Note 16 - Stock-based Compensation

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

16. Stock-Based Compensation

Stock-Based Compensation Expense. The Company records stock-based compensation expense during the requisite service period for share-based payment awards granted to employees and non-employees.

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

	Year Ended December 31,
	2021		2020			2019
Equity Classified Awards
Stock options
Cost of goods sold	$	16	$	—		$	—
Research and development		681		—			—
Selling, general and administrative		1,990		—			—
Restricted stock awards
Cost of goods sold		27		—			—
Research and development		1,345		481			228
Selling, general and administrative		3,641		1,620			993
Total equity classified awards		7,700		2,101			1,221
Liability Classified Awards
Restricted stock
Selling, general and administrative		2,165		—			—
Stock appreciation rights
Research and Development		9		137			66
Selling, general and administrative		—		(113	)		62
Total liability classified awards		2,174		24			128
Total stock-based compensation	$	9,874	$	2,125		$	1,349

Stock Option Award Activity. Stock option activity under the Company’s option plans at December 31, 2021 and changes during the year ended December 31, 2021 were as follows.

						Weighted-
						Average
				Weighted-		Remaining
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Options			Price (1)		(years)		Value
Options outstanding at December 31, 2020		1,552		$	556.13		5.6	$	—
Granted		4,762,004		$	4.63
Canceled or forfeited		(17,188	)	$	5,693.43
Exercised		—		$	—
Options outstanding at December 31, 2021		4,746,368		$	5.11		9.6	$	—
Options exercisable at December 31, 2021		1,515		$	429.54		4.6	$	—
Options vested and expected to vest at December 31, 2021		4,746,368		$	5.11		9.6	$	—

(1) Exercise price of options outstanding range from $4 to $56,460 as of December 31, 2021.

The aggregate intrinsic values in the table above represent the total pretax intrinsic values (the difference between the closing price of Gevo’s common stock on the last trading day of the 2021 calendar year and the exercise price, multiplied by the number of in-the-money stock option shares) that would have been received by the option holders had all in-the-money outstanding stock options been exercised on December 31, 2021.

No stock options vested during the year ended December 31, 2021. As of December 31, 2021, the total unrecognized compensation expense, net of estimated forfeitures, relating to stock options was $19.1 million, which is expected to be recognized over the remaining weighted-average period of approximately 2.6 years.

The following table sets forth the minimum and maximum Black-Scholes option pricing model assumptions and resulting grant date fair value for the stock options granted during the year ended December 31, 2021:

	Grant Date (1)
Exercise price	$	4.42		to	$	5.38
Risk-free interest rate		0.87	%	to		1.36	%
Expected dividend yield		—		to		—
Expected volatility factor		141	%	to		142	%
Expected option life (years)		5.75		to		6.0
Weighted-average fair value	$	4.06			$	4.95

(1) There were no grants of stock options during the years ended December 31, 2020 and 2019.

There is a maximum contractual term of ten years for the share options. The Company settles stock option exercises with newly issued common shares. No tax benefits were realized by the Company in connection with these exercises as the Company maintains net operating loss carryforwards and has established a valuation allowance against the entire tax benefit.

Restricted Stock. The Company periodically grants restricted stock awards to employees and directors. The vesting period for restricted stock awards granted may be based upon a service period or based upon the attainment of performance objectives. The Company recognizes stock-based compensation over the vesting period, generally two to three years, for awards that vest based upon a service period. 

Non-vested restricted stock awards at December 31, 2021 and changes during the year ended December 31, 2021 were as follows.

				Weighted-
				Average
	Number of			Grant-Date
	Shares			Fair Value
Non-vested at December 31, 2020		4,701,556		$	0.79
Granted		4,955,693		$	5.08
Vested		(2,625,259	)	$	1.04
Canceled or forfeited		(149,488	)	$	1.31
Non-vested at December 31, 2021		6,882,502		$	3.77

The total fair value of restricted stock that vested during the years ended December 31, 2021, 2020 and 2019 was $2.8 million, $1.5 million and $0.7 million, respectively. As of December 31, 2021, the total unrecognized compensation expense, net of estimated forfeitures, relating to restricted stock awards was $22.5 million, which is expected to be recognized over the remaining weighted-average period of approximately 2.4 years.

Stock Appreciation Rights. The Company granted 67,739 stock appreciation rights valued at an aggregate of $0.6 million on the respective dates of grant during the year ended December 31, 2018. The vesting period for stock appreciation rights granted are based upon a service period. The stock appreciation rights have the potential to be cash settled in the event there are insufficient shares available from the 2010 Plan and are therefore classified as a liability and remeasured at each reporting period based on the price of the Company's common stock.