Stock-based Compensation

12 Months Ended

Dec. 31, 2021

Note 14. Stock-based Compensation

The Company has a stock-based compensation plan available to grant stock options and RSUs to the Company’s directors, employees and consultants. Under the 2012 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2012 Plan”), a maximum of 840,000 shares of Common Stock may be awarded.

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, 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.

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 December 31, 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. During 2021, XpresTest repurchased thirteen common shares, exercised pursuant to the XpresTest Plan, for the grantees to defray their tax liabilities related to the XpresTest Plan RSAs award. As of December 31, 2021 all of the XpresTest RSAs have vested

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:	$	1.19 - 1.61
Exercise price:	$	1.19 - 1.61
Expected volatility:		123	%
Expected dividend yield:		0	%
Annual average risk-free rate:		0.37	%
Expected term:		5.38	years

Total stock-based compensation expense for the years ended December 31, 2021 and 2020 was $2,856 and $1,328, respectively.

The following tables summarize information about stock options and RSU activity during the year ended December 31, 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 - 2,460.0
Granted	1,349,167		1.58	120.00		5,227.20	1,668,297		1.56		1.19 - 1.61
Exercised/Vested	(749,167)		1.54	(148.75)		6,418.40	(8,334)		1.53
Forfeited	—		—	—		—	(183,230)		1.61
Expired	—		—	—		—	(3,750)		50.8		NA
Outstanding as of December 31, 2021	600,000	$	1.63	—	$	—	2,826,871	$	2.57	$	1.19 - 2,460.0
Exercisable as of December 31, 2021							1,024,694	$	3.81	$	1.19 - 2,460.0

The weighted average remaining contractual term for options outstanding as of December 31, 2021 and 2020 was 8.71 years and 9.5 years, respectively.

As of December 31, 2021, Aggregate Intrinsic Value of Options Outstanding and Vested was $545. As of December 31, 2020, there was no aggregate intrinsic value associated with the options outstanding as the exercise price of the options was greater than the Company’s Common Stock price.

Unrecognized stock-based payment cost related to non-vested stock options as of December 31, 2021 and 2020 were $2,088 and $902, respectively.

Unrecognized stock-based payment cost related to non-vested RSUs as of December 31, 2021 and 2020 were $978 and $0 respectively.