Share-based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-based Compensation

19. Share-based Compensation

During the years ended December 31, 2021, 2020 and 2019, the share-based compensation expense were $5,789, $315 and $821, respectively. The following table summarizes the consolidated share-based compensation expense, by type of awards: 

	For the Years Ended
	December 31,		December 31,		December 31,
	2021		2020		2019
Employee stock options	$	4,593	$	315	$	305
Restricted share grants		1,196		–		516
Total share-based compensation expense	$	5,789	$	315	$	821

The following table summarizes the consolidated share-based compensation by line items: 

	For the Years Ended
	December 31, 2021		December 31, 2020		December 31, 2019
General and administrative	$	5,771	$	296	$	768
Sales, marketing and customer service		18		19		53
Total share-based compensation expense, net of nil income taxes	$	5,789	$	315	$	821

As share-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Determining Fair Value

Valuation and Amortization Method —The Group estimates the fair value of service-based and performance-based stock options granted using the Black-Scholes option-pricing formula. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. In the case of performance-based stock options, amortization does not begin until it is determined that meeting the performance criteria is probable. Service-based and performance-based options typically have a ten-year life from date of grant and vesting periods of four years.

Expected Term —The Group’s expected term represents the period that the Group’s share-based awards are expected to be outstanding. For awards granted subject only to service vesting requirements, the Group utilizes the simplified method for estimating the expected term of the share-based award, instead of historical exercise data. For its performance-based awards, the Group has determined the expected term life to be 6.25 years based on contractual life and the seniority of the recipient.

Expected Volatility —The Group uses historical volatility of the price of its ordinary shares to calculate the volatility for its granted options.

Expected Dividend —The Group has never paid dividends on its ordinary shares and currently does not intend to do so, and accordingly, the dividend yield percentage is zero for all periods.

Risk-Free Interest Rate — The Group bases the risk-free interest rate used in the Black-Scholes valuation model upon the implied yield curve currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term used as the assumption in the model.

Assumptions used in the determination of the fair value of share-based payment awards using the Black-Scholes model for stock option grants were as follows:

(a)       2015 Equity Incentive Plan 

	For the Years Ended
	December 31, 2021		December 31, 2020		December 31, 2019
Expected term		6.25		6.25		6.25
Risk-free interest rate		0.11%-0.16%		0.07%-0.09%		1.55%-2.51%
Expected volatility		713%-719%		537%-762%		575%-605%
Expected dividend yield		0%		0%		0%

(b)       2021 Omnibus Equity Incentive Plan

	For the Years Ended
	December 31, 2021		December 31, 2020		December 31, 2019
Expected term		1-3 years		–		–
Risk-free interest rate		1.52%		–		–
Expected volatility		64.4% to 69.0%		–		–
Expected dividend yield		0%		–		–

(c)       2021 SolarJuice Equity Incentive Plan

	For the Years Ended
	December 31, 2021		December 31, 2020		December 31, 2019
Expected term		3 years		–		–
Risk-free interest rate		1.52%		–		–
Expected volatility		45.3%		–		–
Expected dividend yield		0%		–		–

Equity Incentive Plan

(a)       2015 Equity Incentive Plan

On May 8, 2015, the Group adopted the 2015 Equity Incentive Plan (the “2015 Plan”) which permits the Group to grant stock options to directors, officers or employees of the Group or others to purchase shares of Ordinary Stock of the Group through awards of incentive and nonqualified stock options (“Option”), Restricted Stock or Unrestricted Stock and stock appreciation rights (“SARs”) which was approved by the shareholders. The total number of shares which may be issued under the 2015 Plan is 9% of the number of outstanding and issued ordinary shares of the Group. The Option Price per Share shall be determined by the compensation committee of the Board (“Compensation Committee”), unless expressly approved by the Compensation Committee, shall not be less than 100% of the fair market value of the shares on the date an Option is granted. In the year ended December 31, 2021, the Group granted 969,000 options under the 2015 Plan with weighted-average grant-date fair value of $6.93 per share.

During the years ended December 31, 2021, 2020 and 2019, the Board of Directors approved the grants of Restricted Stock Units (“RSUs”) to core management members and other management, pursuant to the terms of the 2015 Plan. The total number of RSUs granted were 184,000, nil and 107,000 shares, respectively. The RSUs are 100% vested at the grant date for all the grants. The Group used the market price of its shares at grant date as the fair value of the RSUs in calculating the share based compensation expense.

Total intrinsic value of options exercised for the years ended December 31, 2021 and 2020 under the 2015 Plan were $1 and $520, respectively.

The following table summarizes the Group’s stock option activities: 

	Shares			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value ($000)
Outstanding as of January 1, 2019		260,200			212		8.59	$	–
Granted		65,000			3
Exercised		–			–
Forfeited/expired		(70,000	)		4
Outstanding as of December 31, 2019		255,200			19		6.70	$	–
Granted		300,000			9
Exercised		(109,500	)		4
Forfeited/expired		(56,800	)		27
Outstanding as of December 31, 2020		388,900			11		7.52	$	486
Granted		969,000			7
Exercised		(25,000	)		4
Forfeited/expired		(117,000	)		10
Outstanding as of December 31, 2021		1,215,900			8		9.04	$	82
Exercisable as of December 31, 2021		113,900			16		7.45	$	27
Non-vested as of December 31, 2021		1,102,000			7		9.21	$	55

The following table presents the exercise price and remaining life information for options exercisable at December 31, 2021: 

Range of exercise price	Shares Exercisable		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Aggregate Intrinsic ($000)
$118 - $172		1,000		3.17	$	172.00		–
$40 - $117		12,600		4.41	$	62.04		–
$3 - $39		87,800		7.88	$	9.23		1
$1-$2		12,500		7.85	$	1.61		26
		113,900						27

The following table presents a summary of the restricted stock awards: 

	Number of Shares			Weighted Average Grant-Date Fair Value
Outstanding at January 1, 2019		1,250		$	185
Granted		107,000		$	3
Vested		(108,250	)	$	5
Restricted stock units at December 31, 2019		–			–
Granted		–			–
Vested		–			–
Restricted stock units at December 31, 2020		–			–
Granted		184,000		$	6.34
Vested		(184,000	)	$	6.34
Restricted stock units at December 31, 2021		–			–

(b)       2021 Equity Incentive Plan of Phoenix

On January 24, 2021, Phoenix has adopted the 2021 Equity Incentive Plan (the “2021 Plan”) which permits the Phoenix to grant stock options to directors, officers or employees of Phoenix or others to purchase shares of common stock of Phoenix through awards of incentive and nonqualified stock options (“Option”). The total number of shares may be issued under the 2021 Plan is 9% of the number of issued and outstanding common stocks of Phoenix. During the year ended December 31, 2021, 2,040,500 options were granted to a group of managements and employees of Phoenix, which are subject to an annual vesting schedule that vests 25% of granted options over the next four years. The exercise price is $1.72 per share and the weighted average option fair value as of the grant day is $0.44 per share.

The following table summarizes the Phoenix’s stock option activities: 

	Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value ($000)
Outstanding as of December 31, 2020		–		–		–	$	–
Granted		2,040,500	$	1.72
Exercised		–
Forfeited/expired		(354,000)	$	1.72
Outstanding as of December 31, 2021		1,686,500	$	1.72		9.45	$	3,204
Exercisable as of December 31, 2021		–
Non-vested as of December 31, 2021		1,686,500	$	1.72		9.45	$	3,204

(c)       2021 SolarJuice Equity Incentive Plan

On May 17, 2021, options to purchase 6,117,160 ordinary shares of SJ Cayman at an exercise price of $0.48 per share were granted to employees of SJ Group, which are subject to a vesting schedule that vests 25% of granted options per year over the next four years. The fair value of the options as of the grant day is $0.43 per share and the purpose for the grant is for compensation and incentive to these employees for their service to SJ Group.

The following table summarizes the SJ Group’s stock option activities:

	Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value ($000)
Outstanding as of December 31, 2020		–		–		–	$	–
Granted		6,117,160	$	0.48
Exercised		–
Forfeited/expired		(1,652,860)	$	0.48
Outstanding as of December 31, 2021		4,464,300	$	0.48		9.44	$	1,607
Vested and exercisable as of December 31, 2021		–
Non-vested as of December 31, 2021		4,464,300	$	0.48		9.44	$	1,607

Other Stock-based Compensation

On January 24, 2021, an option to purchase 1,050,000 fully vested common stocks of Phoenix at an exercise price of $1.29 per share was granted to Mr. Xiaofeng Denton Peng, the chairman of the board of directors of the Group. The grant of options is a special one-time award in recognition of his work done related to the acquisition. The options are valued at $0.04 per share using the weighted average of the values under guideline public company method and transaction method, and apply a discount for marketability to come up with the fair value.

On February 28, 2021, options to purchase 6,000,000 fully vested ordinary shares of SJ Cayman at an exercise price of $0.48 per share were granted to Mr. Xiaofeng Denton Peng, the chairman of the board of directors of the Group. The option fair value as of the grant day is $0.43 per share and the purpose for the grant is in recognition of his past service for SJ Cayman and its subsidiaries.

There were no changes to the contractual life of any fully vested options during the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, there were $4,221 of unrecognized share-based compensation expenses related to the share options granted. The expenses are expected to be recognized over a weighted-average period of 3.3 years.