Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

) STOCK-BASED COMPENSATION

We account for stock-based compensation under the fair value recognition provisions of ASC Topic 718 - Compensation - Stock Compensation. We recognize stock-based compensation cost over the award’s requisite service period on a straight-line basis for time-based restricted stock grants and performance-based restricted stock grants. We record forfeitures as they occur for all stock-based compensation.

The following table presents our total stock-based compensation expense:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Employee stock-based compensation expense
Pre-tax	$	79	$	141	$	388	$	531
Post-tax (1)	62		111		307		419
Director stock-based compensation expense
Pre-tax	29		41		55		103
Post-tax (1)	23		32		43		81

(1) The after tax amounts are determined using the 21% corporate federal tax rate.

We had approximately $2,676,000 of unrecognized stock compensation expense at June 30, 2023 related to non-vested stock-based compensation granted, which we expect to recognize over a weighted-average period of approximately 2.3 years. We had approximately $218,000 of unrecognized director stock-based compensation expense at June 30, 2023 related to non-vested director stock-based compensation granted, which we expect to recognize over a weighted-average period of approximately 0.9 years.

Restricted stock, restricted stock units and performance stock units

Stock-based compensation cost for restricted stock awards, restricted stock units and performance stock units is measured based on the closing fair market value of our common stock on the date of grant, which vest in equal installments over the requisite service period of typically three years. Restricted stock awards granted to non-employee directors vest over a one-year period. Each restricted stock unit and performance stock unit represents our obligation to deliver to the holder one share of common stock upon vesting.

Performance stock units vest based on the Company's return on average equity compared to a defined group of peer companies. On the grant date, we issue the target number of performance stock units. They are subject to forfeitures if performance goals are not met. The actual number of performance stock units earned can vary from zero to 150 percent of the target for the 2023, 2022, and 2021 awards.

We granted 45,000 and 793,041 shares of restricted common stock during the three months ended June 30, 2023 and 2022, respectively, which had a weighted-average grant date fair value of $5.25 and $1.74 per share, respectively. We granted 45,000 and 907,907 shares of restricted common stock during the six months ended June 30, 2023 and 2022, respectively, which had a weighted-average grant date fair value of $5.25 and $1.97 per share, respectively. Additionally, during the three and six month periods ended June 30, 2023, the Company granted 262,933 shares of restricted common stock, with a fair value of $4.33, which are contingent upon stockholder approval of an increase in the number of shares of our common stock that may be issued pursuant to the 2020 Omnibus Incentive Plan. Stockholders will vote on this matter at our 2024 annual meeting of stockholders.

The following table presents certain information related to the activity of our non-vested common stock grants:


	Number of Restricted Shares	Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2022	714,239	$	2.73
Granted (1)	45,000	5.25
Less: Forfeited	130,546	3.16
Less: Vested	179,334	3.20
Outstanding as of June 30, 2023	449,359	$	2.67

(1) Contingent shares have been excluded from the calculations in the table above.

Stock options

Stock option fair value was estimated on the grant date using the Black-Scholes-Merton formula. Stock options vest in equal installments over the requisite service period of typically three years. The following weighted-average assumptions were used to value the stock options granted:


	2023		2022
Expected annual dividend yield	—	%	—	%
Expected volatility	80.84	%	49.66	%
Risk-free interest rate	3.44	%	2.92	%
Expected term	6 years		6 years

The expected annual dividend yield for our options granted during 2023 and 2022 is based on no dividends being paid in future quarters. The expected volatility is a historical volatility calculated based on the daily closing prices over a period equal to the expected term. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the grant date. Expected term takes into account the three-year graded vesting term and the 10-year contractual term of the option.

We did not grant any stock options for the three and six months ended June 30, 2023. We granted 635,643 stock options during the three and six month periods ended June 30, 2022, which had a weighted average grant date fair value of $0.86 per share. Additionally, during the three and six months ended June 30, 2023, the Company granted 123,399 stock options, with a fair value of $3.08, which are contingent upon stockholder approval of an increase in the number of shares of our common stock that may be issued pursuant to the 2020 Omnibus Incentive Plan. Stockholders will vote on this matter at our 2024 annual meeting of stockholders.

The following table presents certain information related to the activity of our non-vested stock option grants:


	Number of Stock Options	Weighted Average Exercise Prices		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2022	1,250,685	$	3.71	7.66	$	—
Granted(1)	—	—		—	—
Less: Forfeited	40,000	3.46		—	—
Less: Expired	161,925	3.05		—	—
Less: Exercised	20,000	3.46		—	—
Outstanding as of June 30, 2023	1,028,760	$	3.83	8.30	$	1,561

Vested as of June 30, 2023(2)	800,759	$	5.25	7.99	$	653
Exercisable as of June 30, 2023	430,568	$	5.25	7.99	$	653

(1) Contingent options have been excluded from the calculations in the table above.

(2) The vested shares are calculated based on all vested shares at June 30, 2023, inclusive of those that have since expired. The weighted average exercise prices, weighted-average remaining contractual term and aggregate intrinsic value is calculated based on only vested shares that are outstanding and exercisable at June 30, 2023.