SHARE BASED COMPENSATION

6 Months Ended

Jun. 30, 2022

SHARE BASED COMPENSATION

Share-based Compensation

11. SHARE-BASED COMPENSATION

During 2019 the Company’s Board of Directors adopted the 2019 Stock and Incentive Plan (the “Plan”), which was amended in April 2020 and March 2021. The Plan permits the issuance of stock options, stock appreciation rights, stock awards, share units, performance shares, performance units and other stock-based awards, and, as of June 30, 2022, 13.2 million shares have been authorized to be issued under the Plan and 2.5 million are available for future grants. The Plan provides for the grant of options as either non-statutory stock options or incentive stock options and restricted stock units to employees, officers, directors, and consultants of the Company to attract and retain persons of ability to perform services for the Company and to reward such individuals who contribute to the achievement by the Company of its economic objectives. The awards granted generally vest in 25% increments over a four-year period and option awards expire 6 years from grant date.

The Plan is administered by the Board or a committee appointed by the Board, which determines the persons to whom the awards will be granted, the type of awards to be granted, the number of awards to be granted, and the specific terms of each grant, including the vesting thereof, subject to the provisions of the Plan.

During the three and six months ended June 30, 2022 and 2021, the Company granted shares to certain employees as compensation for services. These shares were accounted for in accordance with ASC 718 - Compensation - Stock Compensation. The Company amortizes awards over the service period and until awards are fully vested.

For the three and six months ended June 30, 2022 and 2021, share-based compensation expense was as follows:

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
(in thousands)	2022		2021		2022		2021
Cost of goods sold	$	-	$	-	$	-	$	-
General and administrative expense		157		338		318		625
Total share-based compensation	$	157	$	338	$	318	$	625

The following table summarizes the status of stock option grants and unvested awards at and for the six months ended June 30, 2022:

						Weighted-Average
	Stock			Weighted-Average		Remaining		Aggregate
(in thousands except per share amounts)	Options			Exercise Price		Contractual Life		Intrinsic Value
Outstanding-December 31, 2021		6,598		$	0.99		4.3	$	-
Granted		3,240			0.31		-		-
Exercised		-			-		-		-
Cancelled		(1,127	)		0.99		-		-
Outstanding-June 30, 2022		8,711		$	0.72		4.4		-
Exercisable-June 30, 2022		3,130		$	1.02		1.9	$	-
Vested and expected to vest-June 30, 2022		8,711		$	0.72		4.4	$	-

The weighted-average fair value of options granted during the three and six months ended June 30, 2022, estimated as of the grant date were $0.31 and $0.31, respectively. As of June 30, 2022, there was $779 of total unrecognized compensation cost related to non-vested options, which is expected to be recognized over a remaining weighted-average vesting period of 2.2 years.

The following table summarizes the status of restricted stock unit (“RSU”) grants and unvested awards at and for the six months ended June 30, 2022:

				Weighted-Average
(in thousands except per share amounts)	RSUs			Fair Value
Outstanding-December 31, 2021		642		$	1.18
Granted		-			-
Vested		(125	)		1.49
Cancelled		(30	)		1.11
Outstanding-June 30, 2022		487		$	1.11

As of June 30, 2022, there was $271 of total unrecognized compensation cost related to non-vested restricted stock units, which is expected to be recognized over a remaining weighted-average vesting period of 18 months.

The fair value of the stock options and RSUs granted were determined using the Black-Scholes option-pricing model with the following weighted average assumptions at the time of grant.

Stock Options

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2022			2021			2022			2021
Expected volatility		50	%		50	%		50	%		50	%
Dividend yield		0	%		0	%		0	%		0	%
Risk-free interest rate		1.0	%		1.1	%		1.0	%		0.9	%
Expected term in years		4.50			4.25			4.5			4.25

RSUs

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2022			2021			2022			2021
Expected volatility		50	%		50	%		50	%		50	%
Dividend yield		0	%		0	%		0	%		0	%
Risk-free interest rate		0.7	%		0.9	%		0.7	%		0.9	%
Expected term in years		1.00			0.74			1.00			0.74