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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2022
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | NOTE 9 - STOCK-BASED COMPENSATION Stock Option Plans During the first fiscal quarter of 2022, the Company granted options to purchase 5,065,000 shares of the Company’s common stock to certain executives. The options have an exercise price that range from $2.85 to $21.00. The options will vest and become exercisable if the volume weighted average price of the Company’s common stock during a consecutive 60-day trading period (the “60 Day VWAP”) ranges between $10.50 and $21.00. The Company valued the 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 (1.7%), and expected stock price volatility (51.7%) over the expected life of awards (10 years). The weighted average fair value of options granted during the period was $1.27. [A] Stock options: The following table summarizes the activity relating to the Company’s market-based stock options that were granted to certain executives for the nine-month period ended September 30, 2022: SCHEDULE OF STOCK OPTIONS ACTIVITY
|  | Options |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Contractual Terms |  |  | Aggregate Intrinsic Value |
Outstanding at beginning of year |  |  | - |  |  | $ | - |  |  |  |  |  |  |  |  |
Granted |  |  | 5,065 |  |  |  | 14.14 |  |  |  |  |  |  |  |  |
Exercised |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Forfeited or expired |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Outstanding at end of period |  |  | 5,065 |  |  | $ | 14.14 |  |  |  | 9.3 years |  |  | $ | - |
Exercisable at end of period |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |
The following table summarizes the activity relating to the Company’s stock options, excluding the market-based stock options that were granted to certain executives, for the nine-month period ended September 30, 2022:
|  | Options |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Contractual Terms |  |  | Aggregate Intrinsic Value |
Outstanding at beginning of year |  |  | 3,470 |  |  | $ | 5.91 |  |  |  |  |  |  |  |  |
Granted |  |  | 895 |  |  |  | 4.08 |  |  |  |  |  |  |  |  |
Exercised |  |  | - |  |  |  | - |  |  |  |  |  |  |  |  |
Forfeited or expired |  |  | (1,578 | ) |  |  | 5.95 |  |  |  |  |  |  |  |  |
Outstanding at end of period |  |  | 2,787 |  |  | $ | 5.30 |  |  |  | 7.3 years |  |  | $ | 2 |
Exercisable at end of period |  |  | 1,124 |  |  | $ | 5.80 |  |  |  | 5.8 years |  |  | $ | 2 |
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: SCHEDULE OF FAIR VALUE STOCK OPTION ASSUMPTIONS
|  | 2021 |  |  | 2022 |
|  | September 30, |
|  | 2021 |  |  | 2022 |
Expected volatility |  |  | 50.2 | % |  |  | 49.4 | %
Expected life of options (in years) |  |  | 7 |  |  |  | 7 |
Risk free interest rate |  |  | 0.69 | % |  |  | 1.73 | %
Dividend yield |  |  | 0 | % |  |  | 0 | %
Weighted-average fair value of options granted during year |  | $ | 3.81 |  |  | $ | 2.04 |
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 recorded stock-based compensation expense of $345 and $1,061, for the three- and nine-month periods ended September 30, 2021, respectively, and $809 and $2,110, for the three- and nine-month periods ended September 30, 2022, 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, 2021 and 2022 was $508 and $409, respectively. The total intrinsic value of options exercised during the three-month periods ended September 30, 2021 and 2022 was $470 and $-0-, respectively. As of September 30, 2022, there was approximately $6,558 of unrecognized compensation cost related to non-vested options granted under the Company’s stock option plans for the performance stock options that were granted to certain executives. That cost is expected to be recognized over a weighted-average period of 3.20 years. As of September 30, 2022, there was approximately $2,266 of unrecognized compensation cost related to non-vested options granted under the Company’s stock option plans that exclude the performance stock options. That cost is expected to be recognized over a weighted average period of 3.10 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, 2022 is as follows: SCHEDULE OF NON-VESTED RESTRICTED STOCK ACTIVITY
|  | Number of Non- Vested Shares |  |  | Weighted- Average Grant Date Fair Value |
Restricted stock, non-vested, beginning of year |  |  | 629 |  |  | $ | 7.06 |
Granted |  |  | 476 |  |  |  | 3.74 |
Vested |  |  | (183 | ) |  |  | 7.26 |
Forfeited |  |  | (185 | ) |  |  | 7.08 |
Restricted stock, non-vested, end of period |  |  | 737 |  |  | $ | 4.86 |
The Company recorded stock-based compensation expense of $533 and $1,908 for the three- and nine-month periods ended September 30, 2021, respectively, and $254 and $997 for the three-and nine-month periods ended September 30, 2022, respectively, in connection with restricted stock grants. As of September 30, 2022, there was $2,557 of total unrecognized compensation cost related to non-vested shares. That cost is expected to be recognized over a weighted-average period of 2.58 years. [C] Restricted Stock Units: The Company also has granted restricted stock units (RSUs) to employees. The following table summarizes the activity relating to the Company’s restricted stock units for the three-month period ended September 30, 2022: SCHEDULE OF NON-VESTED RESTRICTED STOCK ACTIVITY
|  | Number of Restricted Stock Units |  |  | Weighted- Average Grant Date Fair Value |
Restricted stock units, non-vested, beginning of year |  |  | 36 |  |  | $ | 5.60 |
Granted |  |  | - |  |  |  | - |
Vested |  |  | (31 | ) |  |  | 5.60 |
Forfeited |  |  | - |  |  |  | - |
Restricted stock units, non-vested, end of period |  |  | 5 |  |  | $ | 5.60 |
The Company recorded stock-based compensation expense of $51 and $152 for the three- and nine-month periods ended September 30, 2021, respectively, and $7 and $49 for the three- and nine-month periods ended September 30, 2022, respectively, in connection with the RSUs. As of September 30, 2022, there was $3 total unrecognized compensation cost related to non-vested RSUs. That cost is expected to be recognized over a weighted-average period of 0.13 years.

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