Note 11– Share-based Compensation (Successor)

The Andover National Corporation 2019 Equity Incentive Plan (the “Plan”) provides for the issuance of incentive and non-incentive stock options, stock grants and share-based awards. Options and restricted stock units granted generally vest over a period of one to four years and have a maximum term of ten years from the date of grant.

As of December 31, 2020, an aggregate of 1,084,132 shares of common stock were authorized under the Plan, subject to an “evergreen” provision that will automatically increase the maximum number of shares of Common Stock that may be issued under the term of the Plan. As of December 31, 2020, 919,700 common shares were available for future grants under the Plan.

The fair value of the Company’s restricted stock and restricted stock unit grants were determined by reference to recent or anticipated cash transactions involving the sale of the Company’s common stock. The fair value of the Company’s common stock was estimated to be $11.00 per share at December 31, 2020.

The Company recorded total share-based compensation expense of $1.0 million and $0.2 million for the year ended December 31, 2020 and for the period October 4, 2019 to December 31, 2019, respectively.

Restricted Stock

During the year ended December 31, 2020, 10,000 shares of restricted stock vested with a weighted average grant date fair value of $10 per share. The fair market value of restricted stock vesting during the year ended December 31, 2020 was $110,000.

Restricted Stock Units

Below is a table summarizing the unvested restricted stock units for period from October 4, 2019 through December 31, 2020:



			Weighted average grant-
	Units		date fair value
Unvested as of October 4, 2019		—	$	—
Granted		150,000		11.00
Unvested as of December 31, 2019		150,000	$	11.00
Granted		18,182		11.00
Forfeited		(13,750)	$	11.00
Vested		(49,424)		11.00
Unvested as of December 31, 2020		105,008	$	11.00
Total unrecognized expense remaining	$	551,000
Weighted average years expected to be recognized over		1.1

The fair value of restricted stock units that vested during the year ended December 31, 2020 was approximately $0.5 million.