Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Equity incentive plans. In February 2011, the Company’s stockholders approved the Gevo, Inc. 2010 Stock Incentive Plan (as amended and restated to date, the "2010 Plan"), and the Employee Stock Purchase Plan (the "ESPP").

The 2010 Plan provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units and other equity awards to employees and directors of the Company. In June 2021, upon approval of stockholders at the 2021 Annual Meeting of Stockholders, the 2010 Plan was amended and restated, which increased the number of shares of common stock reserved for issuance under the 2010 Plan to 22,980,074 shares. On September 30, 2022, 4,113,735 shares remained available for awards under the 2010 Plan.

Stock Appreciation Rights. The Company granted 67,739 stock appreciation rights valued at an aggregate of $0.1 million on the respective grant dates during the year ended December 31, 2018, with exercise prices ranging from $3.45 to $138.00 per share, expiring in 2028. The vesting period for stock appreciation rights granted is based on a service period. The stock appreciation rights have the potential to be cash settled and are therefore classified as a liability and remeasured at each reporting period based on the price of the Company's common stock.

Stock-based compensation expense. The Company records stock-based compensation expense during the requisite service period for stock-based payment awards granted to employees and non-employees. Our stock-based compensation is classified as either an equity award or a liability award in accordance with generally accepted accounting principles. The fair value of an equity-classified award is determined at the grant date and is amortized on a straight-line basis over the vesting life of the award. The fair-value of a liability-classified award is determined on a quarterly basis through the final vesting date and is amortized based on the current fair value of the award and the percentage of vesting period incurred to date.

The following table sets forth the Company’s stock-based compensation expense for the periods indicated (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Equity Classified Awards
Cost of goods sold	$	208	$	188	$	599	$	188
Selling, general and administrative	3,910		1,419		10,992		2,593
Other	243		273		1,034		519
Total equity classified awards	4,361		1,880		12,625		3,300
Liability Classified Awards
Selling, general and administrative	(267)		2,366		(460)		2,374
Other	126		(40)		—		149
Total liability classified awards	(141)		2,326		(460)		2,523
Total stock-based compensation	$	4,220	$	4,206	$	12,165	$	5,823

Stock option award activity. Stock option activity under the Company’s stock incentive plans and changes during the nine months ended September 30, 2022, were as follows:


	Number of Options	Weighted-Average Exercise Price (1)		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Options outstanding at December 31, 2021	4,746,368	$	5.11	9.6	$	—
Granted	1,620,183	$	3.46		$	—
Canceled or forfeited	(353,169)	$	5.62		$	—
Exercised	—	$	—		$	—
Options outstanding at September 30, 2022	6,013,382	$	4.66	9.1	$	—
Options vested and expected to vest at Options vested at September 30, 2022	1,510,728	$	5.33	0.5	$	—

(1)Exercise price of options outstanding range from $2.42 to $11,340 as of September 30, 2022. The higher end of the range is due to the impact of reverse stock splits subsequent to grants.

As of September 30, 2022, the total unrecognized compensation expense, net of estimated forfeitures, relating to stock options was $15.7 million, which is expected to be recognized over the remaining weighted-average period of approximately 2.4 years.

Restricted stock. Non-vested restricted stock awards and the changes during the nine months ended September 30, 2022, were as follows:


	Number of Shares	Weighted-Average Grant-Date Fair Value
Outstanding at December 31, 2021	6,882,502	$	3.77
Granted	2,348,105	$	2.58
Vested and issued	(3,484,585)	$	2.85
Canceled or forfeited	(374,842)	$	4.90

Non-vested at September 30, 2022	5,371,180	$	3.95

The total fair value of restricted stock that vested during the nine months ended September 30, 2022, was $0.6 million. As of September 30, 2022, the total unrecognized compensation expense, net of estimated forfeitures, relating to restricted stock awards was $19.4 million, which is expected to be recognized over the remaining weighted-average period of approximately 2.3 years. As of September 30, 2022, we have no unvested liability-classified restricted stock awards.