STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2023

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

5. STOCK-BASED COMPENSATION

Stock-based compensation awards consist of stock options, restricted stock units and bonus shares issued under the Company’s equity incentive plans, which include the 2013 Omnibus Incentive Plan (the “2013 Plan”), and the Employment Inducement Incentive Award Plan (the “Inducement Plan”).

On May 10, 2023, the Company’s stockholders approved an amendment to the 2013 Plan to increase the authorized number of shares of common stock available and reserved for issuance under the 2013 Plan by 1,500,000 shares.

Under the 2013 Plan, the Company may grant awards of stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards and cash bonus awards to eligible persons. Equity awards under the

2013 Plan are granted from time to time at the discretion of the Compensation Committee of the Board (the “Committee”), with vesting periods and other terms as determined by the Committee with a maximum term of 10 years. The 2013 Plan is administered by the Committee, which can delegate the administration to the Board, other committees or to such other officers and employees of the Company as designated by the Committee and permitted by the 2013 Plan. As of June 30, 2023, 614,534 shares were available for future issuances under the 2013 Plan.  

The Inducement Plan provides for the grant of equity-based awards, including restricted stock units, restricted stock, performance shares and performance units. Under the Inducement Plan, the Company may grant equity awards for the sole purpose of recruiting and hiring new employees.  As of June 30, 2023, 114,429 shares were available for future issuances under the Inducement Plan.

The Company has elected to account for forfeitures as they occur rather than estimating forfeitures.  Expense associated with an award that is forfeited prior to vesting will be reversed accordingly.  For the three and six months ended June 30, 2023 the Company recorded stock-based compensation expense of $0.3 million and $0.1 million, respectively, compared to $0.3 million and $0.4 million, respectively, for the same periods in 2022.  Stock compensation expense is recorded in general and administrative expenses.

Stock Options

Stock options are valued using the Black-Scholes option pricing model on the date of grant. The Company accounts for forfeitures upon occurrence.

The following table summarize stock options outstanding and changes for the six months ended June 30, 2023:

	June 30, 2023			June 30, 2022
		Weighted			Weighted
	Number of	Average		Number of	Average
	Stock	Exercise		Stock	Exercise
	Options	Price		Options	Price
Stock options outstanding at beginning of period	356,296	$	5.06	277,576	$	6.18
Granted	117,637		1.01	78,720		1.09
Canceled or forfeited	(49,107)		16.07	—		—
Stock options outstanding at end of period	424,826		2.66	356,296		5.06
Stock options exercisable at end of period	307,189	$	3.29	277,576	$	6.18

All options outstanding for the six months ended June 30, 2023, were issued under the 2013 Plan.  The weighted average remaining term for stock options outstanding as of June 30, 2023, is approximately 8.3 years.

As of June 30, 2023, the Company had less than $0.1 million of unrecognized compensation costs related to non-vested stock options that will be recognized over a period of approximately one year.

Restricted Stock Units

Time-based and performance-based RSUs are valued using the closing share price of the Company’s common stock on the date of grant. The final number of shares issued under performance-based RSUs is generally based on the Company’s prior year performance as determined by the Committee at each vesting date, and the valuation of such awards assumes full satisfaction of all performance criteria.  The Company accounts for forfeitures upon occurrence.

The following table summarizes RSU activity for the six months ended June 30, 2023 and 2022:

	June 30,			June 30,
	2023			2022
		Weighted-			Weighted-
		Average			Average
	Number of	Grant Date		Number of	Grant Date
	RSUs	Fair Value		RSUs	Fair Value
Unvested RSUs at beginning of period	1,207,872	$	1.40	385,004	$	3.18
Granted	1,461,812		1.00	1,148,003		1.16
Forfeited/Expired	(432,587)		1.67	(122,692)		3.09
Vested	(229,110)		1.25	(130,793)		2.61
Unvested RSUs at end of period	2,007,987	$	1.05	1,279,522	$	1.43

As of June 30, 2023, the Company had $1.2 million of unrecognized compensation costs related to non-vested restricted stock units that will be recognized over a period of approximately 2.5 years.