STOCK-BASED COMPENSATION |
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NOTE 6 -STOCK-BASED COMPENSATION | NOTE 7 - STOCK-BASED COMPENSATION
In 2019, the Company adopted the 2019 BT Brands Incentive Plan (the “2019 Incentive Plan”), under which it may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units, and other stock and cash awards to eligible participants. The number of common shares reserved for issuance is 250,000. As of July 3, 2022, there were 13,400 shares available for a grant under the 2019 Incentive Plan.
During the year ended January 2, 2022, we issued options to purchase 15,000 shares of common stock under the “2019 Incentive Plan as stock awards to three directors of the Company in connection with their joining the board of directors. The options are exercisable at $5 per share through 2031. In the first half of 2022, we granted 220,750 options to employees and consultants to purchase shares at $2.50 per share.
Stock options granted to employees and directors vest over two to five years, in monthly or annual installments, as outlined in each agreement. Options expire ten years from the date of grant. Compensation expense equal to the fair value of the options at the grant date is recognized in general and administrative expense over the applicable service period. Compensation expense for the 26 weeks in 2022 was $73,400 and was zero in a similar period in 2021. Based on current estimates, we project that for current grants, approximately $230,000 in stock-based compensation expense will be recognized in future periods. We utilize the Black-Scholes option pricing model when determining the compensation cost associated with stock options issued using the following significant assumptions:
Information regarding our stock options is summarized below:
The Black-Scholes option-pricing model was used to estimate the fair value of the stock options with the following weighted-average assumptions for grants during the period ended July 3, 2022:
On February 9, 2022, the independent members of the Board of Directors comprising its Compensation Committee approved a proposal wherein, so long as the Company’s publicly traded warrants are outstanding, senior management of the Company will be granted 250,000 shares of common stock as an award upon the Company’s share price reaching $8.50 per share for 20 consecutive trading days. Final approval of the proposal is contingent upon shareholder approval of an increase in the number of shares available under the 2019 Incentive Plan, which is expected to be proposed at the next meeting of shareholders. |