(a)

Incremental shares from the assumed exercise of INDUS stock options are not included in periods where the inclusion of such shares would be anti-dilutive. The incremental shares from the assumed exercise of stock options and the Warrant for the 2021 third quarter and 2020 third quarter would have been 175,000 and 72,000, respectively. The incremental shares from the assumed exercise of the Warrant and stock options for the 2021 nine month period and 2020 nine month period would have been 150,000 and 62,000, respectively.

Equity Compensation Plans

Stock Options

There were no stock options granted in the 2021 nine month period. The following options were granted by INDUS in the 2020 nine month period under the INDUS Realty, LLC 2020 Incentive Award Plan (the “2020 Incentive Award Plan”) and the INDUS Realty Trust, Inc. 2009 Stock Option Plan:


		Fair Value per
	Number of	Option at
	Shares	Grant Date
Non-employee directors	111,258	$	11.00 - 14.17


Number of option holders at September 30, 2021		18

As of September 30, 2021, the unrecognized compensation expense related to unvested stock options that will be recognized during future periods is as follows:


Balance of 2021	$	99
2022	$	372
2023	$	231
2024	$	111
2025	$	15

A summary of INDUS’s stock option activity is as follows:


	For the Nine Months Ended
	Sep. 30, 2021			Sep. 30, 2020
	Number of		Weighted Avg.	Number of		Weighted Avg.
	Shares		Exercise Price	Shares		Exercise Price
Outstanding at beginning of period	246,150	$	36.06	189,822	$	28.23
Adjustment for stock dividend	5,413	$	34.29	—	$	—
Granted	—	$	—	111,258	$	45.72
Exercised	(15,422)	$	26.37	(44,900)	$	28.73
Forfeited	(1,067)	$	37.49	—	$	—
Outstanding at end of period	235,074	$	35.85	256,180	$	35.74


				Weighted Avg.
				Remaining
Range of Exercise Prices for	Outstanding at	Weighted Avg.		Contractual Life	Total Intrinsic
Outstanding Options	Sep. 30, 2021	Exercise Price		(in years)	Value
$23.00 - $28.00	96,124	$	26.24	4.5	$	4,216
$28.00 - $32.00	14,073	$	29.84	3.8		567
$32.00 - $47.00	124,877	$	43.93	8.2		3,267
	235,074	$	35.85	6.4	$	8,050

Vested options	125,395	$	27.92	4.7	$	5,289

Restricted Stock Units

Under the 2020 Incentive Award Plan, INDUS granted the following restricted stock units of Common Stock (“RSUs”) in the 2021 nine month period;


	Time-based vesting			Performance-based vesting
		Fair Value per			Fair Value per
	Number of	Unit at		Number of	Unit at
	Units	Grant Date		Shares	Grant Date
Employees	8,508	$	63.15	8,508	$	79.33
Non-employee directors	4,682	$	67.28	-
	13,190			8,508

The time-based vesting RSUs were granted to employees on February 1, 2021 and, subject to the recipient’s continued employment, will vest over three years in equal installments on February 1 of each year beginning in 2022. The performance-based vesting RSUs granted in fiscal 2021 will vest after a period of three years and be measured over the three-year period on pre-established goals. The time-based vesting RSUs granted to non-employee directors were granted on June 17, 2021 and will vest in one year. The holders of RSUs will receive credit for dividends, but do not have voting rights. The RSUs may not be sold, assigned, transferred, pledged or otherwise disposed of and are subject to risk of forfeiture prior to the expiration of the applicable vesting period.

As of September 30, 2021, the unrecognized compensation expense related to RSUs that will be recognized during future periods is as follows:


Balance of 2021	$	206
2022	$	503
2023	$	270
2024	$	22

Compensation expense and related tax benefits for stock options and RSUs were as follows:


	For the Three Months Ended				For the Nine Months Ended
	Sep. 30, 2021		Sep. 30, 2020		Sep. 30, 2021		Sep. 30, 2020
Compensation expense	$	305	$	125	$	810	$	407

Related tax benefit	$	—	$	26	$	—	$	88

Warrant

As of September 30, 2021, exercise of the Warrant would result in the issuance 515,747 shares of Common Stock at a price of $58.70 per share. The Warrant expires on August 24, 2023. As the Warrant contained a cash surrender provision, it was recorded at its fair value and classified as a liability on the Company’s consolidated balance sheet at the time it was issued, with changes in its fair value included in the Company’s consolidated statement of operations. On August 24, 2021, upon the expiration of the cash settlement provision of the Warrant, the fair value of the Warrant at that time, $12,192, was reclassified from a liability into stockholders’ equity.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive loss, net of tax, comprised of unrealized gains on cash flow hedges is as follows:


	For the Nine Months Ended
	Sep. 30, 2021			Sep. 30, 2020
Balance at beginning of period	$	(7,855)	$	(2,540)
Other comprehensive gain (loss) before reclassifications		2,083		(6,100)
Amounts reclassified		1,504		837
Net activity for other comprehensive gain (loss)		3,587		(5,263)
Balance at end of period	$	(4,268)	$	(7,803)

Changes in accumulated other comprehensive income (loss), net are as follows:


	For the Three Months Ended
	Sep. 30, 2021						Sep. 30, 2020
			Tax						Tax
			(Expense)		Net-of				(Expense)		Net-of
	Pre-Tax		Benefit		Tax		Pre-Tax		Benefit		Tax
Reclassification included in net loss:
Loss on cash flow hedges (interest expense)	$	510	$	—	$	510	$	509	$	(106)	$	403
Change in other comprehensive income:
Increase (decrease) in fair value of cash flow hedges		114		—		114		(25)		4		(21)
Other comprehensive income	$	624	$	—	$	624	$	484	$	(102)	$	382


	For the Nine Months Ended
	Sep. 30, 2021						Sep. 30, 2020
			Tax						Tax
			(Expense)		Net-of				(Expense)		Net-of
	Pre-Tax		Benefit		Tax		Pre-Tax		Benefit		Tax
Reclassification included in net loss:
Loss on cash flow hedges (interest expense)	$	1,504	$	—	$	1,504	$	1,058	$	(221)	$	837
Change in other comprehensive income (loss):
Increase (decrease) in fair value of cash flow hedges		2,083		—		2,083		(7,665)		1,565		(6,100)
Other comprehensive income (loss)	$	3,587	$	—	$	3,587	$	(6,607)	$	1,344	$	(5,263)

Dividends

On January 13, 2021, INDUS declared a special dividend to distribute the E&P Distribution, which was based on the Company’s estimated taxable income through December 31, 2020. The E&P Distribution was made on March 8, 2021, in the amount of $11,250 or $1.99 per share to holders of record as of January 22, 2021. The E&P Distribution was paid in a combination of cash and shares of the Company’s Common Stock. The cash portion of the E&P Distribution paid to stockholders was $3,404 and 125,212 shares of Common Stock were issued.

INDUS declared cash dividends of $0.15 per share on its Common Stock on September 1, 2021, and May 7, 2021. INDUS paid $1,159 and $1,158, respectively, for these dividends on September 30, 2021, and June 30, 2021. INDUS did not declare or pay a cash dividend in the 2020 nine month period.

Treasury Stock

The Company’s 617,816 shares of treasury stock were retired upon the reincorporation into Maryland on December 30, 2020. The treasury stock balance was offset by reductions to common stock and additional paid-in capital. Total stockholders’ equity was not affected by the retirement of treasury stock.