XML 26 R14.htm IDEA: XBRL DOCUMENT

Note 8 - Share-based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Text Block]

8. Share-based compensation

As of September 30, 2021, the Company maintains two share-based incentive plans: the Cogint, Inc. 2015 Stock Incentive Plan and the Fluent, Inc. 2018 Stock Incentive Plan (the "2018 Plan") which, combined, authorize the issuance of 21,392,864 shares of common stock. As of September 30, 2021, there were 1,015,494 shares of common stock reserved for issuance under the 2018 Plan. The primary purpose of the plans is to attract, retain, reward and motivate certain individuals by providing them with opportunities to acquire or increase their ownership interests in the Company.

Stock options

The Compensation Committee of the Company's Board of Directors approved the grant of stock options to certain Company executives, which were issued on February 1, 2019, December 20, 2019, March 1, 2020 and March 1, 2021 respectively, under the 2018 Plan. Subject to continuing service, 50% of the shares subject to these stock options will vest if the Company's stock price remains above 125.00%, 133.33%, 133.33% and 133.33%, respectively, of the exercise price for twenty consecutive trading days, and the remaining 50% of the shares subject to these stock options will vest if the Company's stock price remains above 156.25%, 177.78%, 177.78% and 177.78%, respectively, of the exercise price for twenty consecutive trading days; provided, that no shares will vest prior to the first anniversary of the grant date. As of September 30, 2021, the first condition for the stock options issued on February 1, 2019, December 20, 2019 and March 1, 2020 had been met and the second condition for the stock options issued on December 20, 2019 and March 1, 2020 had been met. Any shares that remain unvested as of the fifth anniversary of the grant date will vest in full on such date. The fair value of the stock options granted was estimated at the trading day before the date of grant using a Monte Carlo simulation model. The key assumptions utilized to calculate the grant-date fair values for these awards are summarized below:

Issuance Date	February 1, 2019			December 20, 2019			March 1, 2020			March 1, 2021
Fair value lower range	$	2.81		$	1.58		$	1.46		$	4.34
Fair value higher range	$	2.86		$	1.61		$	1.49		$	4.43
Exercise price	$	4.72		$	2.56		$	2.33		$	6.33
Expected term (in years)		1.0 - 1.3			1.0 - 1.6			1.0 - 1.5			1.0 - 1.3
Expected volatility		65	%		70	%		70	%		80	%
Dividend yield		—	%		—	%		—	%		—	%
Risk-free rate		2.61	%		1.85	%		1.05	%		1.18	%

For the nine months ended September 30, 2021, details of stock option activity were as follows:

	*Number of options*			*Weighted average exercise price per share*		*Weighted average remaining contractual term (in years)*		*Aggregate intrinsic value*
Outstanding as of December 31, 2020		2,294,000		$	4.34		8.0	$	2,256
Granted		108,000		$	6.33		9.7		—
Exercised		(198,000	)
Outstanding as of September 30, 2021		2,204,000		$	4.41		7.4	$	—
Options exercisable as of September 30, 2021		1,307,000		$	4.06		7.2	$	—

The aggregate intrinsic value amounts in the table above represent the difference between the closing price of the Company's common stock at the end of the reporting period and the corresponding exercise prices, multiplied by the number of in-the-money stock options as of the same date.

For the nine months ended September 30, 2021, the unvested balance of options was as follows:

	*Number of options*			*Weighted average exercise price per share*		*Weighted average remaining contractual term (in years)*
Unvested as of December 31, 2020		1,225,000		$	3.93		8.4
Granted		108,000		$	6.33		9.7
Vested		(436,000	)
Unvested as of September 30, 2021		897,000		$	4.91		7.6

Compensation expense recognized for stock options of $105 and $73 for the three months ended September 30, 2021 and 2020, respectively, and $395 and $1,424 for the nine months ended September 30, 2021 and 2020, respectively, was recorded in sales and marketing, product development and general and administrative expenses in the consolidated statements of operations. As of September 30, 2021, there was $230 of unrecognized share-based compensation with respect to outstanding stock options.

Restricted stock units and restricted stock

For the nine months ended September 30, 2021, details of unvested RSU and restricted stock activity were as follows:

	*Number of units*			*Weighted average grant-date fair value*
Unvested as of December 31, 2020		3,377,097		$	7.09
Granted		1,684,061		$	4.67
Vested and delivered		(2,381,364	)	$	2.93
Withheld as treasury stock ⁽¹⁾		(143,913	)	$	4.71
Vested not delivered ⁽²⁾		570,335		$	2.70
Forfeited		(291,428	)	$	4.57
Unvested as of September 30, 2021		2,814,788		$	8.64

(1)

As discussed in Note 7, Common stock, treasury stock and warrants, the increase in treasury stock was due to shares withheld to cover statutory withholding taxes upon the delivery of shares following vesting of RSUs. As of September 30, 2021, there were 4,089,780 outstanding shares of treasury stock.

(2)

Vested not delivered represents vested RSUs with delivery deferred to a future time. For the nine months ended September 30, 2021, there was a net decrease of 570,335 shares included in the vested not delivered balance as a result of the delivery of 650,333 shares, partially offset by the vesting of 79,998 shares with deferred delivery election. As of September 30, 2021, 1,691,666 outstanding RSUs were vested not delivered.

Compensation expense recognized for RSUs and restricted stock of $1,063 and $1,131 for the three months ended September 30, 2021 and 2020, respectively, and $3,276 and $3,544 for the nine months ended September 30, 2021 and 2020, respectively, was recorded in sales and marketing, product development and general and administrative in the consolidated statements of operations, and intangible assets in the consolidated balance sheets. The fair value of the RSUs and restricted stock was estimated using the closing prices of the Company's common stock on the dates of grant.

As of September 30, 2021, unrecognized share-based compensation expense associated with the granted RSUs and stock options amounted to $8,716, which is expected to be recognized over a weighted average period of 2.1 years.

For the three and nine months ended September 30, 2021 and 2020, share-based compensation for the Company's stock option, RSU, common stock and restricted stock awards were allocated to the following accounts in the consolidated financial statements:

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2021*		*2020*		*2021*		*2020*
Sales and marketing	$	188	$	172	$	560	$	659
Product development		167		291		668		814
General and administrative		790		707		2,349		3,375
Share-based compensation expense		1,145		1,170		3,577		4,848
Capitalized in intangible assets		23		34		94		120
Total share-based compensation	$	1,168	$	1,204	$	3,671	$	4,968

On May 13, 2021, the Company's then-CEO and then-President purchased a total of 50,000 shares from the Company for cash under the 2018 Stock Incentive Plan. The per share purchase price for each transaction was the closing price reported on Nasdaq on the date of purchase.