Note 8 - Stock Based Compensation

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 8 - STOCK BASED COMPENSATION

Our board of directors adopted our 2021 Equity Incentive Plan (the “Plan”), to provide employees of the Company and its subsidiaries, certain consultants and advisors who perform services for the Company or its subsidiaries, and non-employee members of the board of directors of the Company with the opportunity to receive grants of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, other stock-based awards, and cash awards to enable us to motivate, attract and retain the services of directors, officers and employees considered essential to the long term success of the Company.  Under the terms of the Plan, the aggregate number of shares of awards will be no more than 2,275,727 shares. If and to the extent shares of awards granted under the Plan, expire or are canceled, forfeited, exchanged or surrendered without having been exercised, or if any stock awards, stock units or other stock-based awards are forfeited, terminated or otherwise not paid in full, the shares subject to such grants shall again be available for issuance or transfer under the Plan. The Plan has a term of ten years until August 12, 2031.

Restricted Stock Units

During the three months ended March 31, 2022, the Company granted 1,044 RSUs to certain directors of the Company. Total outstanding RSUs as of March 31, 2022 are 169,136. 127,176 of these RSUs, were not issued pursuant to a formal plan, were granted prior to the IPO, and became fully vested upon the IPO. 50,693 RSUs were granted subsequent to the IPO and are pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”). On December 31, 2021, 4,631 RSUs vested and 4,102 RSUs were forfeited during the three months ended March 31, 2022. RSUs are subject to restrictions on transfer and may be subject to a risk of forfeiture if the award recipient ceases to be an employee or director of the Company prior to vesting of the award. Each RSU represents the right to receive one share of common stock upon vesting. Each RSU is also entitled to receive a dividend equivalent payment equal to the dividend paid on one share of common stock upon vesting. Unearned dividend equivalents on unvested RSUs as of March 31, 2022 and 2021 were $26,854 and $0, respectively. The amortization of compensation costs for the awards of RSUs are included in stock-based compensation in the accompanying consolidated statements of operations and amount to approximately $0.2 million and $0.9 million for the three months ended March 31, 2022 and 2021, respectively. The remaining unrecognized compensation cost of approximately $0.9 million for RSU awards is expected to be recognized over a weighted average amortization period of 1.2 years as of March 31, 2022.

The following table sets forth our unvested restricted stock activity from January 1, 2022 through March 31, 2022:

	Number of Unvested Shares of RSUs			Weighted- Average Grant Date Fair Value Per Share
Balance at January 1, 2022		45,018		$	27.49
Granted		1,044		$	27.49
Forfeited		(4,102	)	$	27.49
Balance at March 31, 2022		41,960		$	27.49

The following table sets forth our unvested restricted stock activity from January 1, 2021 through March 31, 2021:

	Number of Unvested Shares of RSUs			Weighted- Average Grant Date Fair Value Per Share
Balance at January 1, 2021		47,403		$	20.99
Granted		38,308		$	21.15
Vested		(42,266	)	$	21.15
Balance at March 31, 2021		43,445		$	20.98

Performance Stock Units

During the three months ended March 31, 2022, the Company did not grant any Performance Stock Units (“PSUs”) to officers or employees of the Company. Total outstanding PSUs as of March 31, 2022 and 2021 are 77,742 and 0, respectively. PSUs vest subject to the achievement of relative total shareholder return as measured against a peer group of companies and absolute compounded annual growth in stock price during each performance period. The actual number of shares of common stock issued will range from 0 to 155,484 depending upon performance. The performance periods are August 13, 2021 through December 31, 2023 and January 1, 2022 through December 31, 2024, and 21,202 and 56,540 PSUs are scheduled to vest at the end of each performance period, respectively. PSUs are recorded at fair value which involved using a Monte Carlo simulation for the future stock prices of the Company and its corresponding peer group. A fair value of $24.15 and $24.00 was used for PSUs with performance periods ending December 31, 2023 and 2024, respectively.

PSUs are subject to restrictions on transfer and may be subject to a risk of forfeiture if the award recipient ceases to be an employee of the Company prior to vesting of the award. Each PSU is entitled to receive a dividend equivalent payment equal to the dividend paid on the number of shares of common stock issued per PSU vesting. Unearned dividend equivalents on unvested PSUs as of March 31, 2022 and 2021 were $49,755 and $0, respectively. The amortization of compensation costs for the awards of PSUs are included in stock-based compensation in the accompanying consolidated statements of operations and amount to $0.2 million and $0 for the three months ended March 31, 2022 and 2021, respectively. The remaining unrecognized compensation cost of approximately $1.7 million for PSU awards is expected to be recognized over a weighted average amortization period of 1.3 years as of March 31, 2022.

The following table sets forth our unvested performance stock activity from January 1, 2022 through March 31, 2022:

	Number of Unvested Shares of PSUs		Weighted- Average Grant Date Fair Value Per Share
Balance at January 1, 2022		77,742	$	24.04
Granted		-	$	-
Vested		-	$	-
Balance at March 31, 2022		77,742	$	24.04

There were no performance stock units issued or outstanding at March 31, 2021.

Stock Options

The Company issued 791,790 nonqualified stock options (the “Options”) to purchase shares of the Company’s common stock, subject to the terms and conditions of the applicable Option Grant Agreements, with an exercise price per share of common stock equal to $24.00 and in such amounts as set forth in the Option Grant Agreements. The Options vested on August 31, 2020. The Options are exercisable upon the earliest of (i) the second anniversary of the Grant Date; (ii) termination of the grantee’s employment or service by the Company other than for cause, or by the grantee for “good reason”, the grantee’s death or disability or (iii) a change in control, as defined. As of March 31, 2022, 615,838 of the 791,790 Option Grants issued to the Company’s four employees and a director are exercisable. Options expire on July 15, 2027.

The following table summarizes stock option activity from January 1, 2022 through March 31, 2022:

	Number of Shares		Weighted Average Exercise Price
Non-Exercisable at January 1, 2022		175,952	$	24.00
Granted		-		-
Exercisable		-		-
Non-Exercisable at March 31, 2022		175,952	$	24.00

The following table summarizes stock option activity from January 1, 2021 through March 31, 2021:

	Number of Shares		Weighted Average Exercise Price
Non-Exercisable at January 1, 2021		263,928	$	24.00
Granted		-		-
Exercisable		-		-
Non-Exercisable at March 31, 2021		263,928	$	24.00