Stock-based Compensation, Warrants and Shares Reserved

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock-based Compensation, Warrants and Shares Reserved

Note 11: Stock-based Compensation, Warrants and Shares Reserved  

 At the Company’s 2020 annual meeting of stockholders, the stockholders approved the Company’s 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards, and other forms of equity compensation (collectively “stock awards”). In addition, the 2020 Plan provides for the grant of cash awards. The initial aggregate number of shares of common stock that may be issued initially pursuant to stock awards under the 2020 Plan is 2,000,000 shares. The number of shares of common stock reserved for issuance automatically increases on January 1 of each calendar year during the term of the 2020 Plan, commencing January 1, 2021, by 5.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares of common stock determined by the Company’s board of directors before the start of a calendar year for which an increase applies. One of the provisions of the 2020 Plan is that no award may be granted, issued or made under the 2020 Plan until such time as the fair market value of the common stock, which is generally the closing sales price of the common stock on the principal stock market on which the common stock is traded, has been equal to or greater than $3.00 per share (subject to proportionate adjustment for stock splits, reverse stock splits, and similar events) for at least ten consecutive trading days, after which time awards may be made under the 2020 Plan without regard to any subsequent increase or decrease in the fair market value of the common stock. No awards were made pursuant to the 2020 Plan as of June 30, 2021.

On January 1, 2021, pursuant to the 2020 Equity Incentive Plan the number of shares reserved for the issuance of stock awards increased by 4,692,103 shares. 

Stock Options

The following summarizes the stock option activity for the six months ended June 30, 2021 below:

	2009 Equity Incentive Plan			Weighted Average Exercise Price		Weighted Average Remaining Contract Life
Total Outstanding Vested and Expected to Vest as of December 31, 2020		6,508,296		$	4.29	5.60   years
Options Cancelled/Expired		(394,430	)		3.99	—
Total Outstanding Vested and Expected to Vest as of June 30, 2021		6,113,866		$	4.31	5.15   years
Vested at June 30, 2021		6,108,933		$	4.31	5.15   years

Expense related to stock options for the three months ended June 30, 2021 and 2020 was approximately $5,000 and $292,000, respectively; and for the six months ended June 30, 2021 and 2020, expense related to stock options was approximately $147,000 and $722,000, respectively. As of June 30, 2021, the compensation expense related to stock options have been fully amortized.

The aggregate intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) of the 6,113,866   and  6,508,296  stock options outstanding at June 30, 2021 and December 31, 2020 was $0, respectively. The aggregate intrinsic value of  6,108,933   and  6,397,703   stock options exercisable at June 30, 2021 and December 31, 2020 was $0, respectively.  

  The following table summarizes the RSUs outstanding at June 30, 2021:  

	Number of Shares/Units			Weighted Average Grant Date Fair Value
Non-vested RSUs as of December 31, 2020		2,136,893		$	3.64
RSUs vested during the period		(66,462	)		3.04
RSUs forfeited during the period		(36,171	)		3.09
Non-vested RSUs as of June 30, 2021		2,034,260			3.66

Expense related to RSUs for the three months ended June 30, 2021 and 2020 was approximately $793,000 and $823,000, respectively; and for the six months ended June 30, 2021 and 2020, expense related to RSUs was approximately $1,531,000 and $1,612,000, respectively. As of June 30, 2021, the unamortized compensation expense related to RSUs options was approximately $2,980,000. The weighted-average period in years over which the remaining unamortized expense will be recognized is 1.68 years.

The following summarizes warrants outstanding at June 30, 2021 and December 31, 2020:  

	Warrant			Exercise Price		Date	Expiration
June 30, 2021	Shares			Per Share		Issued	Date
Old Adamis Warrants		58,824		$	8.50	November 15, 2007	November 15, 2021
Preferred Stock Series A-2 Warrants		192,414		$	2.90	July 11, 2016	July 11, 2021
2016 Common Stock, Private Placement		700,000		$	2.98	August 3, 2016	August 3, 2021
2019 Warrants		13,794,000	*	$	1.15	August 5, 2019	August 5, 2024
2020 Warrants		350,000	**	$	0.70	February 25, 2020	September 3, 2025
Total Warrants		15,095,238

*	The Company adopted ASU 2020-06. See Note 8.
**	As of June 30, 2021, the fair value of the warrant liability related to the 2020 Warrants was approximately $ 245,000. See Note 8.

December 31, 2020	Warrant Shares			Exercise Price  Per Share		Date Issued	Expiration Date
Old Adamis Warrants		58,824		$	8.50	November 15, 2007	November 15, 2021
Preferred Stock Series A-1 Warrants		1,183,432		$	4.10	January 26, 2016	January 26, 2021
Preferred Stock Series A-2 Warrants		192,414		$	2.90	July 11, 2016	July 11, 2021
2016 Common Stock, Private Placement		700,000		$	2.98	August 3, 2016	August 3, 2021
2019 Warrants		13,800,000	*	$	1.15	August 5,2019	August 5, 2024
2020 Warrants		8,700,000	**	$	0.70	February 25, 2020	September 3, 2025
Total Warrants		24,634,670

*	As of December 31, 2020, the fair value of the warrant liability related to the 2019 Warrants was $2,484,000. See Note 8.
**	As of December 31, 2020, the fair value of the warrant liability related to the 2020 Warrants was $2,001,000. See Note 8.

At June 31, 2021, the Company has reserved shares of common stock for issuance following vesting of restricted stock units and upon exercise of outstanding options including options granted under the 2009 Equity Incentive Plan, and upon exercise of outstanding warrants, as follows:  

Warrants	15,095,238
Restricted Stock Units (RSU)	2,034,260
2009 Equity Incentive Plan	6,113,866
Total Shares Reserved	23,243,364