XML 30 R19.htm IDEA: XBRL DOCUMENT v3.23.1
NOTE 6 — Stock-Based Compensation Plan (Policies)
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Program

Stock-Based Compensation Program

The Company has one share-based compensation plan in effect in the two years presented: the 2004 Equity Incentive Plan (the “2004 Plan”). The 2004 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, stock appreciation rights, and performance awards to employees, directors, and consultants of the Company. Upon ratification of the 2004 Plan by the shareholders in June 2004, shares in the 1995 Plan that had been reserved but not issued, as well as any shares issued that would otherwise return to the 1995 Plan as a result of termination of options or repurchase of shares, were added to the shares reserved for issuance under the 2004 Plan. The Company grants incentive stock options and restricted stock at an exercise price per share equal to the fair market value per share of common stock on the date of grant. The vesting and exercise provisions are determined by the Board of Directors, with a maximum term of ten years. The termination date of 2004 Plan was approved to extend from April 23, 2024 to April 23, 2034 at our annual meeting of shareholders in June 2022.

 

The 2004 Plan provides for an annual increase in the number of shares authorized under the plan to be added on the first day of each fiscal year equal to the least amount of 400,000 shares, 4% of the outstanding shares on that date, or an amount as determined by the Board of Directors. On January 1, 2023 and 2022, a total of 283,587 and 287,355 additional shares, respectively, became available for grant from the 2004 Plan.
Stock-Based Compensation Information

Stock-Based Compensation Information

The stock-based compensation expense included in the Company’s statements of income for the years ended December 31, 2022 and 2021, consisted of the following:

 

 

                 
    Years Ended December 31,
Income Statement Classification   2022   2021
  Cost of revenues   $ 119,456     $ 96,254  
  Research and development     313,904       218,559  
  Sales and marketing     251,862       166,266  
  General and administrative     313,470       212,346  
  Stock-based compensation expenses   $ 998,692   $ 693,425

 

 

As of December 31, 2022, the remaining unamortized stock-based compensation expense was $2,149,926 and is expected to be amortized over a weighted average period of 2.7 years.

 

Stock Options – Stock option awards have an exercise price equal to the closing price on the date of grant, expire in ten years from the date of grant and vest over a four-year period at 25% per year. The Company calculates the value of each stock option grant, estimated on the date of grant, using binomial lattice option pricing model. The weighted-average estimated fair value of stock options granted during 2022 and 2021 was $1.74 and $4.46, respectively, using the following weighted-average assumptions:

 

 

 

                 
    Years Ended December 31,
    2022   2021
Risk-free interest rate (%)     3.22 %     1.64 %
Dividend yield     —         —    
Volatility factor     105.44 %     102.26 %
Expected option life (years)     2.0       3.9  

 

The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant; the dividend yield is calculated as the ratio of dividends paid per share of common stock to the stock price on the date of grant; the expected life is based on historical and expected exercise behavior; and volatility is based on the historical volatility of the Company’s stock price over the expected life of the option.

 

The table below presents the information related to stock option activity for the years ended December 31, 2022 and 2021:

                 
    Years Ended December 31,
    2022   2021
Total intrinsic value of stock options exercised   $ 164,176     $ 9,985,639  
Cash received from stock option exercises   $ 151,749     $ 1,899,561  

 

 

SOCKET MOBILE, INC.

NOTES TO FINANCIAL STATEMENTS

 

The following summarizes stock option activity under the 2004 Plan as of and for the years ended December 31, 2022 and 2021:

 

    Outstanding Options

 

 

    

 

Number

of Shares

  

Weighted

Average

Exercise Price Per Share

 Remaining Contractual Term
(in years)

 

 

Intrinsic
Value

Balance as of December 31, 2020     1,994,806   $     2.42    
   Granted     182,000   $     6.39    
   Exercised     (782,633)   $     2.43    
   Canceled     (16,051)   $     2.41    
Balance as of December 31, 2021     1,378,122   $     2.81    
   Granted     49,000   $     3.03    
   Exercised     (106,190)   $     1.43    
   Canceled     (24,210)   $     3.12    
Balance as of December 31, 2022     1,296,722   $     2.93 5.33 $    148,165
Exercisable     1,096,381   $     2.61 4.83 $    147,896
Unvested     200,341   $     4.71 8.17 $           269
Outstanding, Remaining contractual term (in years)           5.33  
Outstanding, Intrinsic Value             148,165
Exercisable, Remaining Contractual term (in years)           4.83  
Exercisable, Intrinsic Value             147,896
Unvested, Remaining contractual term (in years)           8.17  
Unvested, Intrinsic Value             269

 

  

Stock options outstanding as of December 31, 2022 are summarized below:

 

    Options Outstanding   Options Exercisable

 

Range of

Exercise

Prices

  

 

Number of

Options Outstanding

   Weighted Average Remaining Life (Years)  

Weighted

Average Exercise Price

  

 

Number of Options Exercisable

  

Weighted Average Exercise Price

$0.95 - $1.25   150,338   2.50   $     1.06   150,338   $     1.06
$1.50 - $1.90   207,825   4.42   $     1.85   198,851   $     1.85
$2.00 - $2.32   349,196   5.75   $     2.30   304,286   $     2.29
$2.40 - $2.75   138,775   4.42   $     2.63   138,775   $     2.63
$2.93 - $2.95   107,824   5.75   $     2.93   100,324   $     2.93
$3.05 - $4.22   160,690   5.50   $     3.82   130,690   $     3.99
$4.49 - $8.58   182,074   8.42   $     6.39   73,117   $     6.23
$0.95 - $8.58   1,296,722   5.33   $     2.93   1,096,381   $     2.61

 

Restricted stock – The Company issues restricted stocks to employees and consultants and holds shares of such stock in escrow until the shares vest on the schedule of 15% after year one, 20% after year two, 25% after year three and 40% after year four, subject to the employees and consultants being a continuing service provider on the vesting dates. If the service or employment is terminated, unvested shares revert to the Company. Shares are registered at grant, so share owners may vote at the annual stockholder meeting. Shares of restricted stocks are granted at zero cost basis. Compensation cost of the shares of restricted stocks issued by the Company is recognized on a straight-line basis over the 4-year vesting period.

 

 

SOCKET MOBILE, INC.

NOTES TO FINANCIAL STATEMENTS

 

The following summarizes information related to restricted stock activity under the 2004 Plan for the years ended December 31, 2022 and 2021:

 

       
  Number of Restricted Stocks   Weighted
Average
Price Per Share
  Unvested as of December 31, 2020     442,200     $ 1.58  
     Granted     312,112     $ 2.89  
     Vested     (59,659 )   $ 1.65  
     Forfeited     (48,528 )   $ 2.00  
  Unvested as of December 31, 2021     646,125     $ 2.18  
     Granted     330,700     $ 3.82  
     Vested     (111,719 )   $ 2.11  
     Forfeited     (20,130 )   $ 2.29  
  Unvested as December 31, 2022     844,976     $ 2.84