Stockholders' Equity

9 Months Ended

Sep. 30, 2021

Stockholders' Equity

Stockholders' Equity

Note 11. Stockholders’ Equity

Warrants

The following table represents the activity related to the Company’s warrants during the nine months ended September 30, 2021.


				Exercise
		No. of Warrants		price range
December 31, 2020		48,044,381		$	0.525 – 300.00
Granted		1,168,088		$	1.70 - 2.125
Exercised		(11,223,529)		$	1.70 - 2.125
Expired		(278)		$	300.00
September 30, 2021		37,988,662		$	0.525 - 6.566

During the nine months ended September 30 2021, holders of the Company’s December 2020 Investor Warrants, December 2020 Placement Agent Warrants and December 2020 Placement Agent Tail Fee Warrants exercised warrants for a total of 11,223,529 common shares. The Company received gross proceeds of approximately $19,161. In accordance with the placement agent agreements with H.C. Wainwright & Co., LLC and Palladium, the Company paid cash fees of $2,154 and issued 842,588 warrants to H.C. Wainwright & Co., LLC at an exercise price of $2.125 per share and 325,500 warrants to Palladium at an exercise price of $1.70 per share.

Share Repurchase Program

On August 31, 2021, the Company’s board of directors authorized a stock repurchase program that permits the purchase and repurchase of up to 15 million shares of its common stock. The new authorization is currently effective and will be in effect through September 15, 2022. Under the new stock repurchase program, management has discretion in determining the conditions under which shares may be purchased from time to time. The program does not require us to repurchase any specific number of shares, and may be modified, suspended or terminated at any time without prior notice. Under the program, the Company purchased and retired 250,000 shares for $450 during the three and nine months ended September 30, 2021.

Stock-based Compensation

In September 2020, the Board of Directors approved a new stock-based compensation plan available to grant stock options, restricted stock and RSU’s to the Company’s directors, employees and consultants. Under the 2020 Equity Incentive Plan (the “2020 Plan”), a maximum of 5,000,000 shares of Common Stock may be issued, subject to receiving shareholder approval which was subsequently obtained on October 28, 2020. The 2012 Plan was terminated upon receipt of shareholder approval of the 2020 Plan.

Awards granted under the 2012 Plan remain in effect pursuant to their terms. Generally, stock options are granted with exercise prices equal to the fair market value on the date of grant, vest in four equal quarterly installments, and expire 10 years from the date of grant. RSUs granted generally vest over a period of one year.

In September 2020, XpresTest created a stock-based compensation plan available to grant stock options, restricted stock and RSU’s to the XpresTest’s directors, employees and consultants. Under the XpresTest 2020 Equity Incentive Plan (the

“XpresTest Plan”), a maximum of 200 shares of XpresTest common stock may be awarded, which would represent 20% of the total number of shares of common stock of XpresTest as of September 30, 2021. Certain named executive officers, consultants, and directors of the Company are eligible to participate in the XpresTest Plan. The XpresTest Plan RSAs vest upon satisfaction of certain service and performance-based conditions. The fair value of the XpresTest Plan RSAs is determined based on the weighted average of (i) Fair Value of XpresTest under the Indirect Valuation Method developing assumptions for XpresSpa Net Market Cap and XpresSpa standalone Fair Value, and (ii) Direct Valuation Method developing assumptions for XpresTest Representative Forecasted Revenue for 2021 and Peer companies Revenue’s Multiples. As of September 30, 2021, there is $14 of unrecognized stock-based compensation related to the XpresTest Plan. During May 2021, XpresTest repurchased seven common shares, exercised pursuant to the XpresTest Plan, for the grantees to defray their tax liabilities related to the XpresTest Plan RSAs award.

The fair value of stock options is estimated as of the date of grant using the Black-Scholes-Merton (“Black-Scholes”) option-pricing model. The Company uses the simplified method to estimate the expected term of options due to insufficient history and high turnover in the past.

The following variables were used as inputs in the model:


Share price of the Company’s Common Stock on the grant date:		$	1.26 - 5.01
Exercise price:		$	1.26 - 5.01
Expected volatility:			123	%
Expected dividend yield:			0	%
Annual average risk-free rate:			0.37	%
Expected term:			5.38	years

Total stock-based compensation for the three months ended September 30, 2021 and 2020 is $819 and $470, respectively, and for the nine months ended September 30, 2021 and 2020 is $2,152 and $496, respectively.

Total following table sets forth the Company’s Equity Incentive activities for the nine months ended September 30, 2021:


		RSUs					XpresTest RSAs					Stock options
				Weighted					Weighted					Weighted
				average					average					average			Exercise
		No. of		grant date			No. of		grant date			No. of		exercise			price
		RSUs		fair value			RSAs		fair value			options		price			range
Outstanding as of December 31, 2020		—		$	—		28.75		$	11,390.35		1,353,888		$	3.82		$	1.53 - 2,460.00
Granted		1,370,167			1.58		120.00			5,227.20		1,668,297			1.56			1.19 - 1.61
Exercised/Vested		(427,625)			1.50		(141.25)			6,229.35		(8,334)			1.53
Forfeited		—			—		—			—		(183,230)			1.61
Outstanding as of September 30, 2021		942,542		$	1.61		7.50		$	9,978.78		2,830,621		$	2.63		$	1.19 - 2,460.00
Exercisable as of September 30, 2021												858,905		$	2.63		$	1.19 - 2,460.00