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Stock-Based Compensation | 9 Months Ended
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Sep. 30, 2021
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation | Note 7 – Stock-Based Compensation In addition to cash compensation, the Company may compensate certain service providers, including employees, directors, consultants, and other advisors, with equity-based compensation in the form of stock options and restricted stock awards. The Company recognizes all equity-based compensation as stock-based compensation expense based on the fair value of the compensation measured at the grant date. For stock options, fair value is calculated at the date of grant using the Black-Scholes-Merton option pricing model. For restricted stock awards, fair value is the closing stock price for the Company’s common stock on the grant date. The expense is recognized over the vesting period of the grant. For the periods presented, all stock-based compensation expense was classified as a component within selling, general and administrative expense in the Company’s consolidated statements of operations. The amount of stock-based compensation expense is as follows (amounts in thousands): Schedule of Stock-based Compensation Expense
|  | Three months ended September 30, |  |  | Nine months ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Stock options |  | $ | 42 |  |  | $ | 24 |  |  | $ | 96 |  |  | $ | 77 |
Stock awards |  |  | 126 |  |  |  | 1 |  |  |  | 126 |  |  |  | 3 |
Total |  | $ | 168 |  |  | $ | 25 |  |  | $ | 222 |  |  | $ | 80 |
During the three months ended September 30, 2021, no stock options were awarded. During the nine months ended September 30, 2021, the Company awarded stock options to purchase 17,000 shares of the Company’s common stock at an exercise price of $14.77 to employees of the Company. During the three months ended September 30, 2021, the Company awarded 10,000 shares of the Company’s common stock at a fair market value price of $12.62 per share to an employee of the Company. No additional shares were awarded during the nine months ended September 30, 2021. During the three months ended September 30, 2020, the Company awarded stock options to purchase 2,000 shares of the Company’s common stock at an exercise price of $7.20 per share to the members of the Company’s Board of Directors. During the nine months ended September 30, 2020, the Company awarded stock options to purchase 7,000 shares of the Company’s common stock at an exercise price of $7.20 to $8.20 per share to employees of the Company (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020). Where Food Comes From, Inc. Notes to the Consolidated Financial Statements (Unaudited) The Company estimated the fair value of stock options using the Black-Scholes-Merton option pricing model with the following assumptions (all share amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): Schedule of Estimated Fair Value of Stock Options
|  | Nine months ended September 30, |
|  | 2021 |  |  | 2020 |
Number of options awarded to purchase common shares |  |  | 17,000 |  |  |  | 7,000 |
Risk-free interest rate |  |  | 0.82 | % |  |  | 1.19 | %
Expected volatility |  |  | 70.06 | % |  |  | 94.7 | %
Assumed dividend yield |  |  | N/A |  |  |  | N/A |
Expected life of options from the date of grant |  |  | 9.8 years |  |  |  | 9.8 years |
The estimated unrecognized compensation cost from unvested awards which will be recognized ratably over the remaining vesting phase is as follows (amounts in thousands): Schedule of Unrecognized Compensation Cost from Unvested Awards
Years ended December 31st: |  | Total unrecognized compensation expense |
2021 (remaining three months) |  | $ | 37 |
2022 |  |  | 98 |
2023 |  |  | 40 |
2024 |  |  | 11 |
|  | $ | 186 |
Equity Incentive Plans Our 2006 Equity Incentive Plan (the “2006 Plan”) and 2016 Equity Incentive Plan (the “2016 Plan,” and together with the 2006 Plan, the “Plans”) provide for the issuance of stock-based awards to employees, officers, directors and consultants. The Plans permit the granting of stock awards and stock options. The vesting of stock-based awards is generally subject to the passage of time and continued employment through the vesting period. Where Food Comes From, Inc. Notes to the Consolidated Financial Statements (Unaudited) Stock Option Activity Stock option activity under our Equity Incentive Plans is summarized as follows (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): Schedule of Stock Option Activity
|  |  |  |  |  |  |  |  |  |  | Weighted avg. |  |  |  |
|  |  |  |  | Weighted avg. |  |  | Weighted avg. |  |  | remaining |  |  |  |
|  | Number of |  |  | exercise price |  |  | grant date fair |  |  | contractual life |  |  | Aggregate |
|  | awards |  |  | per share |  |  | value per share |  |  | (in years) |  |  | intrinsic value |
Outstanding, December 31, 2020 |  |  | 105,086 |  |  | $ | 6.25 |  |  | $ | 6.06 |  |  |  | 5.38 |  |  | $ | 814,090 |
Granted |  |  | 17,000 |  |  | $ | 14.77 |  |  | $ | 10.90 |  |  |  | 10.00 |  |  |  |  |
Exercised |  |  | (18,045 | ) |  | $ | 2.54 |  |  | $ | 13.39 |  |  |  | 1.40 |  |  |  |  |
Expired/Forfeited |  |  | (2,556 | ) |  | $ | 7.18 |  |  | $ | 6.88 |  |  |  | 6.98 |  |  |  |  |
Outstanding, September 30, 2021 |  |  | 101,485 |  |  | $ | 8.31 |  |  | $ | 7.49 |  |  |  | 6.07 |  |  | $ | 547,544 |
Exercisable, September 30, 2021 |  |  | 73,513 |  |  | $ | 6.95 |  |  | $ | 6.81 |  |  |  | 4.95 |  |  | $ | 481,516 |
Unvested, September 30, 2021 |  |  | 27,972 |  |  | $ | 11.91 |  |  | $ | 9.29 |  |  |  | 9.00 |  |  | $ | 66,028 |
The aggregate intrinsic value represents the total pre-tax intrinsic value (the aggregate difference between the closing price of our common stock on September 30, 2021 and the exercise price for the in-the-money options) that would have been received by the option holders if all the in-the-money options had been exercised on September 30, 2021. Restricted Stock Activity Restricted stock activity under our Equity Incentive Plans is summarized as follows (all share and dollar amounts have been adjusted to reflect the 1-for-4 reverse split that occurred in December 2020): Schedule of Restricted Stock Activity Under Equity Incentive Plan
|  |  |  |  | Weighted avg. |
|  | Number of |  |  | grant date |
|  | options |  |  | fair value |
Non-vested restricted shares, December 31, 2020 |  |  | 1,250 |  |  | $ | 10.20 |
Granted |  |  | - |  |  | $ | - |
Vested |  |  | (1,250 | ) |  | $ | 10.20 |
Forfeited |  |  | - |  |  | $ | - |
Non-vested restricted shares, September 30, 2021 |  |  | - |  |  | $ | - |

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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