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Stock-Based Compensation | 9 Months Ended
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Sep. 30, 2020
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation | NOTE 10 - STOCK-BASED COMPENSATION Stock Option Plans In connection with the Company’s acquisition of Pointer, the Company previously approved the grants of options to purchase 350,000 shares of the Company’s common stock to Mr. Wolfe and options to purchase 150,000 shares of the Company’s common stock to Mr. Mavrommatis on March 13, 2019 (the “Signing Bonus Options”) and the grants of additional options to purchase 350,000 shares of the Company’s common stock to Mr. Wolfe and additional options to purchase 150,000 shares of the Company’s common stock to Mr. Mavrommatis on October 3, 2019 (the “Closing Bonus Options” and together with the Signing Bonus Options, the “Original Bonus Options”). The Original Bonus Options were subject to the terms of the Company’s 2018 Incentive Plan (the “2018 Plan”), vested upon the attainment of adjusted EBITDA targets for the fiscal years ending December 31, 2020 and December 31, 2021 and became exercisable 180 days after vesting, subject to acceleration in the event of certain change of control transactions. The Signing Bonus Options had an exercise price of $6.28 per share and the Closing Bonus Options had an exercise price of $6.00 per share. In response to the impact of COVID-19, the Board terminated and cancelled the Original Bonus Options and approved the following grants to replace the Original Bonus Options: (i) options to purchase 350,000 shares of the Company’s common stock to Mr. Wolfe and options to purchase 150,000 shares of the Company’s common stock to Mr. Mavrommatis (the “New Signing Options”), which options are subject to the terms of the 2018 Plan, have an exercise price of $6.28 per share, and will vest and become exercisable in full on December 31, 2022 if the volume weighted average price of the Company’s common stock during a consecutive 30 trading day period (the “30 Day VWAP”) reaches $12.00 at any point prior to December 31, 2022, and (ii) options to purchase 350,000 shares of the Company’s common stock to Mr. Wolfe and options to purchase 150,000 shares of the Company’s common stock to Mr. Mavrommatis (the “New Closing Options”), which options are subject to the terms of the 2018 Plan, have an exercise price of $6.00 per share, and will vest and become exercisable immediately upon the Company achieving a 30 Day VWAP of $10.00. [A] Stock options: The following table summarizes the activity relating to the Company’s stock options for the nine-month period ended September 30, 2020:
|  | Options |  |  | Weighted-Average Exercise Price |  |  | Weighted-Average Remaining Contractual Term |  | Aggregate Intrinsic Value |
Outstanding at beginning of year |  |  | 4,078 |  |  | $ | 5.79 |  |  |  |  |  |  |
Granted |  |  | 1,155 |  |  |  | 6.10 |  |  |  |  |  |  |
Exercised |  |  | (145 | ) |  |  | 4.33 |  |  |  |  |  |  |
Forfeited or expired |  |  | (1,402 | ) |  |  | 6.03 |  |  |  |  |  |  |
Outstanding at end of period |  |  | 3,686 |  |  | $ | 5.85 |  |  | 8 years |  | $ | 1,884 |
Exercisable at end of period |  |  | 994 |  |  | $ | 5.57 |  |  | 6 years |  | $ | 780 |
The fair value of each option grant on the date of grant is estimated using the Black-Scholes option-pricing model reflecting the following weighted-average assumptions:
|  | September 30, |
|  | 2019 |  |  | 2020 |
Expected volatility |  |  | 24.2 | % |  |  | 44.7 | %
Expected life of options (in years) |  |  | 3 |  |  |  | 6 |
Risk free interest rate |  |  | 1.41 | % |  |  | 1.17 | %
Dividend yield |  |  | 0 | % |  |  | 0 | %
Weighted average fair value of options granted during the period |  | $ | 2.72 |  |  | $ | 2.58 |
Expected volatility is based on historical volatility of the Company’s common stock and the expected life of options is based on historical data with respect to employee exercise periods. The Company valued the New Signing Options and the New Closing Options market-based performance stock option awards using a Monte Carlo simulation model using a daily price forecast over ten years until expiration utilizing Geometric Brownian Motion that considers a variety of factors including, but not limited to, the Company’s common stock price, risk-free rate (0.70%), and expected stock price volatility (47%) over the expected life of awards (6 years). The weighted average fair value of options granted during the period was $1.27. The Company recorded stock-based compensation expense of $161 and $458 for the three- and nine-month periods ended September 30, 2019, respectively, and $366 and $1,209 for the three- and nine-month periods ended September 30, 2020, respectively, in connection with awards made under the stock option plans. The fair value of options vested during the nine-month periods ended September 30, 2019 and 2020 was $363 and $1,194, respectively. The total intrinsic value of options exercised during the nine-month periods ended September 30, 2019 and 2020 was $112 and $228, respectively. As of September 30, 2020, there was approximately $4,124 of unrecognized compensation cost related to non-vested options granted under the Company’s stock option plans. That cost is expected to be recognized over a weighted-average period of 4.16 years. The Company estimates forfeitures at the time of valuation and reduces expense ratably over the vesting period. This estimate is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate. [B] Restricted Stock Awards: The Company grants restricted stock to employees, whereby the employees are contractually restricted from transferring the shares until they are vested. The stock is unvested at the time of grant and, upon vesting, there are no legal restrictions on the stock. The fair value of each share is based on the Company’s closing stock price on the date of the grant. A summary of all non-vested restricted stock for the nine-month period ended September 30, 2020 is as follows:
|  | Number of Non-vested Shares |  |  | Weighted-Average Grant Date Fair Value |
Restricted stock, non-vested, beginning of year |  |  | 877 |  |  | $ | 6.17 |
Granted |  |  | 444 |  |  |  | 4.82 |
Vested |  |  | (284 | ) |  |  | 6.16 |
Forfeited |  |  | (101 | ) |  |  | 6.08 |
Restricted stock, non-vested, end of period |  |  | 936 |  |  | $ | 5.55 |
The Company recorded stock-based compensation expense of $387 and $1,274, respectively, for the three- and nine-month periods ended September 30, 2019 and $593 and $1,641, respectively, for the three- and nine-month periods ended September 30, 2020, in connection with restricted stock grants. As of September 30, 2020, there was $3,689 of total unrecognized compensation cost related to non-vested shares. That cost is expected to be recognized over a weighted-average period of 2.06 years. [C] Restricted Stock Units: The Company granted restricted stock units (RSUs) to Pointer employees in connection with the Transactions on October 3, 2019. The following table summarizes the activity relating to the Company’s restricted stock units for the three-month period ended September 30, 2020:
|  | Number of Restricted Stock Units |  |  | Weighted-Average Grant Date Fair Value |
Restricted stock units, non-vested, beginning of year |  |  | 253 |  |  | $ | 5.60 |
Granted |  |  | - |  |  |  | - |
Vested |  |  | (131 | ) |  |  | 5.60 |
Forfeited |  |  | (28 | ) |  |  | 5.60 |
Restricted stock units, non-vested, end of period |  |  | 94 |  |  | $ | 5.60 |
The Company recorded stock-based compensation expense of $-0- and $-0-, respectively, for the three- and nine-month periods ended September 30, 2019 and $33 and $228, respectively, for the three- and nine-month periods ended September 30, 2020, in connection with the RSUs. As of September 30, 2020, there was $317 total unrecognized compensation cost related to non-vested RSUs. That cost is expected to be recognized over a weighted-average period of 1.53 years.

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