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STOCK-BASED COMPENSATION PLANS

3 Months Ended

Mar. 31, 2022

(7) STOCK-BASED COMPENSATION PLANS

In June 2017, the Company’s stockholders approved the 2017 Stock Incentive Plan (the “2017 Stock Plan”) with a maximum of 5.5 million 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 the Company’s common stock on the date of grant and generally vest over four years. Restricted Stock Awards are issued to the recipient upon vesting and are not included in outstanding shares until such vesting and issuance occurs.

During the three months ended March 31, 2022 and 2021, no stock option awards were granted under the 2017 Stock Plan. At March 31, 2022, the Company had 0.8 million stock options outstanding and 0.7 million exercisable under the following plans:


	Outstanding	Exercisable
	Number of Options	Number of Options
	(in thousands)	(in thousands)
Plan Category
2005 Stock Option Plan	324		324
Equity compensation plans not approved by shareholders	28		28
2017 Stock Option Plan	412		351
Total	764		703

During the three months ended March 31, 2022, 48,000 shares of restricted stock were granted to management under the 2017 Stock Plan. During the three months ended March 31, 2021, 72,000 shares of restricted stock were granted to management. The fair market value of restricted shares for share-based compensation expensing is equal to the closing price of the Company’s common stock on the date of grant. The vesting on the Restricted Stock is typically released quarterly over three years for the Board of Directors and annually or quarterly over two or four years for management.

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


	For the Three Months Ended March 31,
	2022		2021
Cost of Revenue	$	15	$	15
Sales and marketing expense		59		15
General, and administrative		515		78
Total stock based compensation expense	$	589	$	108

The Company received proceeds of $3,000 and $27,000 related to option exercises during the three months ended March 31, 2022 and 2021, respectively.

A summary of stock option activity under all equity compensation plans for the three months ended March 31, 2022, 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, 2021	765	$	1.36	4.68	$	5,896
Exercised	(1)	$	2.94
Outstanding at March 31, 2022	764	$	1.36	4.43	$	3,780

Exercisable at March 31, 2022	703	$	1.11	4.21	$	3,627

No stock option awards were granted or forfeited during the three months ended March 31, 2022.

A summary of restricted stock award activity under all equity compensation plans for the three months ended March 31, 2022, is presented below:


	Number of		Weighted
	Shares		Average Grant
	(in thousands)		Date Fair Value
Granted but not vested at December 31, 2021	454	$	13.69
Granted	48
Forfeited	(11)
Vested	(38)
Granted but not vested at March 31, 2022	453		12.80

As of March 31, 2022, the Company had approximately $5.1 million of unrecognized compensation expense related to stock options and restricted stock awards that will be recognized over a weighted average period of approximately 2.6 years.