STOCK-BASED COMPENSATION PLANS

9 Months Ended

Sep. 30, 2023

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS

(11)   STOCK-BASED COMPENSATION PLANS

In June 2017, our stockholders approved the 2017 Stock Incentive Plan (the “2017 Stock Plan”) with a maximum of 5,500,000 shares reserved for issuance. Awards permitted under the 2017 Stock Plan include: Stock Options and Restricted Stock. Awards issued under the 2017 Stock Plan are at the discretion of the Board of Directors. As applicable, awards are granted with an exercise price equal to the closing price of our common stock on the date of grant and generally vest over four years. Restricted Stock Awards are issued to the recipient upon grant and are not included in outstanding shares until such vesting and issuance occurs.

During the three and nine months ended September 30, 2023, no stock option awards were granted under the 2017 Stock Plan. During the three months ended September 30, 2022 no stock option awards were granted under the 2017 Stock Plan. During the nine months ended September 30, 2022, 200,000 stock option awards were granted under the 2017 Stock Plan. At September 30, 2023, the Company had 0.6 million stock options outstanding and 0.6 million exercisable under the following plans:

	Outstanding	Exercisable
	Number of Options	Number of Options
	Outstanding Number of Options	Exercisable Number of Options
	(in thousands)	(in thousands)
Plan Category
2005 Stock Option Plan	211	211
2017 Stock Option Plan	351	351
Total	562	562

During the three and nine months ended September 30, 2023, 86,000 and 223,000 shares of restricted stock were granted under the 2017 Stock Plan, respectively. During the three and nine months ended September 30, 2022, 50,000 and 143,000 shares of restricted stock were granted to the Board of Directors and management under the 2017 Stock Plan, respectively. The fair market value of restricted shares for share-based compensation expensing is equal to the closing price of our common stock on the date of grant. The vesting on restricted stock awards typically occur quarterly over three years for the Board of Directors and quarterly or annually over two to four years for management.

The following summarizes stock-based compensation expenses recorded in the condensed consolidated statements of income (in thousands):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Cost of Revenue	$	10	$	13	$	26	$	40
Sales and marketing expense		53		16		182		130
General, and administrative		591		549		1,413		1,532
Total stock based compensation expense	$	654	$	578	$	1,621	$	1,702

The Company received proceeds of $0.1 million related to option exercises during the three and nine months ended September 30, 2023. The Company received proceeds of $0.1 million related to option exercises during each of the three and nine months ended September 30, 2022. No stock option awards were granted by the Company during the three and nine months ended September 30, 2023.

A summary of stock option activity under all equity compensation plans for the nine months ended September 30, 2023, is presented below:

				Weighted-
		Weighted-		Average	Aggregate
	Number of	Average		Remaining	Intrinsic
	Shares	Exercise		Contractual	Value
	(in thousands)	Price		Term (Years)	(in thousands)
Outstanding at December 31, 2022	793	$	2.67	5.03	$	8,908
Granted	—	$	—
Forfeited	(206)	$	6.30
Exercised	(25)	$	5.36
Outstanding at September 30, 2023	562	$	1.22	2.80	$	3,807
Exercisable at September 30, 2023	562	$	1.22	2.80	$	3,807

A summary of restricted stock award activity under all equity compensation plans for the nine months ended September 30, 2023, is presented below:

	Number of
	Shares	Weighted Average
	(in thousands)	Grant Date Fair Value
Granted but not vested at December 31, 2022	431	$	11.92
Granted	223		9.88
Forfeited	(11)		11.71
Vested	(157)		11.90
Granted but not vested at September 30, 2023	486	$	11.82

As of September 30, 2023, the Company had approximately $4.5 million of unrecognized compensation expense related to stock options and restricted stock awards that will be recognized over a weighted average period of approximately 2.4 years.