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Stock Options and Restricted Stock Units | 12 Months Ended
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Dec. 31, 2021
Stock Options and Restricted Stock Units |
Note Stock Options and Restricted Stock Units | Note 7: Stock Options and Restricted Stock Units On May 23, 2014, the shareholders of the Company approved the 2014 Equity Incentive Plan (the “2014 Plan”). Under the terms of the 2014 Plan, the Company is authorized to issue incentive awards for common stock up to 200,000 shares to employees and other personnel. On June 10, 2016 and June 17, 2020, the shareholders of the Company approved an additional 200,000 and 200,000 awards, respectively, to be issued under the 2014 Plan, bringing the total number of shares to be awarded to 600,000. The awards may be in the form of incentive stock options, nonqualified stock options, restricted stock, restricted stock units and performance awards. The 2014 Plan is effective through March 31, 2024. As of December 31, 2021, there are 223,818 shares which remain to be granted under the 2014 Plan. The following is a summary of stock options issued during the year ended December 31, 2021 and 2020:
|  | Number of Options Outstanding |  |  | Range of Exercise Price |  |  | Weighted Average Exercise Price |  |  | Aggregate Intrinsic Value |
Balance on December 31, 2019 |  |  | 127,563 |  |  | $ | 6.80 – 17.40 |  |  | $ | 12.63 |  |  | $ | 142,818 |
Options granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Options exercised |  |  | (36,250 | ) |  | 7.76 – 17.40 |  |  |  | 12.47 |  |  |  | 295,921 |
Options forfeited/cancelled |  |  | (16,083 | ) |  | 9.26 – 17.40 |  |  |  | 15.17 |  |  |  | 22,682 |
Balance on December 31, 2020 |  |  | 75,230 |  |  | $ | 6.80 – 17.40 |  |  | $ | 12.16 |  |  | $ | 402,275 |
Options granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Options exercised |  |  | (23,563 | ) |  | 6.80 – 17.40 |  |  |  | 13.01 |  |  |  | 267,300 |
Options forfeited/cancelled |  |  | (4,500 | ) |  | 9.26 – 13.21 |  |  |  | 11.45 |  |  |  | 62,385 |
Balance on December 31, 2021 |  |  | 47,167 |  |  | $ | 6.80 – 17.40 |  |  | $ | 11.81 |  |  | $ | 832,254 |
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e. the aggregate difference between the closing price of the Company’s common stock on December 31, 2021 and 2020 of $29.45 and $17.51, respectively, and the exercise price for in-the-money options) that would have been received by the holders if all instruments had been exercised on December 31, 2021 and 2020. As of December 31, 2021, all stock options were vested and there was not any unrecognized compensation cost related to stock options. The following is a summary of unvested stock options during the year ended December 31, 2021 and 2020:
|  | Number of Options Outstanding |  |  | Weighted Average Exercise Price |  |  | Weighted Average Grant Date Fair Value |
Balance on December 31, 2019 |  |  | 29,000 |  |  | $ | 12.87 |  |  | $ | 5.47 |
Options vested |  |  | (14,500 | ) |  |  | 12.87 |  |  |  | 5.47 |
Options forfeited/cancelled |  |  | - |  |  |  | - |  |  |  | - |
Balance on December 31, 2020 |  |  | 14,500 |  |  | $ | 12.87 |  |  | $ | 5.47 |
Options vested |  |  | (14,500 | ) |  |  | 12.87 |  |  |  | 5.47 |
Options forfeited/cancelled |  |  | - |  |  |  | - |  |  |  | - |
Balance on December 31, 2021 |  |  | - |  |  | $ | - |  |  | $ | - |
The following table summarizes information about stock options outstanding and exercisable on December 31, 2021:
|  | Options Outstanding |  |  | Options Exercisable |
Exercise Price Range |  | Number |  |  | Weighted Average Remaining Contractual Life (in Years) |  |  | Weighted Average Exercise Price |  |  | Number |
$0.01 - 7.00 |  |  | 5,000 |  |  |  | 3.89 |  |  | $ | 6.80 |  |  |  | 5,000 |
$7.01 - 8.00 |  |  | 10,000 |  |  |  | 1.74 |  |  | $ | 7.76 |  |  |  | 10,000 |
$8.01 - 12.00 |  |  | 3,667 |  |  |  | 5.45 |  |  | $ | 10.07 |  |  |  | 3,667 |
$12.01 - 15.00 |  |  | 20,500 |  |  |  | 6.61 |  |  | $ | 13.13 |  |  |  | 20,500 |
$15.01 - 17.40 |  |  | 8,000 |  |  |  | 6.42 |  |  | $ | 17.40 |  |  |  | 8,000 |
Total |  |  | 47,167 |  |  |  | 5.16 |  |  | $ | 11.81 |  |  |  | 47,167 |
Of the 47,167 stock options outstanding, 21,000 are non-qualified stock options. All options have been registered with the SEC. There were no common stock options issued during the years ended December 31, 2021 and 2020. The following is a summary of restricted stock units issued during the years ended December 31, 2021 and 2020:
|  | Number of RSUs Outstanding |  |  | Weighted Average Grant Date Fair Value |  |  | Aggregate Intrinsic Value |
Balance on December 31, 2019 |  |  | 48,002 |  |  | $ | 11.55 |  |  | $ | 554,388 |
Units granted |  |  | 18,000 |  |  |  | 10.67 |  |  |  | 192,060 |
Units vested/issued |  |  | (32,002 | ) |  |  | 11.61 |  |  |  | 353,948 |
Units forfeited |  |  | (15,000 | ) |  |  | 11.35 |  |  |  | 156,665 |
Balance on December 31, 2020 |  |  | 19,000 |  |  | $ | 10.78 |  |  | $ | 332,690 |
Units granted |  |  | 17,765 |  |  |  | 25.92 |  |  |  | 460,504 |
Units vested/issued |  |  | (19,000 | ) |  |  | 10.78 |  |  |  | 464,400 |
Units forfeited |  |  | - |  |  |  | - |  |  |  | - |
Balance on December 31, 2021 |  |  | 17,765 |  |  | $ | 25.92 |  |  | $ | 523,197 |
During the year ended December 31, 2021, the Company granted 17,765 restricted stock units with a grant date fair value of $25.92 per share to certain employees and non-employee members of the Board of Directors of the Company. Non-employee directors were granted 12,765 restricted stock units, which vest on the earlier of the 2022 annual meeting of the shareholders or one year. The other 5,000 restricted stock units were granted to an employee and vest 50% during each of the first and second anniversary dates of the date of grant, which was May 17, 2021. During the year ended December 31, 2021, 19,000 restricted stock units with a grant date fair value of $10.78 vested. As of December 31, 2021, there was $234,000 of unrecognized compensation cost related to unvested restricted stock units, which will be recognized through 2023. All restricted stock units have been registered with the SEC. During the years ended December 31, 2021 and 2020, the Company recorded compensation expense of $333,000 and $273,000, respectively, related to stock options and restricted stock units. Note 8: Leases Generally, leasing activity consists of office leases. In March 2019, a new lease was signed to move the corporate headquarters to Raleigh, North Carolina. The new lease, which had a lease commencement date of October 2, 2019, expires December 31, 2027. Minimum lease payments are $2,997,000, not including a tenant improvement allowance of $488,000, which is included in fixed assets as of December 31, 2021 and 2020. The Company recognized a ROU asset and corresponding lease liability of $2,596,000, which represents the present value of minimum lease payments discounted at 3.77%, the Company’s incremental borrowing rate at lease inception. As of December 31, 2021, the Company had a three-year office lease in Florida. This lease was signed on January 4, 2019, at which time a ROU asset and corresponding lease liability was recognized of $125,000, which represents the present value of minimum lease payments discounted at 4.25%, the Company’s incremental borrowing rate at lease inception. This lease subsequently ended on January 3, 2022 and was not renewed. The Company also has facilities in Salt Lake City, Utah, and New York, which are on short-term leases that are less than twelve months. As a result, the Company elected the short-term lease recognition exemption for these leases, which means, for those leases not expected to extend beyond twelve months, the Company will not recognize ROU assets or lease liabilities. Lease liabilities totaled $2,017,000 and $2,361,000 as of December 31, 2021 and 2020, respectively. The current portion of this liability of $358,000 is included in Accrued expenses on the Consolidated balance sheets and the long-term portion of $1,659,000 is included in Lease liabilities on the Consolidated Balance Sheets. Rent expense consists of both operating lease expense from amortization of ROU assets as well as variable lease expense which consists of non-lease components of office leases (i.e. common area maintenance) or rent expense associated with short- term leases. The components of lease expense were as follows (in 000’s):
|  | Year ended December 31, 2021 |  |  | Year ended December 31, 2020 |
Lease expense |  |  |  |  |  |
Operating lease expense |  | $ | 347 |  |  | $ | 347 |
Variable lease expense |  |  | 116 |  |  |  | 132 |
Rent expense |  | $ | 463 |  |  | $ | 479 |
The weighted-average remaining non-cancelable lease term for operating leases was 6.0 years as of December 31, 2021. As of December 31, 2021, the weighted-average discount rate used to determine the lease liability was 3.77%. The future minimum lease payments to be made under non-cancelable operating leases on December 31, 2021, are as follows (in 000’s):
Year Ended December 31: |  |  |
2022 |  | $ | 359 |
2023 |  |  | 369 |
2024 |  |  | 379 |
2025 |  |  | 389 |
2026 |  |  | 399 |
Thereafter |  |  | 413 |
Total lease payments |  | $ | 2,308 |
Present value adjustment |  |  | (291 | )
Lease liability |  |  | 2,017 |
The Company performed an evaluation of other contracts with customers and suppliers in accordance with Topic 842 and have determined that, except for the leases described above, none of the contracts contain a lease.

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