Stock-Based Compensation and Stock Repurchases | Note 17 – Stock-Based Compensation and Stock Repurchases Employee and Director Stock Incentive Plan 2020 Stock Incentive Plan On November 4, 2020, the Company enacted the 2020 Stock Incentive Plan, which was also approved by the Company’s stockholders on December 8, 2020 (the “2020 Plan”). Under the 2020 Plan, the number of permitted authorized shares for issuance was 1,250,000 (the “2020 Authorized Amount”). Added to the 2020 Authorized Amount would be any awards outstanding under the 2010 Plan and 2020 Plan that were subsequently forfeited (for instance, through a then outstanding out of the money option) or if the related shares are repurchased, a corresponding number of shares would automatically become available for issuance under the 2020 Plan, thus resulting in a potential increase from the 2020 Authorized Amount available for issuance under the 2020 Plan. Under the 2020 Plan, the Company may grant stock options and other share-based payment awards of our Class A Common Stock to eligible employees, directors and consultants. At September 30, 2023, there were 278,193 shares of Class A Common Stock available for issuance under the 2020 Plan, which includes shares from the 2010 Plan that become available for issuance due to the forfeiture of then outstanding out of the money stock options. St ock options are granted at exercise prices equal to the grant-date market prices and typically expire no later than five years from the grant date. In contrast to a stock option where the grantee buys our Company’s share at an exercise price determined on the grant date, a restricted stock unit (“RSU”) entitles the grantee to receive one share for every RSU based on a vesting plan, typically between one year and four years from grant. As discussed further below, a performance component has been added to certain of the RSUs granted to management. At the time the options are exercised or RSUs vest and are settled, at the discretion of management, we will issue treasury shares or make a new issuance of shares to the option or RSU holder. Stock Options We have estimated the grant-date fair value of our stock options using the Black-Scholes option-valuation model, which takes into account assumptions such as the dividend yield, the risk-free interest rate, the expected stock price volatility, and the expected life of the options. We expensed the estimated grant-date fair values of options over the vesting period on a straight-line basis. Based on our historical experience, the “deemed exercise” of expiring in-the-money options and the relative market price to strike price of the options, we have not estimated any forfeitures of vested or unvested options. No stock options were issued in the nine months ended September 30, 2023. For the quarters ended September 30, 2023, and 2022, we recorded a compensation expense of $ 9,000 and $ 53,000 , respectively. For the nine months ended September 30, 2023, and 2022, we recorded a compensation expense of $ 27,000 and $ 159,000 , respectively, with respect to our prior stock option grants. At September 30, 2023, the total unrecognized estimated compensation expense related to non-vested stock options was $ 9,000 , which we expect to recognize over a weighted average vesting period of 0.25 years. The intrinsic, unrealized value of all options outstanding vested and expected to vest, at September 30, 2023, was nil , as the closing price of our Class A Common Stock on that date was $ 2.12 . The following table summarizes the number of options outstanding and exercisable as of September 30, 2023, and December 31, 2022: Outstanding Stock Options - Class A Shares Number of Options Weighted Average Exercise Price Weighted Average Remaining Years of Contractual Life Aggregate Intrinsic Value Class A Class A Class A Class A Balance - December 31, 2021 517,344 $ 15.42 1.66 $ — Granted — — — — Exercised — — — — Forfeited ( 189,846 ) 14.63 — — Balance - December 31, 2022 327,498 $ 15.87 1.24 $ — Granted — — — — Exercised — — — — Forfeited ( 122,376 ) — — — Balance - September 30, 2023 205,122 $ 15.92 0.45 $ — Restricted Stock Units The following table summarizes the status of RSUs granted to date as of September 30, 2023: Restricted Stock Units RSU Grants (in units) Vested, Unvested, Forfeited, Grant Date Directors Management Total Grants September 30, 2023 September 30, 2023 September 30, 2023 Opening balance 189,880 507,635 697,515 642,908 18,758 35,849 April 5, 2021 — 262,830 262,830 90,804 149,008 23,018 April 19, 2021 — 22,888 22,888 10,831 10,560 1,497 August 11, 2021 26,924 — 26,924 26,924 — — December 8, 2021 48,951 — 48,951 48,951 — — April 18, 2022 — 428,899 428,899 75,721 316,601 36,577 December 15, 2022 73,683 — 73,683 — 73,683 — April 11, 2023 — 413,536 413,536 — 413,536 — April 21, 2023 — 237,719 237,719 — 237,719 — April 28, 2023 — 20,427 20,427 — 20,427 — Total 339,438 1,893,934 2,233,372 896,139 1,240,292 96,941 Time vested RSU awards to management vest 25 % on the anniversary of the grant date and the remainder over a period of four years . Beginning in 2020, a performance component has been added to certain of the RSUs granted to management, which vest on the third anniversary of their grant date based on the achievement of certain performance metrics . From 2021 onwards, RSUs have two structures, which include time vesting and performance vesting. The majority of RSUs vest 75 % evenly over a period of four years , with the remaining 25 % contingent upon the achievement of certain performance metrics, vesting in full on the third anniversary of the date of the grant. In the case of our Chief Executive Officer, RSUs vest 50 % evenly over a period of four years with the remaining 50 %, contingent upon the achievement of certain performance metrics, vesting in full on the third anniversary of the grant date. On April 11 and April 21, 2023, the Board of Directors determined that our Company was not in a position to pay cash bonuses that would otherwise have been earned by certain members of management under our Company’s Incentive Compensation Plan for 2022, and authorized the issuance in lieu of such cash bonuses 85,139 RSUs, vesting on April 11, 2024 and 52,350 RSUs, vesting on April 21, 2024. RSUs issued to non-employee directors vest on the first to occur of (i) 5:00 pm, Los Angeles, CA time on the last business day prior to the one-year anniversary of the Grant Date or (ii) the date on which the Recipient has served such Recipient’s full term as a Director. For the quarters ended September 30, 2023, and 2022, we recorded compensation expense of $ 604,000 and $ 444,000 , respectively. For the nine months ended September 30, 2023, and 2022, we recorded compensation expense of $ 1.3 million and $ 1.2 million, respectively. The total unrecognized compensation expense related to the non-vested RSUs was $ 4.1 million as of September 30, 2023, which we expect to recognize over a weighted average vesting period of 1.48 years. Stock Repurchase Program On March 10, 2020, our Board of Directors authorized a $ 25.0 million increase to our 2017 stock repurchase program, bringing our total authorized repurchase amount remaining to $ 26.0 million, and extended the program to March 2, 2024. Through September 30, 2023, we have repurchased 1,792,819 shares of Class A Common Stock at an average price of $ 13.39 per share (excluding transaction costs). The last share repurchase made by our Company was made on March 5, 2020, at which time 25,000 shares were purchased at an average cost per share of $ 7.30 . |