On December 31, 2015, the Company adopted the Stanley Brothers, Inc. 2015 Stock Option Plan (the “2015 Plan”), which provides for grants of incentive stock options and nonqualified stock options to employees (including officers), consultants and directors. The 2015 Plan, and grants made under the 2015 Plan, are designed to align shareholder and participant interests. The Company’s board of directors establishes the terms and conditions of any grants under the 2015 Plan. Incentive stock options may be granted only to employees.

On August 31, 2018, the Company adopted the Charlotte’s Web Holdings, Inc. 2018 Long-Term Incentive Plan (the “2018 Plan”), which provides for grants of stock options, stock appreciation rights, share awards, share units, performance shares, performance units, and other share-based awards (collectively the “Awards”) to eligible individuals on the terms and subject to conditions set forth in the 2018 Plan. The 2018 Plan is designed to attract and retain key personnel and service providers. The Company’s board of directors, or appointed administrators, establish the terms and conditions of any grants under the 2018 Plan.

The aggregate number of common shares of the Company as to which share incentive awards may be granted from time to time under both the 2015 Plan and 2018 Plan shall not exceed 13,500,000 shares. The maximum exercise period of any option grant shall not exceed ten years from the date of grant. The share incentive awards vest over a time-based service period, generally a period of one to four years, and are settled in equity. The number of available awards at December 31, 2021, was 8,855,118.

Stock options vest over a prescribed service period and are approved by the board of directors on an award-by-award basis. Options have a prescribed service period generally lasting up to four years, with certain options vesting immediately upon issuance. Upon the exercise of any stock options, the Company issues shares to the award holder from the pool of authorized but unissued common shares.

The fair values of options granted during the period were determined using a Black-Scholes model. The following principal inputs were used in the valuation of awards issued for the years ended December 31, 2021 and 2020:


	Year Ended December 31,
	2021	2020
Expected volatility	82.0% - 86.5%	84.1% - 87.4%
Expected term (years)	5.0 – 7.0	0.3 – 7.0
Risk-free interest rate	1.3% - 1.7%	0.5% - 1.4%
Expected dividend yield	0%	0%
Value of underlying share	$1.02 - $4.70	$2.40 - $7.13

Detail of the number of stock options outstanding for the years ended December 31, 2021 and 2020 under the 2015 and 2018 plans is as follows:


	Number of Options	Weighted- Average Exercise Price per Option		Weighted- Average Remaining Contract Term (in years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2020	3,330,206	$	3.93	7.83	$	4,955,658
Granted	1,290,662	3.56
Exercised	(8,261)	3.64
Forfeited (and expired)	(1,268,724)	5.57
Outstanding as of December 31, 2021	3,343,883	$	3.16	7.54	$	1,039,229

Exercisable/vested as of December 31, 2021	2,003,375	$	2.56	5.54	$	941,729

For the options outstanding at December 31, 2021, the weighted average remaining contractual life is 7.54 years. The weighted average grant-date fair value of options granted during the year ended December 31, 2021 was $3.56.

For the options outstanding at December 31, 2020, weighted average remaining contractual life is 7.83 years. The weighted average grant-date fair value of options granted during the year ended December 31, 2020 was $4.92.

The weighted average share price at the date of exercise of options exercised during the years ending December 31, 2021 and 2020 was $4.85 and $5.20, respectively.

Vesting of awards under these plans were generally time based over a period of one to four years. For the 720,261 option awards vested during the year ended December 31, 2021, the weighted average grant date fair value was $5.93. For the 1,004,939 option awards vested during the year ended December 31, 2020, the weighted average grant date fair value was $4.84.

Of the 3,343,883 options outstanding at December 31, 2021, 1,300,012 options have an exercise price of $0.56, and the remaining 2,043,871 options have an exercise price ranging between $1.02 and $21.10.

The Company has issued time-based restricted share units to certain employees as permitted under the 2018 Plan. The restricted share units granted vest in accordance with the board-approved agreement, typically over equal installments over one to four years. Upon vesting, one share of the Company’s common shares is issued for each restricted share awarded. The fair value of each restricted share unit granted is equal to the market price of the Company’s shares at the date of the grant. The fair value of shares vested during the year ended December 31, 2021 was $751.


	Number of Shares	Weighted- Average Grant Date Fair Value
Outstanding as of December 31, 2020	456,675	$	6.47
Granted	2,160,313	2.50
Forfeited	(584,290)	5.07
Vested	(182,727)	5.40
Outstanding as of December 31, 2021	1,816,851	$	2.28

Share-based compensation expense for all equity arrangements for the years ended December 31, 2021 and 2020 was $5,483 and $4,326, respectively, included in selling, general and administrative expense in the consolidated statements of operations and comprehensive loss.

As of December 31, 2021, and 2020, there was approximately $4,638 and $6,769 of total unrecognized share-based compensation expense, related to unvested options granted to employees under the Company’s share option plan that is expected to be recognized over a weighted average period of 2.27 years as of each year ended.