including the compensation committee of the Board of Directors. On January 1, 2023 and 2022, the number of shares reserved and available for issuance under the 2018 Plan increased by 310,024 and 274,789 shares, respectively. At December 31, 2023, there were 119,123 shares available for future grant under the 2018 Plan. Under the terms of the 2018 Plan, incentive stock options (“ISOs”) may be granted to officers and employees and non-qualified stock options and awards may be granted to directors, consultants, officers and employees of the Company. The exercise price of ISOs cannot be less than the fair market value of the Company’s Common Stock on the date of grant. The options vest over a period determined by the Board of Directors, ranging from immediate to four years, and expire not more than ten years from the date of grant. Stock Option Awards Stock option activity under the Stock Option Plans during the years ended December 31, 2023 and 2022 is as follows:
The Company uses the Black-Scholes option pricing model to estimate the grant date fair value of its stock options. There was no income tax benefit recognized in the financial statements for share-based compensation arrangements for the years ended December 31, 2023 and 2022. There were no stock options granted during the year ended December 31, 2023. The weighted-average grant date fair value was $6.92 per share for the year ended December 31, 2022. The following weighted average assumptions underlying the calculation of grant date fair value are as follows:
The stock price volatility for the Company’s options was determined using the Company’s historical volatility since its initial public offering in June 2017. The risk-free interest rate was derived from U.S. Treasury rates existing on the date of grant for the applicable expected option term. The expected term represents the period of time that options are expected to be outstanding. Because the Company has only very limited historical exercise behavior, it determines the expected life assumption using the simplified method, which is an average of the contractual term of the option and its ordinary vesting period. The expected dividend yield assumption is based on the fact that the Company has never paid, nor has any intention to pay, cash dividends.
Restricted Stock Units
Restricted stock unit “RSU” activity for the years ended December 31, 2023 and 2022 is summarized below:
In 2023 and 2022, the Company granted an aggregate of 1,450,445 and 340,923 RSUs to employees, respectively, of which 608,000 and 203,510 RSUs were granted to executive officers, respectively, which vest over a period of two years and three years, respectively. In 2023, the Company granted 239,952 RSUs to independent members of the board of directors, which vest in four equal quarterly installments. No RSUs were granted to independent members of the board of directors in 2022. The Company determined the fair value of these grants based on the closing price of the Company’s common stock on the respective grant dates. The compensation expense is being amortized over the respective vesting periods. Awards of RSUs may be net share settled upon vesting to cover the required employee statutory withholding taxes and the remaining amount is converted into shares based upon their share-value on the date the award vests. These payments of employee withholding taxes, if made, are presented in the statements of cash flows as a financing activity. Share-Based Compensation Expense The Company recognized stock-based compensation expense related to the issuance of stock option awards to employees and non-employees and time-based and performance-based restricted stock units to employees and directors, and restricted stock units to employees in the consolidated statements of operations as follows:
As of December 31, 2023, there was approximately $25,800 of unrecognized compensation cost related to unvested stock options which is expected to be recognized over a weighted-average period of 1.5 years. As of December 31, 2023, there was approximately $867,200 of unrecognized compensation cost related to unvested restricted stock unit awards which is expected to be recognized over a weighted-average period of 1.2 years. |