Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.22.2.2
Stock-Based Compensation
9 Months Ended
Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation STOCK-BASED COMPENSATION
The Company maintains, as approved by the board of directors, the 2017 Incentive Stock Plan and the 2019 Incentive Stock Plan (the “Plans”) providing for the issuance of stock-based awards to employees, officers, directors or consultants of the Company. Non-qualified stock options may only be granted with an exercise price equal to the market value of the Company’s common stock on the grant date. Awards under the Plan may be either vested or unvested options, or unvested restricted stock. The Plans have authorized 13.0 million shares for issuance of stock-based awards. As of September 30, 2022 there were approximately 2.0 million shares available for issuance of future stock awards under the Plans.
Stock-based compensation expense
The following table summarizes stock-based compensation expense for the periods indicated:

Three Months Ended September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Stock options $ 245,867  $ 181,558  $ 732,830  $ 273,180 
Restricted stock awards 2,047,989  1,039,647  5,954,098  2,980,366 
Performance-based restricted stock awards 691,419  —  1,941,049  — 
Total stock-based compensation expense $ 2,985,275  $ 1,221,205  $ 8,627,977  $ 3,253,546 

Stock options
A summary of stock option activity for the nine months ended September 30, 2022 is as follows:

Number of Options Weighted
Average
Exercise Price
per Option
Weighted
Average
Remaining
Contractual Life
(Years)
Balance, December 31, 2021 495,836  $ 6.80  6.5
Exercised (69,710) 1.48 
Forfeited (2,500) 22.30 
Balance, September 30, 2022 423,626  $ 7.63  6.7
Number of options exercisable at September 30, 2022 218,006  $ 5.48  4.6

As of September 30, 2022, unrecognized compensation expense was $1.9 million for unvested options which is expected to be recognized over the next 1.9 years.

Restricted stock awards
A summary of restricted stock award activity for the nine months ended September 30, 2022 is as follows:

Number of Unvested Shares Weighted Average Grant Date Fair Value per Share
Balance, December 31, 2021 1,617,192  $ 9.33 
Granted 2,838,164  3.10 
Vested (709,607) 6.71 
Forfeited (149,833) 6.27 
Balance, September 30, 2022 3,595,916  $ 5.06 
As of September 30, 2022, unrecognized compensation expense was $15.3 million for unvested restricted stock awards which is expected to be recognized over the next 2.2 years.

Performance share units (PSUs)

On February 23, 2022, the Company issued 0.9 million PSUs to certain executives. The vesting of the PSUs is conditioned upon achievement of certain performance objectives over a performance period ending December 31, 2024 as defined in each award agreement. Fifty percent of the PSUs vest based upon the Company’s total shareholder return as compared to a group of peer companies (“TSR PSUs”), and fifty percent of the PSUs vest based upon the Company’s performance on certain measures including a cumulative adjusted EBITDA target (“EBITDA PSUs”). Depending on the actual achievement on the performance objectives, the grantee may earn between 0% and 200% of the target PSUs.

A summary of the activity for PSU awards with total shareholder return performance objectives for the nine months ended September 30, 2022 is as follows:
Number of Unvested Shares Weighted Average Grant Date Fair Value per Share
Balance, December 31, 2021 306,197  $ 11.79 
Granted 454,832  11.79 
Forfeited (22,278) 11.79 
Balance, September 30, 2022 738,751  $ 11.79 
The grant date fair value of $11.79 per TSR PSU was estimated using a Monte-Carlo simulation model using a volatility assumption of 117% and risk-free interest rate of 0.69%.
As of September 30, 2022, unrecognized compensation expense was $6.6 million for unvested TSR PSUs, which is expected to be recognized over the next 2.3 years.

A summary of the PSU awards with cumulative adjusted EBITDA targets for the nine months ended September 30, 2022 is as follows:
Number of Unvested Shares
Balance, December 31, 2021 — 
Granted 454,822 
Forfeited (22,276)
Balance, September 30, 2022 432,546 
The fair value of performance share units is calculated based on the stock price on the date of grant. The stock-based compensation expense recognized each period is dependent upon our estimate of the number of shares that will ultimately vest based on the achievement of EBITDA-based performance conditions. Future stock-based compensation expense for unvested EBITDA PSUs will be based on the fair value of the awards as of the grant date, which has not yet occurred, as the cumulative adjusted EBITDA target condition is not yet defined.