Stock Based Compensation

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

2019 Equity Incentive Plan

On December 19, 2019, the Oblong, Inc. 2019 Equity Incentive Plan (the “2019 Plan”) was approved by the Company’s stockholders at the Company’s 2019 Annual Meeting of Stockholders. The 2019 Plan is an omnibus equity incentive plan pursuant to which the Company may grant equity and cash incentive awards to certain key service providers of the Company and its subsidiaries. As of June 30, 2021, the share pool available for new grants under the 2019 Plan is 2,713,500.

Stock Options

On June 28, 2021, the Company granted 300,000 stock options to certain employees. These options have a term of 10 years, vest equally over 3 years, upon the anniversary of the grant date, and have an exercise price of $3.25 per share. Using the Black-Scholes option pricing model, the options were determined to have a fair value of $745,000 which will be expensed ratably over the vesting term. No stock options were granted during the year ended December 31, 2020. The fair value of each stock option granted was estimated using the following weighted average assumptions:


			Six Months Ended June 30, 2021
Risk free interest rate			0.47%
Expected maturity			3 years
Expected volatility			1.36

Expected dividend yields			—
Weighted average grant date market value per share			$3.25

A summary of stock options activity during the six months ended June 30, 2021 and the year ended December 31, 2020 is presented below:


	Outstanding			Exercisable
	Number of Options	Weighted Average Exercise Price		Number of Options	Weighted Average Exercise Price
Options outstanding, December 31, 2019	215,345	$	12.27	215,345	$	12.27


Expired	(107,845)	4.92		—	—

Options outstanding, December 31, 2020	107,500	$	19.64	107,500	$	19.64
Granted	300,000	3.25		—	—



Options outstanding, June 30, 2021	407,500	$	7.57	107,500	$	19.64

Additional information as of June 30, 2021 is as follows:


	Outstanding				Exercisable
Range of price	Number of Options	Weighted Average Remaining Contractual Life (In Years)	Weighted Average Exercise Price		Number of Options	Weighted Average Exercise Price
$0.00 – $10.00	302,500	9.93	$	3.30	2,500	$	9.00
$10.01 – $20.00	97,500	1.56	19.32		97,500	19.32
$20.01 – $30.00	2,500	0.94	21.80		2,500	21.80
$30.01 – $40.00	5,000	0.70	30.20		5,000	30.20

	407,500	7.76	$	7.57	107,500	$	19.64

The intrinsic value of vested options, unvested options and exercised options were not significant for all periods presented. There was no stock compensation expense related to stock options for the three and six months ended June 30, 2021 and 2020, and $745,000 remaining as unrecognized stock-based compensation expense for options as of June 30, 2021.

Restricted Stock Awards

As of June 30, 2021 and 2020, there were 627 unvested restricted stock awards outstanding, with a weighted average grant date price of $15.80. The awards were issued in 2014 and vest over the lesser of ten years, a change in control, or separation from the company. Due to the variability of the vesting, the expense was amortized over an average service period of five years; therefore, there is no stock-based compensation expense for restricted stock awards for the three and six months ended June 30, 2021 or 2020.

Restricted Stock Units

As of June 30, 2021 and 2020, there were no unvested restricted stock units (“RSUs”) outstanding and 28,904 vested RSUs remain outstanding as shares of common stock have not yet been delivered for these units in accordance with the terms of the RSUs.

There was no stock compensation expense for RSUs for the three and six months ended June 30, 2021, and there was zero and $6,000 stock compensation expense for RSUs for the three and six months ended June 30, 2020, respectively, which was included in general and administrative expense. There was no remaining unrecognized stock-based compensation expense for RSUs at June 30, 2021.

Restricted Series D Preferred Stock

In connection with the acquisition of Oblong Industries in 2019, all options to purchase shares of Oblong Industries’ common stock held by existing employees of Oblong Industries were canceled and exchanged for an aggregate of 49,967 shares of Restricted Series D Preferred Stock, which were subject to vesting over a two-year period following the closing date. This vesting period and compensation expense were accelerated, in February 2021, when the Restricted Series D shares were converted to shares of Common Stock. Refer to Note 8 - Preferred Stock for discussion on the conversion of the Series D Restricted Preferred Stock.

Stock-based compensation expense relating to Restricted Series D Preferred Stock is allocated as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Research and development	$	—	$	14	$	17	$	28
Sales, general and administrative	$	—	$	15	$	16	$	27
	$	—	$	29	$	33	$	55

During the six months ended June 30, 2021 81 shares of Restricted Series D Preferred Stock were forfeited. During the three and six months ended June 30, 2020, 17,364 and 31,805 shares of Restricted Series D Preferred Stock were forfeited, respectively. As of June 30, 2021, zero shares of Restricted Series D Preferred Stock remain outstanding and there was no remaining unrecognized stock compensation expense.