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STOCK-BASED COMPENSATION PLANS

6 Months Ended

Jun. 30, 2023

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS

(10) STOCK-BASED COMPENSATION PLANS

In June 2017, our stockholders approved the 2017 Stock Incentive Plan (the “2017 Stock Plan”) with a maximum of 5,500,000 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, 2023, no stock option awards were granted under the 2017 Stock Plan. During the three and six months ended June 30, 2022, 200,000 stock option awards were granted under the 2017 Stock Plan. At June 30, 2023, the company had 0.6 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		211		211
2017 Stock Option Plan		351		350
Total		562		561

During the three and six months ended June 30, 2023, 72,000 and 134,000 shares of restricted stock were granted under the 2017 Stock Plan, respectively. During the three and six months ended June 30, 2022, 45,000 and 93,000 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 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 condensed consolidated statements of income (in thousands):


		For the Three Months Ended June 30,						For the Six Months Ended June 30,
		2023			2022			2023			2022
Cost of Revenue		$	7		$	12		$	15		$	27
Sales and marketing expense			69			55			130			114
General, and administrative			584			468			822			983
Total stock based compensation expense		$	660		$	535		$	967		$	1,124

The Company received proceeds of $0.1 million related to option exercises during the three and six months ended June 30, 2023. The Company received proceeds of $0.1 million related to option exercises during each of the three and six months ended June 30, 2022. No stock option awards were granted by the Company during the three and six months ended June 30, 2023.

A summary of stock option activity under all equity compensation plans for the six months ended June 30, 2023, 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, 2022		793		$	2.67		5.03		$	8,908
Granted		—		$	—
Forfeited		(206)		$	6.30
Exercised		(25)		$	5.38
Outstanding at June 30, 2023		562		$	1.23		3.05		$	4,701

Exercisable at June 30, 2023		561		$	1.21		3.04		$	4,699

A summary of restricted stock award activity under all equity compensation plans for the six months ended June 30, 2023, is presented below:


		Number of
		Shares		Weighted Average
		(in thousands)		Grant Date Fair Value
Granted but not vested at December 31, 2022		431		$	11.92
Granted		134			10.81
Forfeited		(4)			12.65
Vested		(88)			12.14
Granted but not vested at June 30, 2023		473		$	11.56

As of June 30, 2023, the Company had approximately $4.5 million of unrecognized compensation expense related to stock options and restricted stock awards that will be recognized over a weighted average period of approximately 2.3 years.