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STOCK BASED COMPENSATION

6 Months Ended

Jun. 30, 2021

8. STOCK-BASED COMPENSATION

Stock-based compensation awards consist of stock options, restricted stock units and bonus shares issued under the Company’s equity incentive plans which include: the 2013 Omnibus Incentive Plan (the “2013 Plan”) and the Amended and Restated 2004 Directors’ Stock Option and Restricted Stock Plan (the “2004 Directors’ Plan”). Upon approval of the 2013 Plan by the Company’s stockholders on June 4, 2013, the Company’s authority to grant new awards under all plans other than the 2013 Plan was terminated. On July 18, 2017, April 18, 2019, April 28, 2020, and May 21, 2021, the Company’s stockholders approved amendments to the 2013 Plan to increase the authorized number of shares of common stock available and reserved for issuance under the 2013 Plan by 20,000 shares, 66,000, 350,000, and 1,500,000 shares, respectively, and in 2017 re-approved the material terms of the performance goals under the plan. Under the 2013 Plan, the Company may grant awards of stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards and cash bonus awards to eligible persons. Equity awards under the 2013 Plan are granted from time to time at the discretion of the Compensation Committee of the Board (the “Committee”), with vesting periods and other

terms as determined by the Committee with a maximum term of 10 years. The 2013 Plan is administered by the Committee, which can delegate the administration to the Board, other Committees or to such other officers and employees of the Company as designated by the Committee and permitted by the 2013 Plan.

As of June 30, 2021, 1,279,774 shares were available for future issuances under the 2013 Plan. For the three and six months ended June 30, 2021, the Company recorded stock-based compensation expense of $0.2 million and $0.3 million, respectively. Stock compensation expense is recorded in general and administrative expenses.

In addition to the plans above, upon closing of the Company’s acquisition of Alabama Graphite in April 2018, the Company issued 50,168 replacement options and warrants to the option and warrant holders of Alabama Graphite. The number of replacement options and warrants was determined using the arrangement exchange rate of 0.0016. The exercise prices for the option and warrant shares were first converted for the exchange rate of 0.0016 and then converted to USD using the exchange rate on December 13, 2017, of 0.77809 (CAD to USD). The options and warrant shares were issued with the same terms and conditions as were applicable prior to the acquisition of Alabama Graphite. As of June 30, 2021, all replacement options and warrants had expired.

Stock Options

The following tables summarize stock options outstanding and changes for the six-month periods ending June 30, 2021, and 2020:


	June 30, 2021			June 30, 2020
		Weighted			Weighted
	Number of	Average		Number of	Average
	Stock	Exercise		Stock	Exercise
	Options	Price		Options	Price
Stock options outstanding at beginning of period	185,054	$	7.99	37,786	$	37.42
Granted	94,522		3.91	125,804		1.59
Expired	(2,000)		73.54	(1,693)		101.64
Stock options outstanding at end of period	277,576	$	6.18	161,897	$	8.91
Stock options exercisable at end of period	183,054	$	7.35	36,093	$	34.41

The following table summarizes stock options outstanding and exercisable by stock option plan at June 30, 2021:


	Outstanding Stock Options			Exercisable Stock Options
	Number of	Weighted		Number of	Weighted
	Outstanding	Average		Stock Options	Average
Stock Option Plan	Stock Options	Exercise Price		Exercisable	Exercise Price
2004 Plan	92	$	1,638.00	92	$	1,638.00
2004 Directors’ Plan	3		10,380.00	3		10,380.00
2013 Plan	277,481		5.67	182,959		6.29
	277,576	$	6.18	183,054	$	7.35

Restricted Stock Units

Time-based and performance-based RSUs are valued using the closing share price of the Company’s common stock on the date of grant. The final number of shares issued under performance-based RSUs is generally based on the Company’s prior year performance as determined by the Compensation Committee of the Board of Directors at each vesting date, and the valuation of such awards assumes full satisfaction of all performance criteria.

The following tables summarizes RSU activity for the six-month periods ended June 30, 2021, and 2020:


	June 30,			June 30,
	2021			2020
		Weighted-			Weighted-
		Average			Average
	Number of	Grant Date		Number of	Grant Date
	RSUs	Fair Value		RSUs	Fair Value
Unvested RSUs at beginning of period	236,403	$	2.10	—	$	—
Granted	184,290		4.13	211,497		2.03
Forfeited	—		—	—		—
Vested	(78,801)		2.10	—		—
Unvested RSUs at end of period	341,892	$	3.08	211,497	$	2.03