Share Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Share Based Compensation

Note 11 – Share Based Compensation

Omnibus Incentive Plan

The Company issues share-based awards under its Company’s 2016 Omnibus Incentive Plan, which enables the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, other share based awards and cash awards to associates, directors, consultants, and advisors of the Company and its affiliates, and to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company. Stock options granted under the 2016 Plan may be non-qualified stock options or incentive stock options, within the meaning of Section 422(b) of the Internal Revenue Code of 1986, except that stock options granted to outside directors and any consultants or advisers providing services to the Company or an affiliate shall in all cases be non-qualified stock options. The option price must be at least 100% of the fair market value on the date of grant and if issued to a 10% or greater shareholder must be 110% of the fair market value on the date of the grant.

The 2016 Plan is to be administered by the Board, which has discretion over the awards and grants thereunder. No awards may be issued after November 21, 2026.

The Plan was adopted in 2016 and amended in 2018, 2020 and 2021 to increase the number of shares authorized to be awarded under the Plan. As of December 31, 2021 there are 4,500,000 shares authorized under the Plan as a result of the increase authorized by our shareholders in 2021. The number of shares subject to the Plan is automatically adjusted from time to time such that shares authorized under the plan shall at all times be equal to at least 20% of the issued and outstanding shares of the Company on a fully diluted basis. The current number of shares authorized is greater than the 20% minimum.

Stock Options

The fair value of each option grant is estimated at the grant date using the Black Scholes method. The following assumptions were used in estimating fair value:

	2021			2020
Expected term		5.44 – 6.5 years			5.16 – 5.76 years
Volatility		112.94 – 103.6	%		107.5	%
Risk free interest rate		0.08 – 1.20	%		0..30 – 0.36	%
Dividend yield		0.00	%		0.00	%

The Company estimated the expected term of the options using the simplified method. The Company uses its stock’s historical market information to calculate volatility used in estimating fair value of options granted.

ENVVENO MEDICAL CORPORATION

f/k/a HANCOCK JAFFE LABORATORIES, INC.

NOTES TO FINANCIAL STATEMENTS

A summary of the option activity during the years ended December 31, 2021 and 2020 is presented below:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Life		Intrinsic
	Options			Price		In Years		Value
Outstanding, January 1, 2020		99,689		$	111.00
Granted		122,000			10.00
Forfeited		(11,000	)		63.88
Outstanding, December 31, 2020		210,689		$	31.48		8.7	$	-
Granted		3,246,551		$	7.70
Forfeited		(15,333	)		8.36
Outstanding, December 31, 2021		3,441,907		$	9.16		9.3	$	-
Exercisable, December 31, 2021		982,921		$	12.94		8.9	$	-

The Company includes share-based compensation expense in selling, general and administrative expenses, and recognized $6.0 million and $0.7 million during the years ended December 31, 2021 and 2020, respectively.

As of December 31, 2021, there was $15.2 million of unrecognized share-based compensation expense related to outstanding stock options and restricted stock units that will be recognized over the weighted average remaining vesting period of 2 years.

ENVVENO MEDICAL CORPORATION

f/k/a HANCOCK JAFFE LABORATORIES, INC.

NOTES TO FINANCIAL STATEMENTS

Restricted Stock Units

The Company also issues restricted shares and restricted stock units under the 2016 Plan. A summary of the restricted share and restricted stock units activity during the years ended December 31, 2021 and 2020 is presented below:

	Number of
	Restricted Shares
Outstanding, January 1, 2020		7,806
Granted		10,000
Shares vested		(12,864	)
Outstanding, December 31, 2020		4,942
Granted		400,000
Shares Vested		(2,860	)
Outstanding, December 31, 2021		402,082

A summary of outstanding restricted stock units as of December 31, 2021 is presented below:

Restricted Stock Units
Grant Date	Restricted Stock Unit for	Outstanding Number of Units		Weighted Average Remaining Life In Years
9/13/2019	Common Stock		2,082		0.9
11/30/2021	Common Stock		400,000		-
	Total		402,082