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Stock Options and Restricted Stock Units | 6 Months Ended
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Jun. 30, 2022
Stock Options and Restricted Stock Units |
Stock Options and Restricted Stock Units | 5. Stock Options and Restricted Stock Units A summary of option activity under the Innodata Inc. 2013 Stock Plan, as amended and restated effective June 7, 2016 (the “2013 Plan”) and changes during each of the six-month periods ended June 30, 2022 and 2021 are presented below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Weighted - |  | Weighted-Average |  | ​
​ | ​ | Number of |  | Average Exercise |  | Remaining Contractual | ​ | Aggregate
​ |  | Options |  | Price |  | Term (years) |  | Intrinsic Value
Outstanding at January 1, 2021 |  | 5,906,884 | ​ | $ | 1.61 |  |  |  | ​ |
Granted |  | 360,000 | ​ |  | 6.40 |  |  |  | ​ |
Exercised |  | (1,245,182) | ​ |  | 2.12 |  |  |  | ​ |
Forfeited/Expired |  | (20,000) | ​ |  | 1.38 |  |  |  | ​ |
Outstanding at June 30, 2021 |  | 5,001,702 | ​ | $ | 1.83 |  | 7.60 | ​ | $ | 25,837,675
​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​
Exercisable at June 30, 2021 |  | 3,425,983 | ​ | $ | 1.62 | ​ | 7.12 | ​ | $ | 18,426,406
​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​
Vested and Expected to Vest at June 30, 2021 |  | 5,001,702 | ​ | $ | 1.83 |  | 7.60 | ​ | $ | 25,837,675
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ | ​ |  | Weighted-Average |  | ​ | ​
​ | ​ | Number of | ​ | Weighted - Average | ​ | Remaining Contractual | ​ | Aggregate
​ | ​ | Options | ​ | Exercise Price | ​ | Term (years) | ​ | Intrinsic Value
Outstanding at January 1, 2022 | ​ | 5,536,896 | ​ | $ | 2.66 | ​ |  | ​ |  | ​
Granted |  | 1,479,558 |  | ​ | 5.21 |  |  |  | ​ |
Exercised |  | (146,705) |  | ​ | 1.22 |  |  |  | ​ |
Forfeited/Expired |  | (36,000) |  | ​ | 5.13 |  |  |  | ​ |
Outstanding at June 30, 2022 |  | 6,833,749 | ​ | $ | 3.24 |  | 7.62 | ​ | $ | 13,923,020
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Exercisable at June 30, 2022 |  | 3,578,045 | ​ | $ | 1.81 |  | 6.40 | ​ | $ | 11,195,079
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Vested and Expected to Vest at June 30, 2022 |  | 6,833,749 | ​ | $ | 3.24 |  | 7.62 | ​ | $ | 13,923,020
​ A summary of option activity under the Innodata Inc. 2021 Stock Plan and changes during the six-month period ended June 30, 2022 are presented below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | Weighted-Average | ​ | ​
​ | ​ | Number of | ​ | Weighted - Average | ​ | Remaining Contractual | ​ | Aggregate Intrinsic
​ | ​ | Options | ​ | Exercise Price | ​ | Term (years) | ​ | Value
Outstanding at January 1, 2022 |  | - | ​ | $ | - |  |  |  | ​ |
Granted |  | 25,000 | ​ |  | 6.40 |  |  |  | ​ |
Exercised |  | - | ​ |  | - |  |  |  | ​ |
Forfeited/Expired |  | - | ​ |  | - |  |  |  | ​ |
Outstanding at June 30, 2022 |  | 25,000 | ​ | $ | 6.40 |  | 5.00 | ​ | $ | -
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Exercisable at June 30, 2022 |  | - | ​ | $ | - |  |  | ​ |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Vested and Expected to Vest at June 30, 2022 |  | 25,000 | ​ | $ | 6.40 |  | 5.00 | ​ | $ | -
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ During the six months ended June 30, 2022, a total of 146,705 options were exercised at an average price of $1.22. ​ The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average fair value of the options granted, and weighted-average assumptions were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Six Months Ended June 30,
​ |  | 2022 |  | 2021
Weighted average fair value of options granted | ​ | $ | 3.10 | ​ | $ | 3.33
Risk-free interest rate | ​ | ​ | 1.94%-2.75% | ​ | ​ | 0.22%-0.82%
Expected term (years) | ​ | ​ | 3.0-6.42 | ​ | ​ | 3-6
Expected volatility factor | ​ | ​ | 62% - 76.48% | ​ | ​ | 59.62%
Expected dividends | ​ | ​ | - | ​ | ​ | -
​ A summary of restricted stock units issued under the 2013 Plan and the 2021 Plan (collectively, the “Equity Plans”) is presented below: In March 2022, the Company granted restricted stock units (“RSU”) to key executives, pursuant to the Equity Plans. Each RSU has vesting conditions based on both the achievement of performance-based metrics and the continuation of employment over a defined period. The level of performance determines the number of RSUs that performance-vest, and performance vested RSUs must also time-vest in order to be fully vested. Each fully-vested RSU represents the right to receive one share of the Company’s common stock or the fair market value of one share of common stock, at the Company’s discretion, and is classified as an equity award. Each RSU vests pursuant to the vesting schedule found in the respective RSU agreement. RSUs are generally subject to graduated vesting schedules and stock-based compensation expense is computed by tranche and recognized on a straight-line basis over the tranches’ applicable vesting period based on the expected achievement level. The fair value of restricted stock units is estimated on the date of grant using the Binomial option pricing model. Restricted stock unit activity during the six months ended June 30, 2022 was as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Number of Restricted |  | Weighted-Average Grant
​ |  | Stock Awards |  | Date Fair Value
Unvested at January 1, 2022 | ​ | 25,000 | ​ | $ | 1.38
Granted |  | - |  | ​ | -
Vested |  | (25,000) |  | ​ | 1.38
Forfeited/Expired |  | - |  | ​ | -
Unvested at June 30, 2022 |  | - | ​ | $ | -
​
​ | ​ | ​ | ​ | ​ | ​
​ |  | Number of |  | Weighted-Average
​ | ​ | Restricted Stock | ​ | Grant Date
​ | ​ | Units | ​ | Fair Value
Unvested at January 1, 2022 |  | - |  | $ | -
Granted* |  | 700,000 | ​ | ​ | 5.59
Vested |  | - | ​ |  | -
Forfeited/Expired |  | - | ​ |  | ​
Unvested at June 30, 2022 |  | 700,000 | ​ | $ | 5.59
​ * 200,000 RSUs were issued under the 2013 Plan and 500,000 RSUs were issued under the 2021 Plan The compensation cost related to non-vested stock options not yet recognized as of June 30, 2022 totaled approximately $7.1 million. The weighted-average period over which these costs will be recognized is 27 months. During the six months ended June 30, 2022, 700,000 performance-based restricted stock units were granted and remain non-vested at June 30, 2022. Vesting of the performance-based restricted stock units is contingent on the achievement of certain financial performance goals and service vesting conditions. There were no restricted stock units granted during the three months ended June 30, 2022. The compensation cost related to non-vested restricted stock units not yet recognized as of June 30, 2022 totaled approximately $3.0 million. The weighted-average period over which these costs will be recognized is 24 months. The stock-based compensation expense related to the Equity Plans were allocated as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Three Months Ended | ​ | For the Six Months Ended
​ | ​ | June 30, | ​ | June 30,
​ |  | 2022 |  | 2021 |  | 2022 |  | 2021
Direct operating costs | ​ | $ | 56 | ​ | $ | 37 | ​ | $ | 107 | ​ | $ | 75
Selling and administrative expenses | ​ |  | 972 | ​ |  | 299 | ​ |  | 1,458 | ​ |  | 539
Total stock-based compensation | ​ | $ | 1,028 | ​ | $ | 336 | ​ | $ | 1,565 | ​ | $ | 614
​

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