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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2022
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, stock awards 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 stock awards and 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.

 

 

Where Food Comes From, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

 

The amount of stock-based compensation expense is as follows (amounts in thousands):

 

   2022   2021   2022   2021 
   Three months ended September 30,   Nine months ended September 30, 
   2022   2021   2022   2021 
Stock options  $19   $42   $82   $95 
Stock awards   -    126    20    126 
Restricted stock awards   -    -    -    1 
Total  $19   $168   $102   $222 

 

During the three and nine months ended September 30, 2022, no stock options were awarded. 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. No other stock awards or options were granted during the nine months ended September 30, 2021.

 

During the three months ended September 30, 2022, no shares of the Company’s common stock were awarded to employees. During the nine months ended September 30, 2022, the Company awarded 1,500 shares of the Company’s common stock at a fair market value price of $13.45 per share to an employee 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.

 

The estimated unrecognized compensation cost from unvested awards which will be recognized ratably over the remaining vesting phase is as follows (amounts in thousands):

 

Years ended December 31st:  Unvested stock options   Unvested restricted stock awards   Total unrecognized compensation expense 
2022 (remaining three months)  $      16   $      -   $      16 
2023   40    -    40 
2024   11    -    11 
2025   -    -    - 
   $67   $-   $67 

 

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:

 

 
 
 		  
 
 		  
Number of
awards		  
 
 		  
 
 		 Weighted
avg.
exercise
price per share		  
 
 		  
 
 		 Weighted avg.
grant date fair
value per share		  
 
 		  
 
 		 Weighted avg.
remaining contractual
life (in years)		  
 
 		  
 
 		  
Aggregate
intrinsic value		  
 
 
                     
Outstanding, December 31, 2021   100,235   $8.36   $7.53    5.88   $620,445 
Granted   -   $-   $-    -      
Exercised   (4,000)  $4.85   $4.84    0.09      
Expired/Forfeited   -   $-   $-    -      
Outstanding, September 30, 2022   96,235   $8.67   $7.64    5.56   $178,195 
Exercisable, September 30, 2022   82,578   $7.82   $7.22    5.04   $174,268 
Unvested, September 30, 2022   13,657   $13.61   $10.22    8.55   $3,927 

 

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, 2022 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, 2022.

 

Stock Activity

 

Non-vested stock award activity under our Equity Incentive Plans is summarized as follows:

 

       Weighted avg. 
   Number of   grant date 
   shares   fair value 
Non-vested shares, December 31, 2021   -   $- 
Granted   1,500   $13.45 
Vested   (1,500)  $13.45 
Forfeited   -   $- 
Non-vested shares, September 30, 2022   -   $-