As of March 31, 2022, the Company had four stock-based compensation plans, which are described more fully in Note 17 to the audited consolidated financial statements for the year ended December 31, 2021, contained in the Company’s Form 10-K.

During the three months ended March 31, 2022, the Company issued options to purchase 135,000 shares of common stock to certain of the Company’s employees. During the same period, the Company cancelled options to purchase 12,500 shares of common stock as a result of employee resignations.

The following summarizes the changes in common stock options for the three months ended March 31, 2022:


	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (In thousands)
Outstanding as of December 31, 2021		2,193,288		$	1.23
Granted		135,000		$	1.41
Exercised		(179,125	)	$	0.49
Forfeited		(12,500	)	$	1.13
Outstanding as of March 31, 2022		2,136,663		$	1.31		7.56	$	807

Options exercisable as of March 31, 2022		887,038		$	0.67		5.78	$	661

The Company recognized stock-based compensation expense related to common stock options of $106,000 for the three months ended March 31, 2022. As of March 31, 2022, there was approximately $1.3 million of unrecognized stock-based compensation expense related to unvested common stock options outstanding, which is expected to be recognized over a weighted average period of 3 years.

Restricted stock awards represent a right to receive shares of common stock at a future date determined in accordance with the participant’s award agreement. There is no exercise price and no monetary payment required for receipt of restricted stock awards or the shares issued in settlement of the award. Instead, consideration is furnished in the form of the participant’s services to the Company. Compensation cost for these awards is based on the fair value of the shares of common stock on the date of grant and recognized as compensation expense on a straight-line basis over the requisite service period.

On June 1, 2018, the Company granted 600,000 shares of Company restricted common stock in connection with the Addenda to the Employment Agreements of David Ludwig and Tom Ludwig. The shares are subject to certain restrictions on transfer and a right of repurchase over five years, ending May 31, 2023, and require a continued term of service to the Company. Stock-based compensation expense related to the restricted stock awards, calculated by using the grant date fair value of $0.43 per share, was $12,900 for the three months ended March 31, 2022. The unrecognized stock-based compensation expense as of March 31, 2022 was approximately $60,000.

On March 30, 2021, the Company and Scott West entered into a Separation Agreement and General Release (the “Separation Agreement”). Under the terms of the Separation Agreement, Mr. West’s separation from the Company was effective on March 31, 2021. On April 8, 2021, the Company granted 25,000 shares of the Company’s restricted common stock, which will be forfeited to the Company during the two years following the effective date of the Separation Agreement in the event Mr. West breaches the terms of the Separation Agreement. In addition, the Separation Agreement provides for customary mutual releases by the Company and Mr. West, and the Separation Agreement includes confidentiality, non-disparagement and other obligations. The full amount of the restricted common stock was expensed as of March 31, 2022.

On March 19, 2019, the Company entered into a Warrant Agreement (the “Warrant Agreement”) with Napier Park Industrial Asset Acquisition LP, a Delaware limited partnership (“Napier Park”). Pursuant to the Warrant Agreement, Napier Park is entitled to receive warrants to acquire shares of Company common stock with a fair market value of $71,368 for each $500,000 increment in excess of $2.5 million of Cumulative Gross Profit (as defined in the Warrant Agreement) achieved prior to December 19, 2022 to which the Company may become entitled in connection with its equity joint venture with Napier Park. During the year ended December 31, 2021 and the three months ended March 31, 2022, Napier Park did not receive any warrants.