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Equity Incentive Plans
 6 Months Ended
Jun. 30, 2021
Share-based Payment Arrangement [Abstract]  
Equity Incentive Plans

Note 8 – Equity Incentive Plans

 

2017 Equity Incentive Plan

 

Under the Company’s 2017 Equity Incentive Plan, as may be modified and amended by the Company from time to time (the “2017 Equity Plan”), the Board of Directors (the “Board”) (or the compensation committee of the Board, if one is established) may award stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock unit awards (“RSUs”), shares granted as a bonus or in lieu of another award, and other stock-based performance awards. The 2017 Equity Plan allocates 50,000,000 shares of the Company’s common stock (“Plan Shares”) for issuance of equity awards under the 2017 Equity Plan. If any shares subject to an award are forfeited, expire, or otherwise terminate without issuance of such shares, the shares will, to the extent of such forfeiture, expiration, or termination, again be available for awards under the 2017 Equity Plan.

 

During the six months ended June 30, 2021, the Company issued no shares of its common stock under the 2017 Equity Plan.

 

During the six months ended June 30, 2021, the Company granted awards for 3,035,800 non-qualified stock options as described below.

 

As of June 30, 2021, of the 50,000,000 shares authorized under the 2017 Plan for equity awards, 24,553,818 shares have been issued, awards related to 24,686,800 options remain outstanding, and 759,382 shares remain available for future equity awards.

 

There was $104,800 in unrecognized compensation expense for unvested non-qualified stock options and RSUs at June 30, 2021 which will be recognized over approximately 3 years.

 

Non-Qualified Stock Options

 

A summary of the non-qualified stock options granted to employees and consultants under the 2017 Equity Plan during the six months ended June 30, 2021, are presented in the table below:

 

  

Number of

Options

  

Weighted

Average

Exercise

Price

  

Weighted

Average

Remaining

Contractual

Term

  

Aggregate

Intrinsic

Value

 
                 
Outstanding, December 31, 2020   14,251,000   $0.083    8.3   $- 
Granted   3,035,800   $0.085    10.0   $- 
Exercised   -                
Forfeited   -                
Expired   -                       
Outstanding, June 30, 2021   17,286,800   $0.084    8.1   $- 
Exercisable, June 30, 2021   15,536,800   $0.086    7.9   $- 

 

 

Surna Inc.

Notes to Condensed Consolidated Financial Statements

(in US Dollars except share numbers)

(Unaudited)

 

During the six months ended June 30, 2021, we issued a total of 3,035,800 stock options as follows:

 

  ● 1,035,800 stock options were issued to 21 employees in respect of the Company’s 2020 Annual Incentive Awards. The options vested immediately, have a term of 10 years and an exercise price of $0.13.
     
  ● 2,000,000 stock options were issued to our newly appointed Chief Financial Officer. The options vest as follows: 250,000 vested immediately, 417,000 on June 30, 2022, 665,000 on June 30, 2023 and 668,000 on June 30, 2024. The options have a term of 10 year and an exercise price of $0.061.

 

A summary of non-vested non-qualified stock options activity for employees and consultants under the 2017 Equity Plan for the three months ended June 30, 2021, are presented in the table below:

 

 

 

Number of

Options

  

Weighted

Average

Grant-Date

Fair Value

  

Aggregate

Intrinsic Value

  

Grant-Date

Fair Value

 
                
Nonvested, December 31, 2020   -   $-   $-   $- 
Granted   3,035,800   $0.082   $-   $248,678 
Vested   (1,285,800)  $0.112   $-   $143,878 
Forfeited   -             $- 
Expired   -             $- 
Nonvested, June 30, 2021   1,750,000   $0.061   $6,125   $104,800 

 

For the six months ended June 30, 2021 and June 30, 2020, the Company recorded $15,336 and $153,680 as compensation expense related to vested options issued to employees and consultants, net of forfeitures, respectively.

 

A summary of the non-qualified stock options granted to directors under the 2017 Equity Plan during the six months ended June 30, 2021, are presented in the table below:

  

Number of

Options

  

Weighted

Average

Exercise

Price

  

Weighted

Average

Remaining

Contractual

Term

  

Aggregate

Intrinsic

Value ($000)

 
                 
Outstanding, December 31, 2020   7,400,000   $0.067    7.5   $- 
Granted   -                
Exercised   -                
Forfeited/Cancelled   -                
Expired   -                        
Outstanding, June 30, 2021   7,400,000   $0.067    7.0   $- 
Exerciseable, June 30, 2021   7,400,000   $0.067    7.0   $- 

 

A summary of non-vested non-qualified stock options activity for directors under the 2017 Equity Plan for the six months ended June 30, 2021, are presented in the table below:

 

 

Number of

Options

  

Weighted

Average

Grant-Date

Fair Value

  

Aggregate

Intrinsic

Value

  

Grant-Date

Fair Value

 
                
Nonvested, December 31, 2020   1,000,000   $0.029   $35,500   $29,000 
Granted   -                
Vested   (1,000,000)  $0.029        $(29,000)
Forfeited   -                
Expired   -                
Nonvested, June 30, 2021   -        $-   $- 

 

 

Surna Inc.

Notes to Condensed Consolidated Financial Statements

(in US Dollars except share numbers)

(Unaudited)

 

During the six months ended June 30, 2021 and June 30, 2020, the Company incurred $6,412 and $49,488, respectively, as compensation expense related to 1,000,000 and 1,521,352 vested options, respectively, issued to directors.

 

Effective June 24, 2020, the Company issued 2 million non-qualified stock options under the 2017 Equity Plan to newly appointed directors. The options vested 50% upon grant and 50% on April 1, 2021, if the Director remained on the Board up to that time. The options have a term of 5 years and have an exercise price equal to the closing price of the Company’s common stock on The OTC Markets on the day immediately preceding the grant date.

 

Restricted Stock Units

 

A summary of the RSUs awarded to employees, directors and consultants under the 2017 Equity Plan during the six months ended June 30, 2021, are presented in the table below:

  

 

Number of

Units

  

Weighted

Average

Grant-Date

Fair Value

  

Aggregate

Intrinsic

Value

 
           
Outstanding, December 31, 2020   -       $        - 
Granted   -         
Vested and settled with share issuance   -         
Forfeited/canceled   -         
Outstanding, June 30, 2021   -       $- 

 

For the six months ended June 30, 2021 and June 30, 2020, the Company recorded $0 and $25,163, respectively, as compensation expense related to vested RSUs issued to employees, directors and consultants.

 

Effective April 30, 2020, 800,000 RSUs vested. However, the holder elected to cancel the RSUs.

 

2021 Equity Incentive Plan

 

On March 22, 2021, the Board approved the 2021 Equity Incentive Plan (the “2021 Plan”), which permits the Board to grant awards of up to 100,000,000 shares of common stock, subject to and effective upon stockholder approval. The 2021 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), non-qualified stock options, stock appreciation rights (“SARs”), restricted stock awards and restricted stock unit awards and other equity linked awards to our employees, consultants and directors. If an equity award (i) expires or otherwise terminates without having been exercised in full or (ii) is settled in cash (i.e., the holder of the award receives cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares of common stock that may be issued pursuant to this Plan.

 

The 2021 Plan was approved by stockholders at the Annual General Meeting of Stockholders held on July 22, 2021.

 

 

Surna Inc.

Notes to Condensed Consolidated Financial Statements

(in US Dollars except share numbers)

(Unaudited)