Annual report pursuant to Section 13 and 15(d)

Share-based compensation

v3.23.1
Share-based compensation
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Share-based compensation Share-based compensation
On November 11, 2019, the Company received shareholder approval for the Amended and Restated 2019 Incentive Award Plan (the “Amended 2019 Plan”). The Amended 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, other stock or cash-based awards or a dividend equivalent award. The Amended 2019 Plan authorized the issuance of 1,083,334 shares of common stock which was increased to 1,500,000 after the Halo acquisition; the Amended 2019 Plan also provides for an annual increase on the first day of each calendar year beginning on January 1, 2020 and ending on and including January 1, 2029, equal to the lesser of (A) 10% of the shares of common stock outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of common stock as determined by the Board; provided, however, not more than 9,000,000 shares of common stock shall be authorized for issuance. The authorized shares for issuance was increased to 2,700,000 on January 1, 2021, increased to 5,614,637 on January 1, 2022 and again increased to 8,557,663 on January 1, 2023.
Stock options
The following table provides detail of the options granted and outstanding (dollars in thousands):
  Options Weighted Average
Exercise Price		 Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value
Options outstanding as of December 31, 2021 2,684,041  $ 6.10  8.5 $ — 
Granted 618,500  $ 2.24 
Forfeited/Expired (231,354) $ 5.26 
Options outstanding as of December 31, 2022 3,071,187  $ 5.39  7.2 $ — 
Options exercisable as of December 31, 2022 2,141,961  $ 5.84  6.5 $ — 
Options granted under the Amended 2019 Plan vest over a period of two to three years. All vested options are exercisable and may be exercised through the ten-year anniversary of the grant date (or such earlier date described in the applicable award agreement).
During the years ended December 31, 2022 and 2021, $2.4 million and $4.0 million, respectively, of share-based compensation expense was recognized related to options issued. As of December 31, 2022, unrecognized share-based compensation related to options was $2.0 million, which is expected to be recognized over a weighted average period of 0.8 years.
The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model, using the following assumptions primarily based on historical data:
Years Ended December 31,
2022 2021
Risk-free interest rate
1.70 - 4.02%
0.36 - 1.39%
Expected volatility (1)
65.0% - 72.5%
60.0% - 67.5%
Expected dividend yield —% —%
Expected life (years) (2)
6.0 - 6.5
6.0 - 6.5
(1)Expected volatility was determined using a combination of historical volatility and implied volatility.
(2)For certain options, the simplified method is utilized to determine the expected life due to the lack of historical data.
Restricted Stock Awards
In February 2022, the Company granted 218,345 shares of restricted common stock to members of its board of directors under the Amended 2019 Plan as compensation for annual board service. These restricted stock awards were immediately vested and, as such, the Company recorded share-based compensation expense of $0.5 million upon issuance.
During the fourth quarter of 2022, the Company granted 65,555 shares of restricted common stock to a member of its board of directors for service as interim CEO. These restricted stock awards were immediately vested and, as such, the Company recorded share-based compensation expense of less than $0.1 million upon issuance.
In January 2023, the Company granted 892,860 shares of restricted common stock to members of its board of directors under the Amended 2019 Plan as compensation for annual board service. These restricted stock awards were immediately vested and, as such, the Company recorded share-based compensation expense of $0.5 million upon issuance.
In January 2023, the Company granted 200,000 shares of restricted common stock to certain executives and employees under the Amended 2019 Plan as performance bonus compensation totaling $0.1 million. These restricted stock awards were issued on the grant date with a one year cliff vesting condition and the Company will recognize the expense over the vesting period.
During the first quarter of 2023, the Company granted 18,021 shares of restricted common stock to a member of its board of directors for service as interim CEO. These restricted stock awards were immediately vested and, as such, the Company recorded share-based compensation expense of less than $0.1 million upon issuance.