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STOCK-BASED COMPENSATION PLANS

6 Months Ended

Jun. 30, 2021

(4) STOCK-BASED COMPENSATION PLANS

In June 2017, our stockholders approved the 2017 Stock Incentive Plan (the “2017 Stock Plan”) with a maximum of 5,000,000 shares reserved for issuance. Awards permitted under the 2017 Stock Plan include: Stock Options and Restricted Stock. Awards issued under the 2017 Stock Plan are at the discretion of the Board of Directors. As applicable, awards are granted with an exercise price equal to the closing price of our common stock on the date of grant and generally vest over four years. Restricted Stock Awards are issued to the recipient upon grant and are not included in outstanding shares until such vesting and issuance occurs.

During the three and six months ended June 30, 2021, no stock option awards were granted under the 2017 Stock Plan. During the three months ended June 30, 2020, no stock option awards were granted under the 2017 Stock Plan. During the six months ended June 30, 2020, 14,000 stock option awards were granted under the 2017 Stock Plan. At June 30, 2021, the company had 0.7 million stock options outstanding and 0.6 million exercisable under the following plans:


	Outstanding	Exercisable
	Number of Options	Number of Options
	(in thousands)	(in thousands)
Plan Category
2005 Stock Option Plan	295		295
Equity Compensation Plans not approved by Shareholders	37		37
2017 Stock Option Plan	412		265
Total	744		597

During the three and six months ended June 30, 2021, 30,000 and 95,000 shares of restricted stock were granted to the Board of Directors and management under the 2017 Stock Plan, respectively. During the three and six months ended June 30, 2020, 38,000 and 208,000 shares of restricted stock were granted to the Board of Directors and management under the 2017 Stock Plan, respectively. The fair market value of restricted shares for share-based compensation expensing is equal to the closing price of our common stock on the date of grant. The vesting on the Restricted Stock Awards typically occur quarterly over three years for the Board of Directors and quarterly or annually over two to four years for management.

The following summarizes stock-based compensation expenses recorded in the consolidated statements of operations (in thousands):


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Cost of Revenue	$	15	$	2	$	30	$	9
Sales and marketing expense		15		98		30		127
General, and administrative		371		479		449		940
Total stock based compensation expense		401		579		509		1,076

The Company received proceeds of $0.1 million related to option exercises during each of the three and six months ended June 30, 2021, respectively. The Company received proceeds of $0.1 million and $0.3 million related to option exercises during the three and six months ended June 30, 2020, respectively.

The Company did not grant any stock options during the three and six months ended June 30, 2021, nor during the three months ended June 30, 2020. The Company used the Black Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions for the six months ended June 30, 2020:


Expected term (years)	6.79
Risk-free interest rate	1.59	%
Expected volatility	116.76	%
Expected dividend yield	—	%

A summary of stock option activity under all equity compensation plans for the six months ended June 30, 2021, is presented below:


				Weighted-
		Weighted-		Average	Aggregate
	Number of	Average		Remaining	Intrinsic
	Shares	Exercise		Contractual	Value
	(in thousands)	Price		Term (Years)	(in thousands)
Outstanding at December 31, 2020	1,006	$	3.04	6.47	$	10,483
Forfeited	(190)	$	7.34
Exercised	(72)	$	6.90
Outstanding at June 30, 2021	744	$	1.57	5.29	$	10,386

Exercisable at June 30, 2021	597	$	1.01	4.78	$	8,674

A summary of restricted stock award activity under all equity compensation plans for the six months ended June 30, 2021, is presented below:


		Number of
		Shares
		(in thousands)
Granted but not vested at December 31, 2020		268
Granted		95
Forfeited		(68)
Vested		(71)
Granted but not vested at June 30, 2021		224

As of June 30, 2021, the Company had approximately $3.4 million of unrecognized compensation expense related to stock options and restricted stock awards that will be recognized over a weighted average period of approximately 2.4 years.