Stock Incentive Plans

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

2013 Stock Incentive Plan

The Company’s board of directors approved a stock incentive plan (the “Plan”) in 2013. The Plan permits the Company to grant 495,000 non statutory or incentive stock options to the employees, directors and consultants of the Company. 495,000 shares of unissued common stock are reserved for the Plan. The board of directors has the authority to determine the participants to whom stock options shall be awarded as well as any restrictions to be placed upon the awards. The exercise price cannot be less than the fair value of the underlying shares at the time the stock options are issued and the maximum length of an award is ten years.

On June 11, 2021, the compensation committee of the board of directors approved the issuance of 38,943 non statutory stock option awards to employees of the Company. All of the awards have an exercise price of $3.31 per share with a weighted average grant date fair value of $1.64 per share. These options vested immediately upon issuance.

On December 3, 2021, the compensation committee of the board of directors approved the issuance of 12,500 non statutory stock option awards to an employee of the Company. All of the awards have an exercise price of $2.08 per share with a weighted average grant date fair value of $0.46 per share. These awards vest 50 percent once the closing price of the Company’s stock is in excess of $7.50 per share for 10 out of 20 consecutive trading days and an additional 50 percent once the closing price of the Company’s common stock is in excess of $12.50 per share for 10 out of 20 consecutive trading days.

2014 Omnibus Performance Award Plan

In 2014, the board of directors and stockholders adopted the 2014 Omnibus Performance Award Plan, or the 2014 Plan. The 2014 Plan provides for the grant of cash awards, stock options, stock appreciation rights, or SARs, shares of restricted stock and restricted stock units, or RSUs, performance shares and performance units. The 2014 Plan originally authorized the grant of awards relating to 250,000 shares of our common stock. In the event of any transaction that causes a change in capitalization, the compensation committee, such other committee administering the 2014 Plan or the board of directors will make such adjustments to the number of shares of common stock delivered, and the number and/or price of shares of common stock subject to outstanding awards granted under the 2014 Plan, as it deems appropriate and equitable to prevent dilution or enlargement of participants’ rights. An amendment approved in March of 2016 by our board of directors, which was approved by our stockholders at our annual meeting of stockholders in June 2016, increased the number of shares authorized for grant of awards under the 2014 Plan to a total of 450,000 shares of our common stock. In July 2020, an additional amendment was approved at our annual meeting of stockholders, which increased the number of shares authorized for grant of awards under the 2014 Plan to a total of 700,000 shares of our common stock.

The fair value of each of the option awards is estimated on the grant date using a Black Scholes option pricing model that uses the weighted average assumptions noted in the following tables. The expected volatility is based on the historical volatility of the stock of comparable companies. The expected term of the awards was estimated based on findings from academic studies investigating the average holding period for options for adjusted for the Company’s size and risk factors. The risk free rate for periods within the contractual life of the option is based on the United States Treasury yield curve in effect at the time of grant.

On May 4, 2021, the compensation committee of the board of directors approved the issuance of 139,278 non statutory stock option awards to employees of the Company. All of the awards have an exercise price of $4.51 per share with a weighted average grant date fair value of $2.28 per share. 20% of these options vested immediately and the remainder vest in 20% tranches on each of May 4, 2022, 2023, 2024, and 2025, respectively.

On June 11, 2021, the compensation committee of the board of directors approved the issuance of 59,254 non statutory stock option awards to employees of the Company. All of the awards have an exercise price of $3.31 per share with a weighted average grant date fair value of $1.64 per share. These options vested immediately upon issuance.

On December 3, 2021, the compensation committee of the board of directors approved the issuance of 12,500 non statutory stock option awards to an employee of the Company. All of the awards have an exercise price of $2.08 per share with a weighted average grant date fair value of $1.22 per share. 40% of these options vest on December 3, 2022, and the remainder vest in 20% tranches on each of December 3, 2023, 2024, and 2025, respectively.


	May 4, 2021		June 11, 2021		December 3, 2021
Expected volatility	53.76	%	57.77	%	64.26	%
Dividend yield	—	%	—	%	—	%
Expected term (in years)	6		5		6
Risk-free rate	1.05	%	0.96	%	1.21	%

A summary of option activity under both plans is presented below:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value(1)
	(dollars in thousands, except share data and exercise price)
Outstanding at December 31, 2020	726,500	$	4.53	7.2	$	1,484
Granted	262,475	$	3.83	5.0	$	—
Exercised	—	$	—	0.0	$	—
Forfeited or expired	142,244	$	9.73	0.0	$	—
Outstanding at December 31, 2021	846,731	$	4.00	7.6	$	—
Vested and exercisable at December 31, 2021	384,858	$	4.85	6.6	$	—

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(1)The aggregate intrinsic value above is obtained by subtracting the exercise price from the estimated fair value of the underlying shares and multiplying this result by the related number of options outstanding and exercisable as of the period end date. There is no intrinsic value if the exercise price exceeds the fair value of the underlying shares. The estimated fair value of the shares is based on the closing stock price of $1.96 as of December 31, 2021 and $5.50 as of December 31, 2020.

The Company recorded gross compensation expense of approximately $0.4 million for the twelve months ended December 31, 2021 and $0.1 million for the twelve months ended December 31, 2020, in its consolidated statements of operations, as a component of sales, general, and administrative expenses. The income tax benefit related to share based compensation expense was immaterial for the twelve months ended December 31, 2021 and December 31, 2020.

As of December 31, 2021, there was approximately $0.6 million of total unrecognized compensation cost related to non-vested stock option awards under the plans. That cost is expected to be recognized over a weighted average period of 3.8 years.