XML 27 R17.htm IDEA: XBRL DOCUMENT

ShareBased Compensation

6 Months Ended

Jun. 30, 2020

Note 10. Share-Based Compensation

Equity Plans

On June 20, 2017, the stockholders of the Company approved the ChromaDex Corporation 2017 Equity Incentive Plan (the "2017 Plan"). The Company's Board of Directors amended the 2017 Plan in January 2018 and the stockholders of the Company approved amendments to the 2017 Plan in June 2018 and June 2020. The 2017 Plan is the successor to the ChromaDex Corporation Second Amended and Restated 2007 Equity Incentive Plan (the "2007 Plan"). As of June 30, 2020, under the 2017 Plan, the Company is authorized to issue shares subject to awards that total no more than the sum of (i) 14,500,000 new shares, (ii) approximately 384,000 unallocated shares remaining available for the grant of new awards under the 2007 Plan, (iii) any returning shares from the 2007 Plan or the 2017 Plan, such as forfeited, cancelled, or expired shares and (iv) 500,000 shares pursuant to an inducement award. The remaining number of shares available for issuance under the 2017 Plan totaled approximately 6.9 million shares at June 30, 2020.

General Vesting Conditions

The stock option awards generally vest ratably over a three-year period following grant date after a passage of time. However, some stock option awards are market or performance based and vest based on certain triggering events established by the Compensation Committee of the Board of Directors.

The fair value of the Company’s stock options that are not market based was estimated at the date of grant using the Black-Scholes option pricing model. The table below outlines the weighted average assumptions for options granted during the six months ended June 30, 2020.

Six months Ended June 30, 2020
Expected term	6 years
Expected volatility		66	%
Risk-free rate		1	%
Expected dividends		0	%

Service Period Based Stock Options

The following table summarizes activity of service period-based stock options at June 30, 2020 and changes during the six months then ended (in thousands except per-share data and remaining contractual term):

				Weighted Average
						Remaining				Aggregate
	Number of			Exercise		Contractual		Fair		Intrinsic
	Shares			Price		Term (Years)		Value		Value
Outstanding at Dec. 31, 2019		9,509		$	3.86		6.9

Options Granted		2,133			3.62		10.0	$	2.13
Options Exercised		(592	)		3.77					$	719
Options Expired		(239	)		4.70
Options Forfeited		(518	)		3.44
Outstanding at Jun. 30, 2020		10,293		$	3.82		7.1			$	9,322	*

Exercisable at Jun. 30, 2020		6,126		$	3.76		5.7			$	6,252	*

______________

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $4.59, which is the closing price of the Company’s stock on the last day of business for the period ended June 30, 2020.

Performance Based Stock Options

The Company also grants stock option awards that are performance based and vest based on the achievement of certain criteria established from time to time by the Compensation Committee of the Board of Directors. If these performance criteria are not met, the compensation expenses are not recognized and the expenses that have been recognized will be reversed.

The following table summarizes performance based stock options activity at June 30, 2020 and changes during the six months then ended (in thousands except per share data and remaining contractual term):

				Weighted Average
						Remaining				Aggregate
	Number of			Exercise		Contractual		Fair		Intrinsic
	Shares			Price		Term (Years)		Value		Value
Outstanding at Dec. 31, 2019		42		$	1.89		3.1

Options Granted		164			4.34		4.0	$	2.26
Options Exercised		(42	)		1.89					$	100
Options Forfeited		-			-
Outstanding at Jun. 30, 2020		164		$	4.34		3.6			$	41	*

Exercisable at Jun. 30, 2020		-			-		-				-

_________________

Total Remaining Unamortized Compensation for Stock Options

As of June 30, 2020, there was approximately $8.4 million of total unrecognized compensation expense related to non-vested share-based compensation arrangements granted under the plans for employee stock options.That cost is expected to be recognized over a weighted average period of 2 years.

Share-Based Compensation

Share-based compensation expenses were as follows:

	Three months ending				Six months ending
(In thousands)	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Share-based compensation expense
Cost of sales	$	42	$	34	$	75	$	60
Sales and marketing		242		144		474		263
Research and development		134		127		272		250
General and administrative		1,293		1,454		2,763		3,215

Total	$	1,711	$	1,759	$	3,584	$	3,788