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Stock-Based Compensation and Stock Repurchases | 9 Months Ended
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Sep. 30, 2022
Stock-Based Compensation and Stock Repurchases [Abstract] |
Stock-Based Compensation and Stock Repurchases | Note 16 – Stock-Based Compensation and Stock Repurchases Employee and Director Stock Incentive Plan 2010 Stock Incentive Plan Our 2010 Stock Incentive Plan (as amended, the “2010 Plan”) under which our Company has granted stock options and other share-based payment awards of our Common Stock to eligible employees, directors, and consultants has expired. In total, 1,315,481 shares of Class A Common Stock were issued or reserved for issuance pursuant to the previously granted options or restricted stock units under that plan. 2020 Stock Incentive Plan On November 4, 2020, the Company enacted the 2020 Stock Incentive Plan, which was also approved by the Company’s stockholders on December 8, 2020 (the “2020 Plan”). Under the 2020 Plan, the Company may grant stock options and other share-based payment awards of our Class A Common Stock to eligible employees, directors and consultants. The aggregate total number of shares of Class A Common Stock authorized for issuance under the 2020 Plan at September 30, 2022, was 1,250,000, of which 308,638 remain available for future issuance. In addition, if any awards that were outstanding under the 2010 Plan are subsequently forfeited or if the related shares are repurchased, a corresponding number of shares will automatically become available for issuance under the 2020 Plan, thus resulting in a potential increase in the number of shares available for issuance under the 2020 Plan. At September 30, 2022, this potential increase in the number of shares eligible for issuance under the 2020 Plan was 422,248 Class A Common Stock. Stock options are granted at exercise prices equal to the grant-date market prices and typically expire no later than five years from the grant date. In contrast to a stock option where the grantee buys our Company’s share at an exercise price determined on the grant date, a restricted stock unit (“RSU”) entitles the grantee to receive one share for every RSU based on a vesting plan, typically between one year and four years from grant. As discussed further below, a performance component has been added to certain of the RSUs granted to management. At the time the options are exercised or RSUs vest and are settled, at the discretion of management, we will issue treasury shares or make a new issuance of shares to the option or RSU holder. Stock Options We have estimated the grant-date fair value of our stock options using the Black-Scholes option-valuation model, which takes into account assumptions such as the dividend yield, the risk-free interest rate, the expected stock price volatility, and the expected life of the options. We expensed the estimated grant-date fair values of options over the vesting period on a straight-line basis. Based on our historical experience, the “deemed exercise” of expiring in-the-money options and the relative market price to strike price of the options, we have not estimated any forfeitures of vested or unvested options. No stock options were issued in the nine months ended September 30, 2022. For the quarters ended September 30, 2022, and 2021, we recorded compensation expense of $53,000 and $101,000, respectively, with respect to our prior stock option grants. For the nine months ended September 30, 2022, and September 30, 2021, we recorded compensation expense of $159,000 and $302,000, respectively. At September 30, 2022, the total unrecognized estimated compensation expense related to non-vested stock options was $0.1 million, which we expect to recognize over a weighted average vesting period of 0.65 years. The intrinsic, unrealized value of all options outstanding vested and expected to vest, at September 30, 2022, was $nil, as the closing price of our Common Stock on that date was $3.29. The following table summarizes the number of options outstanding and exercisable as of September 30, 2022, and December 31, 2021:
|  | Outstanding Stock Options - Class A Shares
|  | Number ‎of Options |  | Weighted ‎Average ‎Exercise Price |  | Weighted ‎Average ‎Remaining ‎Years of ‎Contractual ‎Life |  | Aggregate ‎Intrinsic ‎Value
|  | Class A |  | Class A |  | Class A |  | Class A
Balance - December 31, 2020 |  | 713,479 |  | $ | 14.64 |  | 2.18 |  | $ | 13,969
Granted |  | — |  |  | — |  | — |  |  | —
Exercised |  | (38,803) |  |  | 4.66 |  | — |  |  | 63,831
Forfeited |  | (157,332) |  |  | 11.87 |  | — |  |  | —
Balance - December 31, 2021 |  | 517,344 |  | $ | 15.42 |  | 1.66 |  | $ | —
Granted |  | — |  |  | — |  | — |  |  | —
Exercised |  | — |  |  | — |  | — |  |  | —
Forfeited |  | (189,846) |  |  | 12.19 |  | — |  |  | —
Balance - September 30, 2022 |  | 327,498 |  | $ | 15.75 |  | 1.33 |  | $ | —
Restricted Stock Units The following table summarizes the status of unvested RSUs granted to date as of September 30, 2022:
|  | Outstanding Restricted Stock Units
|  | RSU Grants (in units) |  |  |  | Vested, |  | Unvested, |  | Forfeited,
Grant Date |  | Directors |  | Management |  | Total ‎Grants |  | September 30, 2022 |  | September 30, 2022 |  | September 30, 2022
Opening balance |  | 118,231 |  | 118,060 |  | 236,291 |  | 231,804 |  | — |  | 4,487
March 13, 2019 |  | — |  | 24,366 |  | 24,366 |  | 15,947 |  | 5,315 |  | 3,104
March 14, 2019 |  | — |  | 23,327 |  | 23,327 |  | 17,496 |  | 5,831 |  | —
May 7, 2019 |  | 11,565 |  | — |  | 11,565 |  | 11,565 |  | — |  | —
March 10, 2020 |  | — |  | 287,163 |  | 287,163 |  | 96,828 |  | 189,517 |  | 818
December 14, 2020 |  | — |  | 43,260 |  | 43,260 |  | 42,084 |  | — |  | 1,176
December 16, 2020 |  | 60,084 |  | 11,459 |  | 71,543 |  | 71,543 |  | — |  | —
April 5, 2021 |  | — |  | 262,830 |  | 262,830 |  | 45,403 |  | 217,427 |  | —
April 19, 2021 |  | — |  | 22,888 |  | 22,888 |  | 5,536 |  | 16,276 |  | 1,076
August 11, 2021 |  | 26,924 |  | — |  | 26,924 |  | 26,924 |  | — |  | —
December 8, 2021 |  | 48,951 |  | — |  | 48,951 |  | — |  | 48,951 |  | —
April 18, 2022 |  | — |  | 428,899 |  | 428,899 |  | — |  | 428,415 |  | 484
Total |  | 265,755 |  | 1,222,252 |  | 1,488,007 |  | 565,130 |  | 911,732 |  | 11,145
RSU awards to management vest 25% on the anniversary of the grant date over a period of four years. Beginning in 2020, a performance component has been added to certain of the RSUs granted to management, which vest on the third anniversary of their grant date based on the achievement of certain performance metrics. On March 10, 2020, RSUs covering 287,163 shares were issued to members of executive management and other employees of our Company. Between December 14, 2020, and December 16, 2020, RSUs covering 114,803 shares were issued to members of executive management and other employees of our Company, all of which vested 100% on December 14 and 16, 2021, as applicable. In addition, w e granted non-employee directors 60,084 RSUs (as well as 38,803 options) on December 16, 2020. In April 2021, RSUs covering 262,830 shares were issued to members of executive management. These RSUs have two structures, which include time vesting and performance vesting. The majority of RSUs vest 75% evenly over a period of four years, with the remaining 25% contingent upon the achievement of certain performance metrics, vesting in full on the third anniversary of the date of the grant. In the case of our Chief Executive Officer, RSUs vest 50% evenly over a period of four years with the remaining 50%, contingent upon the achievement of certain performance metrics, vesting in full on the third anniversary of the grant date. RSUs covering 22,888 shares were also issued to other employees of our Company. These awards vest 25% on the anniversary of the grant date over a period of four years. On August 11, 2021, and December 8, 2021, RSUs covering 26,924 and 48,951 shares, respectively, were issued to non-employee directors. On April 18, 2022, RSUs covering 428,899 shares were issued to members of executive management and other employees of our company. The RSUs issued to non-employee directors on May 7, 2019, vested on May 6, 2020. The RSUs issued to non-employee directors on August 11, 2021, vested on December 8, 2021. The RSUs issued to non-employee directors on December 8, 2021, will vest on the first to occur of (i) 5:00 pm, Los Angeles, CA time on the last business day prior to the one-year anniversary of the Grant Date or (ii) the date on which the Recipient has served such Recipient’s full term as a Director (December 8, 2022). For the quarters ended September 30, 2022, and 2021, we recorded compensation expense of $444,000 and $505,000, respectively. For the nine months ended September 30, 2022, and September 30, 2021, we recorded compensation expense of $1.2 million and $1.3 million, respectively. The total unrecognized compensation expense related to the non-vested RSUs was $3.5 million as of September 30, 2022, which we expect to recognize over a weighted average vesting period of 1.65 years. Stock Repurchase Program On March 2, 2017, our Company’s Board of Directors authorized management, at its discretion, to spend up to an aggregate of $25.0 million to acquire shares of Reading’s Class A Common Stock. On March 14, 2019, the Board of Directors extended this stock buy-back program for two years, through March 2, 2021. On March 10, 2020, the Board increased the authorized amount by $25.0 million and extended it to March 2, 2022. At the present time, the amount available under the repurchase program authorization is $26.0 million. On May 5, 2022, the Board extended the program for two years, to March 10, 2024, making no changes to the available amount. The repurchase program allows Reading to repurchase its shares in accordance with the requirements of the SEC on the open market, in block trades and in privately negotiated transactions, depending on market conditions and other factors. All purchases are subject to the availability of shares at prices that are acceptable to Reading, and accordingly, no assurances can be given as to the timing or number of shares that may ultimately be acquired pursuant to this authorization. Under the stock repurchase program, as of September 30, 2022, our Company had acquired a total of 1,792,819 shares of Class A Common Stock for $24.0 million at an average price of $13.39 per share (excluding transaction costs). No shares of Class A Common Stock were purchased in the quarter ended September 30, 2022. The last share repurchase made by our Company was made on March 5, 2020, at which time 25,000 shares were purchased at an average cost per share of $7.30. This leaves $26.0 million available under the March 2, 2017, program, as extended, to March 10, 2024.

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