XML 31 R21.htm IDEA: XBRL DOCUMENT
v3.22.1

STOCK-BASED COMPENSATION | 3 Months Ended
--- | ---
Mar. 31, 2022
Share-based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | 15. STOCK-BASED COMPENSATION The Company adopted an Incentive Stock Plan on January 18, 2007. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock. While the plan terminates 10 years after the adoption date, issued options have their own schedule of termination. During 2013, the majority of the stockholders approved to increase the total available shares in the plan from 2.5 million to 3.5 million shares of common stock. During May 2014, the majority of the stockholders approved to increase the total available shares in the plan from 3.5 million to 4.25 million shares of common stock, during February 2015, the majority of the stockholders approved to increase the total available shares in the plan from 4.25 million to 4.6 million shares of common stock and during April 2015, the majority of the stockholders approved to increase the total available shares in the plan from 4.6 million to 5.1 million shares of common stock. Upon exercise, shares of new common stock are issued by the Company. The Company adopted the 2015 Stock Incentive Plan on April 30, 2015. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. The 2015 Plan permits the grant of options and shares for up to 5,000,000 shares. In addition, there is a provision for an annual increase of 15% of the shares pertaining to the 2015 plan that are outstanding as of the last day of the prior year. As of March 31, 2022, approximately 4.6 million shares are available. Under the 2015 Stock Incentive Plan, the Company has issued options to purchase approximately 3.4 million shares at an average price of $7.68 with a fair value of $161.0 million. For the three months ended March 31, 2022 and 2021, the Company issued opti ons to purchase nil and 303,750 shares, respectively. Upon exercise, shares of new common stock are issued by the Company. For the three months ended March 31, 2022 and 2021, the Company recognized an expense of approximately $4.3 million and $3.6 million, respectively, of non-cash compensation expense (included in General and Administrative expense in the accompanying Consolidated Statement of Operations) determined by the fair value of the restricted stock unit price on the day of issuance or through application of a Black-Scholes option pricing model with the following inputs: exercise price, dividend yields, risk-free interest rate, and expected annual volatility. As of March 31, 2022 the Company had approximately $6.6 million of unrecognized pre-tax non-cash compensation expense related to options to purchase shares, which the Company expects to recognize, based on a weighted-average period of 1.7 years. The Company used straight-line amortization of compensation expense over the two to three-year requisite service or vesting period of the grant. The maximum contractual term of the Company's stock options is 10 years. The Company recognizes forfeitures as they occur. There are options to purchase approximately 3.4 million shares that have vested as of March 31, 2022. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and warrant issuances. The calculation of the fair value of the awards using the Black-Scholes option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following:
|  | Three months ended March 31,
|  | 2022 |  | 2021
Expected volatility |  | 69.2% - 81.1% |  | 69.18%-81.11%
Expected term |  | 4.5 - 5.0 Years |  | 4.49-5.00 Years
Risk-free interest rate |  | 0.3% - 1.4% |  | 0.32% - 1.39%
Forfeiture Rate |  | 0.0% |  | 0.0%
The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. A summary of the status of the Company’s outstanding stock options as of March 31, 2022 and changes during the periods ending on that date is as follows:
|  |  |  |  | Weighted Average |  |  |  |  |  | Weighted |
|  | Shares |  |  | Exercise |  |  | Grant Date Fair |  |  | Aggregate Intrinsic |  |  | Average Remaining |
|  | (000’s) |  |  | Price |  |  | Value |  |  | Value (000’s) |  |  | Term (Yrs) |
Options |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
At December 31, 2021 |  |  | 3,600 |  |  | $ | 7.47 |  |  |  |  |  | $ | 241,515 |  |  |  | 6.37 |
Granted |  |  | — |  |  | $ | — |  |  | $ | — |  |  |  |  |  |  |
Exercised |  |  | (209 | ) |  | $ | 4.02 |  |  | $ | 48.44 |  |  | $ | 80,500 |  |  |  |
Forfeiture and cancelled |  |  | (1 | ) |  | $ | 4.66 |  |  |  |  |  |  |  |  |  |
At March 31, 2022 |  |  | 3,390 |  |  | $ | 7.68 |  |  |  |  |  |  | 161,015 |  |  |  | 6.26 |
Exercisable at March 31, 2022 |  |  | 2,560 |  |  | $ | 5.59 |  |  |  |  |  | $ | 126,964 |  |  |  | 5.78 |
The following table summarizes information about employee stock options outstanding at March 31, 2022:
|  | Outstanding Options |  |  | Vested Options |
|  | Number |  |  |  |  |  |  |  |  | Number |  |  |  |  |  |  |
|  | Outstanding |  |  | Weighted |  |  | Weighted |  |  | Exercisable |  |  | Weighted |  |  | Weighted |
Range of |  | at |  |  | Averaged |  |  | Averaged |  |  | at |  |  | Averaged |  |  | Averaged |
Exercise |  | March 31, |  |  | Remaining |  |  | Exercise |  |  | March 31, |  |  | Exercise |  |  | Remaining |
Price |  | 2022 (000’s) |  |  | Life |  |  | Price |  |  | 2022 (000’s) |  |  | Price |  |  | Life |
$0.20 - $0.53 |  |  | 20 |  |  |  | 1.84 |  |  | $ | 0.34 |  |  |  | 20 |  |  | $ | 0.34 |  |  |  | 1.84 |
$0.65 - $1.80 |  |  | 100 |  |  |  | 2.91 |  |  | $ | 1.05 |  |  |  | 100 |  |  | $ | 1.05 |  |  |  | 2.91 |
$1.83 - $2.84 |  |  | 107 |  |  |  | 3.78 |  |  | $ | 1.97 |  |  |  | 107 |  |  | $ | 1.97 |  |  |  | 3.78 |
$3.20 - $6.20 |  |  | 2,783 |  |  |  | 6.18 |  |  | $ | 4.16 |  |  |  | 2,208 |  |  | $ | 4.21 |  |  |  | 5.87 |
$7.20-$60.00 |  |  | 380 |  |  |  | 8.68 |  |  | $ | 37.15 |  |  |  | 125 |  |  | $ | 37.33 |  |  |  | 8.69 |
Outstanding options |  |  | 3,390 |  |  |  | 6.26 |  |  | $ | 7.68 |  |  |  | 2,560 |  |  | $ | 5.59 |  |  |  | 5.78 |
As of March 31, 2022, the Company had approximately $6.6 million of unrecognized pre-tax non-cash compensation expense related to options to purchase shares, which the Company expects to recognize, based on a weighted-average period of 1.7 years. Restricted Stock Awards Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the holder leaves the Company before the restrictions lapse. The holders of a restricted stock award are generally entitled after the release to transact and obtain the same rights as rights of a shareholder of the Company, including the right to vote the shares. The holders of unvested restricted stock awards do not have the same rights as shareholders including but not limited to any dividends which may be declared by the Company, and do not have the right to vote. The value of restricted stock awards that vest over time is established by the market price on the date of its grant. A summary of the Company’s restricted stock activity for the three months ended March 31, 2022 and 2021 is presented in the following table:
|  | For the three months ended |
|  | March 31, 2022 |  |  | March 31, 2021 |
|  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  |  |  |  | Average |  |  |  |  |  | Average |
|  |  |  |  | Grant Date |  |  |  |  |  | Grant Date |
|  | Shares (000's) |  |  | Fair Value |  |  | Shares (000's) |  |  | Fair Value |
Unvested at beginning of period |  |  | 0.2 |  |  | $ | 14.72 |  |  |  | 66 |  |  | $ | 28.11 |
Transfers to restricted stock units |  |  | — |  |  |  | — |  |  |  | (46 | ) |  |  | 34.02 |
Granted |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Vested |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 22.30 |
Forfeiture and cancelled |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Unvested at end of period |  |  | 0.2 |  |  | $ | 14.72 |  |  |  | 20 |  |  | $ | 14.72 |
The total fair value of shares vested during the three months ended March 31, 2022 and 2021 was immaterial. Unrecognized compensation expense related to outstanding restricted stock awards to employees and directors as of March 31, 2022 was approximately $0.0 million and is expected to be expensed over the next 0.3 years. Unrecognized compensation expense related to outstanding restricted stock awards to employees and directors as of March 31, 2021 was $0.2 million. Restricted Stock Units Restricted stock units are awards that give the holder the right to receive one share of common stock for each restricted stock unit upon meeting service-based vesting conditions (typically annual vesting in three equal annual installments, with a requirement that the holder remains in the continuous employment of the Company). The holders of unvested units do not have the same rights as stockholders including but not limited to any dividends which may be declared by the Company, and do not have the right to vote. The value of restricted stock units that vest over time is established by the market price on the date of its grant. A summary of the Company’s restricted stock unit activity for the three months ended March 31, 2022 and 2021 is presented in the following table:
|  | For the three months ended |
|  | March 31, 2022 | March 31, 2021 |
|  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  |  |  |  | Average |  |  |  |  |  | Average |
|  |  |  |  | Grant Date |  |  |  |  |  | Grant Date |
|  | Shares (000's) |  |  | Fair Value |  |  | Shares (000's) |  |  | Fair Value |
Unvested at beginning of period |  |  | 566 |  |  | $ | 52.66 |  |  |  | — |  |  | $ | — |
Transfers from restricted stock awards |  |  | — |  |  |  | — |  |  |  | 46 |  |  |  | 34.02 |
Granted |  |  | 189 |  |  |  | 74.57 |  |  |  | 468 |  |  |  | 50.56 |
Vested |  |  | (111 | ) |  |  | 51.10 |  |  |  | — |  |  |  | — |
Forfeited and cancelled |  |  | (18 | ) |  |  | 54.88 |  |  |  | (10 | ) |  |  | 50.31 |
Unvested at end of period |  |  | 626 |  |  | $ | 59.50 |  |  | $ | 504 |  |  | $ | 49.06 |
The total fair value of shares vested during the three months ended March 31, 2022 was $5.6 million, respectively. Unrecognized compensation expense related to outstanding restricted stock units to employees and directors as of March 31, 2022 and 2021 was $29.7 million and $22.8 million, respectively, and is expected to be expensed over the next 2.4 years. Stock-based Awards Issued to Non-employee Consultants The Company issues stock-based awards to third-party consultants for providing marketing, sales, and general business development services related to Celsius products. The stock-based awards are in the form of restricted stock units with performance vesting conditions (“performance stock units” or “PSUs”). The holders of unvested PSUs do not have the same rights as stockholders including but not limited to any dividends which may be declared by the Company, and do not have the right to vote. The PSU performance vesting conditions are linked to the consultants obtaining specified incremental earnings for the Company in a given year over the performance vesting period, typically five years. The fair value of PSUs is based on the market price of the underlying stock on the grant date. The Company recognizes compensation cost for performance stock awards issued to non-employees in the same manner and periods as though cash had been paid for services received. A summary of the Company’s PSU activity for the three months ended March 31, 2022 and 2021 is presented in the following table:
|  | For the three months ended |
|  | March 31, 2022 | March 31, 2021 |
|  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  |  |  |  | Average |  |  |  |  |  | Average |
|  |  |  |  | Grant Date |  |  |  |  |  | Grant Date |
|  | Shares (000's) |  |  | Fair Value |  |  | Shares (000's) |  |  | Fair Value |
Unvested at beginning of period |  |  | 15 |  |  | $ | 64.65 |  |  |  | — |  |  | $ | — |
Granted |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Vested |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Forfeited and cancelled |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Unvested at end of period |  |  | 15 |  |  | $ | 64.65 |  |  | $ | — |  |  | $ | — |
The total fair value of shares vested during the three months ended March 31, 2022 was $0.1 million. Unrecognized compensation expense related to outstanding PSUs issued to non-employee consultants as of March 31, 2022 was approximately $0.9 million and is expected to be expensed over the next 4.3 years. Modifications There were certain Board of Directors members and employees whose service was terminated during 2021. In connection with their terminations, the vesting conditions of the previously granted awards were modified to accelerate the vesting of specified un-vested awards pursuant to Board resolutions or severance agreements. Pursuant ASC 718, these were Type III modifications requiring re-valuation of un-vested awards to modification date fair value with recognition of compensation expense over the remaining service period. There were no modifications for the three month periods ending March 31, 2022 and March 31, 2021.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration