Stock Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Note 10 - Stock Based Compensation

2019 Equity Incentive Plan

On December 19, 2019, the Oblong, Inc. 2019 Equity Incentive Plan (the “2019 Plan”) was approved by the Company’s stockholders at the Company’s 2019 Annual Meeting of Stockholders. The 2019 Plan is an omnibus equity incentive plan pursuant to which the Company may grant equity and cash incentive awards to certain key service providers of the Company and its subsidiaries. The 2019 Plan replaces the Glowpoint, Inc. 2014 Equity Incentive Plan (the “Prior Plan”), which was adopted by the Company’s Board of Directors on April 22, 2014, and subsequently approved by the Company’s stockholders. Following approval of the 2019 Plan, the Company terminated the Prior Plan and may no longer make grants under the Prior Plan; however, any outstanding equity awards granted under the Prior Plan will continue to be governed by the terms of the Prior Plan. As of September 30, 2020, no restricted stock units were outstanding under the Prior Plan. As of September 30, 2020, the share pool available for new grants under the 2019 Plan is 3,021,000, which is equal to the sum of (i) 2,600,000 shares of the Company’s Common Stock and (ii) the 421,000 shares of the Company’s Common Stock that remained available

for issuance under the Prior Plan. No equity awards were granted under the 2019 Plan during the nine months ended September 30, 2020.

2007 Stock Incentive Plan

In May 2014, the Board terminated the Company’s 2007 Stock Incentive Plan (the “2007 Plan”). Notwithstanding the termination of the 2007 Plan, outstanding awards under the 2007 Plan will remain in effect in accordance with their terms. As of September 30, 2020, options to purchase a total of 107,500 shares of common stock and 627 shares of restricted stock were outstanding under the 2007 Plan. No shares are available for issuance under the 2007 Plan.

Stock Options

For the nine months ended September 30, 2020 and the year ended December 31, 2019, other than the options granted to certain former holders of options to purchase shares of Oblong Industries’ common stock, for which no stock-based compensation was recorded as discussed below, no stock options were granted.

A summary of stock options expired and forfeited under our plans and options outstanding as of, and changes made during, the nine months ended September 30, 2020 and the year ended December 31, 2019 is presented below:


	Outstanding and Exerciseable
	Number of Options	Weighted Average Exercise Price
Options outstanding, December 31, 2018	118,003	$	19.90
Exchanged for Oblong Industries stock options	107,845	4.92

Expired	(440)	16.48
Forfeited	(10,063)	23.20
Options outstanding, December 31, 2019	215,345	12.27


Expired	(107,845)	4.92

Options outstanding and exercisable, September 30, 2020	107,500	$	19.64

Additional information as of September 30, 2020 is as follows:


	Outstanding and Exercisable
Range of price	Number of Options	Weighted Average Remaining Contractual Life (In Years)	Weighted Average Exercise Price
$0.00 – $10.00	2,500	2.70	$	9.00
$10.01 – $20.00	97,500	2.31	19.32
$20.01 – $30.00	2,500	1.68	21.80
$30.01 – $40.00	5,000	1.45	30.20

	107,500	2.26	$	19.64

In connection with the Acquisition, all options to purchase shares of Oblong Industries’ common stock held by previously terminated employees of Oblong Industries were assumed by the Company and deemed, in the aggregate, to constitute options to acquire a total of 107,845 shares of the Company’s common stock, at a volume weighted average exercise price of $4.92 per share and a remaining exercise period of one year. These options all expired on September 30, 2020. No stock-based compensation expense was recorded in the three and nine months ended September 30, 2020 for these stock options as the value for these options was recorded as part of the consideration of the Acquisition given that these options were issued to terminated employees.

The intrinsic value of vested options, unvested options and exercised options were not significant for all periods presented. There was no remaining unrecognized stock-based compensation expense for options at September 30, 2020 as all options were vested.

Restricted Stock Awards

A summary of restricted stock granted, vested and unvested outstanding as of, and changes made during, the nine months ended September 30, 2020 and the year ended December 31, 2019, is presented below:


	Restricted Shares	Weighted Average Grant Date Price
Unvested restricted stock outstanding, December 31, 2018	11,320	$	14.88
Granted	—	—
Vested	(1,372)	15.72
Forfeited	(9,321)	14.70
Unvested restricted stock outstanding, December 31, 2019	627	15.80



Unvested restricted stock outstanding, September 30, 2020	627	$	15.80

Stock-based compensation expense relating to restricted stock awards is allocated as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019



General and administrative	—		—		—		3
	$	—	$	—	$	—	$	3

The unvested restricted stock award as of September 30, 2020 was issued in 2014 and vests over the lesser of ten years, a change in control, or separation from the company. Due to the variability of the vesting, the expense was amortized over an average service period of five years; therefore, there is no unrecognized stock-based compensation expense for restricted stock awards for the period ended September 30, 2020.

Restricted Stock Units

A summary of restricted stock units (“RSUs”) granted, vested, forfeited and unvested outstanding as of, and changes made during, the nine months ended September 30, 2020 and the year ended December 31, 2019, is presented below:


	Restricted Stock Units	Weighted Average Grant Price
Unvested restricted stock units outstanding, December 31, 2018	503,518	$	1.94
Granted	55,479	1.30
Vested	(114,505)	3.05
Forfeited	(421,158)	1.54
Unvested restricted stock units outstanding, December 31, 2019	23,334	2.20

Vested	(23,334)	2.20

Unvested restricted stock units outstanding, September 30, 2020	—	$	—

As of September 30, 2020, 28,904 vested RSU’s remain outstanding as shares of common stock have not yet been delivered for these units in accordance with the terms of the RSU’s.

Stock-based compensation expense relating to restricted stock units is allocated as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Cost of revenue	$	—	$	2	$	—	$	10
Research and development	—		2		—		11
Sales and marketing	—		—		—		—
General and administrative	—		10		6		43
	$	—	$	14	$	6	$	64

There was no remaining unrecognized stock-based compensation expense for restricted stock units at September 30, 2020.

There was no tax benefit recognized for stock-based compensation expense for the nine months ended September 30, 2020 or the year ended December 31, 2019. No compensation costs were capitalized as part of the cost of an asset during the periods presented.

Restricted Series D Preferred Stock

In connection with the Acquisition, all options to purchase shares of Oblong Industries’ common stock held by existing employees of Oblong Industries were canceled and exchanged for an aggregate of 49,967 shares of Restricted Series D Preferred Stock, which are subject to vesting over a two-year period following the Closing Date.

Stock-based compensation expense relating to Restricted Series D Preferred Stock is allocated as follows (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,		Three and Nine Months Ended September 30,
	2020		2020		2019

Research and development	$	11	$	39	$	—
Sales and marketing	7		17		—
General and administrative	10		27		—
	$	28	$	83	$	—

During the three and nine months ended September 30, 2020, 1,086 and 32,891 shares of Restricted Series D Preferred Stock were forfeited, respectively. As of September 30, 2020, 5,123 shares of Restricted Series D Preferred Stock remain outstanding. The remaining unrecognized stock-based compensation expense for Restricted Series D Preferred Stock at September 30, 2020 was $57,000, and will be recognized over a weighted average period of 1 year.