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Stock Options and Restricted Stock Units | 6 Months Ended
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Jun. 30, 2023
Stock Options and Restricted Stock Units |
Stock Options and Restricted Stock Units | 9. Stock Options and Restricted Stock Units The stock-based compensation expense related to the Company’s Equity Plans (as defined below) was allocated as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Three Months Ended | ​ | For the Six Months Ended
​ | ​ | June 30, | ​ | June 30,
​ |  | 2023 |  | 2022 |  | 2023 |  | 2022
Direct operating costs | ​ | $ | 62 | ​ | $ | 56 | ​ | $ | 126 | ​ | $ | 107
Selling and administrative expenses | ​ |  | 957 | ​ |  | 972 | ​ |  | 1,855 | ​ |  | 1,458
Total stock-based compensation | ​ | $ | 1,019 | ​ | $ | 1,028 | ​ | $ | 1,981 | ​ | $ | 1,565
​ ​ Stock Options 2013 Plan 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, 2023 and 2022 are presented below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ |  | Weighted - Average |  | ​
​ | ​ | Number of |  | Weighted - Average |  | Remaining Contractual | ​ | Aggregate
​ |  | Options |  | Exercise Price |  | Term (years) |  | Intrinsic Value
Outstanding at January 1, 2023 |  | 6,690,490 | ​ | $ | 3.09 |  |  |  | ​ |
Granted* |  | 25,000 | ​ |  | 3.31 |  |  |  | ​ |
Exercised |  | (871,884) | ​ |  | 2.34 |  |  |  | ​ |
Forfeited/Expired |  | (75,766) | ​ |  | 6.96 |  |  |  | ​ |
Outstanding at June 30, 2023 |  | 5,767,840 | ​ | $ | 3.16 |  | 6.84 | ​ | $ | 47,137,674
​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​
Exercisable at June 30, 2023 |  | 3,600,261 | ​ | $ | 1.91 | ​ | 5.73 | ​ | $ | 33,897,858
​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​
Vested and Expected to Vest at June 30, 2023 |  | 5,767,840 | ​ | $ | 3.16 |  | 6.84 | ​ | $ | 47,137,674
​ *Granted to a non-employee member of the Company’s advisory board.
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ | ​ |  | 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) |  | ​ | 1.17 |  |  |  | ​ |
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
​ *Includes 110,000 stock options granted to a non-employee director of the Company. 2021 Plan A summary of option activity under the Innodata Inc. 2021 Equity Compensation Plan, as amended and restated effective as of April 11, 2022 (the “2021 Plan”) and changes during each of the six-month periods ended June 30, 2023 and 2022 are presented below. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | Weighted - Average | ​ | ​
​ | ​ | Number of | ​ | Weighted - Average | ​ | Remaining Contractual | ​ | Aggregate
​ |  | Options |  | Exercise Price |  | Term (years) |  | Intrinsic Value
Outstanding at January 1, 2023 |  | 1,027,500 | ​ | $ | 3.46 |  |  |  | ​ |
Granted |  | - | ​ |  | - |  |  |  | ​ |
Exercised |  | (25,000) | ​ |  | 6.40 |  |  |  | ​ |
Forfeited/Expired |  | (42,000) | ​ |  | 3.41 |  |  |  | ​ |
Outstanding at June 30, 2023 |  | 960,500 | ​ | $ | 3.38 |  | 9.27 | ​ | $ | 7,634,060
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Exercisable at June 30, 2023 |  | 18,750 | ​ | $ | 3.39 |  | 9.21 | ​ | $ | 148,875
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Vested and Expected to Vest at June 30, 2023 |  | 960,500 | ​ | $ | 3.38 |  | 9.27 | ​ | $ | 7,634,060
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | ​ | ​ |  | Weighted - Average |  | ​ | ​
​ | ​ | Number of | ​ | Weighted - Average | ​ | Remaining Contractual | ​ | Aggregate
​ | ​ | Options | ​ | Exercise Price | ​ | Term (years) | ​ | Intrinsic 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 | ​ | $ | -
​ *Granted to a non-employee member of the Company’s advisory board. During the six months ended June 30, 2023, a total of 896,884 options were exercised at an average price of $2.50. 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, | ​
​ |  | 2023 |  | 2022 | ​
Weighted average fair value of options granted | ​ | $ | 1.79 | ​ | $ | 3.10 | ​
Risk-free interest rate | ​ | ​ | 3.88 | % | ​ | 1.94%-2.75 | %
Expected term (years) | ​ | ​ | 3.0 | ​ | ​ | 3.0-6.42 | ​
Expected volatility factor | ​ | ​ | 79.95 | % | ​ | 62%-76.48 | %
Expected dividends | ​ | ​ | - | ​ | ​ | - | ​
​ The compensation cost related to non-vested stock options not yet recognized as of June 30, 2023 totaled approximately $5.4 million. The weighted-average period over which these costs will be recognized is 20 months. Restricted Stock Awards There were no outstanding awards of restricted stock under the 2013 Plan or the 2021 Plan (collectively, the “Equity Plans”) during each of the six-month periods ended June 30, 2023 and 2022. Restricted Stock Units Restricted stock unit activity under the Equity Plans during each of the six-month periods ended June 30, 2023 and 2022 are presented below: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Number of |  | Weighted-Average
​ | ​ | Restricted Stock | ​ | Grant Date
​ |  | Units |  | Fair Value
Unvested at January 1, 2023 | ​ | 700,000 | ​ | $ | 5.59
Granted |  | 28,804 |  | ​ | 8.29
Vested |  | - |  | ​ | -
Forfeited/Expired |  | - |  | ​ | -
Unvested at June 30, 2023 |  | 728,804 | ​ | $ | 5.70
​ For the six months ended June 30, 2023, a total of 28,804 restricted stock units (“RSUs”) were granted under the 2013 Plan. Vesting of the RSUs is contingent on continuous employment by the employee for a 12-month period from the date of grant. 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. The stock-based compensation expense is recognized on a straight-line basis over a period of 12 months. The fair value of restricted stock units is based on the closing price of the stock at the time of the grant. ​
​ | ​ | ​ | ​ | ​ | ​
​ |  | 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
​ For the six months ended June 30, 2022, 200,000 performance-based RSUs were granted under the 2013 Plan and 500,000 performance-based RSUs were granted under the 2021 plan. The 700,000 performance based RSUs remain outstanding and unvested at June 30, 2023. Vesting of the performance based RSUs is contingent on the achievement of certain financial performance goals and continuation of employment for a defined period. Each RSU vests pursuant to the vesting schedule found in the respective RSU agreement. The fair value of restricted stock units is estimated on the date of grant using the Binomial option pricing model. The compensation cost related to non-vested restricted stock units not yet recognized as of June 30, 2023 totaled approximately $3.0 million. The weighted-average period over which these costs will be recognized is 20 months.

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