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Equity Incentive Plans
 9 Months Ended
Sep. 30, 2024
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 27,778 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 nine months ended September 30, 2024, no shares or options were issued and 511 options were forfeited under the 2017 Plan.

 

As of September 30, 2024, of the 27,778 shares authorized under the 2017 Plan for equity awards, 13,641 shares have been issued, awards relating to 11,615 options remain outstanding, and 2,522 shares remain available for future equity awards.

 

2021 Equity Incentive Plan

 

On March 22, 2021, the Board approved the 2021 Equity Incentive Plan (the “2021 Equity Plan”), which was approved by the stockholders on July 22, 2021. The 2021 Equity Plan permits the Board to grant awards of up to 55,556 shares of common stock. The 2021 Equity 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.

 

During the nine months ended September 30, 2024:

 

  - The Company issued 11,364 shares of its common stock in settlement of restricted stock units issued to three of its independent directors under the 2021 Equity Incentive Plan, pursuant to the Director Compensation plan adopted on January 17, 2022.
     
  - 3,297 non-qualified stock options were forfeited that had previously been issued under the 2021 Equity Incentive Plan.

 

 

CEA Industries Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2024

(in US Dollars except share numbers)

(Unaudited)

 

As of September 30, 2024, of the 55,556 shares authorized under the 2021 Equity Plan, 22,411 shares have been issued in settlement of restricted stock units, awards relating to 11,104 non-qualified stock options, and 3,401 incentive stock options remain outstanding, and 18,639 shares remain available for future equity awards.

 

There was no unrecognized compensation expense for unvested non-qualified options as of September 30, 2024.

 

Non-Qualified and Incentive Stock Options

 

A summary of the non-qualified stock options and incentive stock options granted to employees and consultants under the 2017 and 2021 Equity Plans during the nine months ended September 30, 2024, are presented in the table below:

 

   Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Term		   Aggregate
Intrinsic
Value		 
                 
Outstanding, December 31, 2023   25,169   $70.40    6.6   $- 
Granted   -   $-    -   $- 
Exercised   -   $-    -   $- 
Forfeited   (3,808)  $38.77    -   $- 
Expired   -   $-    -   $- 
Outstanding, September 30, 2024   21,361   $76.04    5.7   $- 
Exercisable, September 30, 2024   21,361   $76.04    5.7   $- 

 

A summary of non-vested non-qualified stock options activity for employees and consultants under the 2017 and 2021 Equity Plans for the nine months ended September 30, 2024, 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, 2023   833   $26.16   $(21,344)  $21,800 
Granted   -   $-   $-   $- 
Vested   (417)  $26.16   $10,672   $(10,900)
Forfeited   (417)  $26.16   $10,672   $(10,900)
Expired   -   $-   $-   $- 
Nonvested, September 30, 2024   -   $-   $-   $- 

 

For the nine months ended September 30, 2024 and September 30, 2023, the Company recorded $(5,522) and $60,944 as compensation credit and expense related to vested options issued to employees and consultants, net of forfeitures of unvested options issued to employees and consultants, respectively.

 

 

CEA Industries Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2024

(in US Dollars except share numbers)

(Unaudited)

 

A summary of the non-qualified stock options granted to directors under the 2017 and 2021 Equity Plans, during the nine months ended September 30, 2024, 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, 2023   4,760   $113.34    5.0   $- 
Granted   -   $-    -   $- 
Exercised   -   $-    -   $- 
Forfeited/Cancelled   -   $-    -   $- 
Expired   -   $-    -   $- 
Outstanding, September 30, 2024   4,760   $113.34    4.2   $- 
Exercisable, September 30, 2024   4,760   $113.34    4.2   $- 

 

There were no non-vested, non-qualified stock options issued to directors under the 2017 Equity Plan and the 2021 Equity Plan, for the nine months ended September 30, 2024.

 

During the nine months ended September 30, 2024 and September 30, 2023, the Company incurred no compensation expense related to options issued to directors.

 

Restricted Stock Units

 

Effective January 2, 2024, the Company issued a total of 11,364 restricted stock units (RSUs) under the 2021 Equity Plan to three of its independent directors. These RSUs vested upon grant.

 

During the nine months ended September 30, 2024 and September 30, 2023, the Company recorded $75,000 and $101,316, respectively, as compensation expense related to vested RSUs issued to directors.

 

   Number of
Units		   Weighted
Average
Grant-Date
Fair Value		   Aggregate
Intrinsic
Value		 
             
Outstanding, December 31, 2023   -   $-   $- 
Granted   11,364   $6.60   $- 
Vested and settled with share issuance   (11,364)  $6.60   $- 
Forfeited/canceled   -   $-   $- 
Outstanding, September 30, 2024   -   $-   $- 

 

 

CEA Industries Inc.

Notes to Condensed Consolidated Financial Statements

September 30, 2024

(in US Dollars except share numbers)

(Unaudited)