Annual report pursuant to Section 13 and 15(d)

STOCK-BASED COMPENSATION

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STOCK-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION

NOTE 14 – STOCK-BASED COMPENSATION

 

For the years ended December 31, 2022 and 2021, stock-based compensation expense recognized in SG&A expenses was $2,973,234 and $3,758,424, respectively.

 

Stock Award Plans

 

The Company maintains stock incentive plans to attract, motivate and retain management, key employees, directors, and consultants. These plans provide for discretionary awards of, among others, stock options, stock awards, stock unit awards, and stock appreciation rights to participants (collectively, share-based awards).

 

Restricted Stock Awards

 

The following table summarizes our restricted stock awards activity:

 

    Number of Units     Weighted Average Grant-Date Fair Value  
Outstanding as of December 31, 2020     -       -  
Granted     1,506,000       4.13  
Vested     (633,889 )     3.94  
Forfeited     (4,611 )     3.81  
Outstanding as of December 31, 2021     867,500       4.20  
Granted     136,000       2.72  
Vested     (543,500 )     3.78  
Forfeited     -       -  
Outstanding as of December 31, 2022     460,000       4.32  

 

As of December 31, 2022, there was approximately $2.3 million of net unrecognized compensation cost related to unvested stock-based compensation to be recognized over the remaining weighted average period of 1.4 years.

 

Stock Options

 

Stock options outstanding at December 31, 2022 and 2021, as disclosed in the below table, have approximately ($6.1) million and ($2.8) million of intrinsic value, respectively.

 

A summary of the status of the Company’s outstanding stock options and changes during the years ended December 31, 2022 and 2021, is as follows:

  

    Number of Options     Weighted Average Exercise Price     Weighted Average Grant Date Fair Value     Weighted Average Remaining Contractual Life (Years)  
Balance at January 1, 2021     599,092     $ 2.35     $ -       9.91  
Granted     1,650,000     $ 5.24     $ 3.23       5.31  
Exercised     (19,200 )   $ 1.00     $ -       -  
Cancelled     (50,000 )   $ 1.25     $ -       -  
Expired     -     $ -     $ -       -  
Balance outstanding at December 31, 2021     2,179,892     $ 4.54     $ 2.44       5.93  
                                 
Options exercisable at December 31, 2021     929,892     $ 3.53     $ 1.37       7.36  
                                 
Balance at January 1, 2022     2,179,892     $ 4.54     $ 2.44       5.93  
Granted     190,000     $ 1.92     $ 1.43       6.85  
Exercised     -     $ -     $ -       -  
Cancelled     (250,000 )   $ 5.35     $ -       -  
Expired     (191 )   $ -     $ -       -  
Balance outstanding at December 31, 2022     2,119,701     $ 4.16     $ 2.25       5.23  
                                 
Options exercisable at December 31, 2022     1,259,701     $ 3.51     $ 1.68       6.25  

 

For the year ended December 31, 2021, the Company granted 1,650,000 stock options valued at approximately $2.89 - $3.24 per option, using a Black-Scholes option pricing model with the following assumptions: stock price of $3.81-$5.37 per share (based on closing price of the Company’s common stock on the date of grant), volatility of 75% - 80%, expected term of 5-10 years, and a risk free interest rate of 0.28%.

 

For the year ended December 31, 2022, the Company granted 190,000 stock options valued at approximately $1.10 - $1.92 per option, using a Black-Scholes option pricing model with the following assumptions: stock price of $1.71 - $2.20 per share (based on closing price of the Company’s common stock on the date of grant), volatility of 75% - 100%, expected term of 5 to 10 years and a risk free interest rate of 2.66% to 4.39%.

 

As of December 31, 2022, there was approximately $2.7 million of net unrecognized compensation cost related to unvested stock options to be recognized over the remaining weighted average period of 3.73 years.

 

 

NEXTPLAT CORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)