Note 11 – Stock-Based Compensation and Warrants

At the 2022 Annual Meeting of Shareholders, the Company’s shareholders approved a 4,500,000 increase in the number of shares available for issuance under the 2019 Equity Plan. As of June 30, 2022, the Company had 4,407,088 shares available for issuance under the 2019 Equity Incentive Plan (“2019 Equity Plan”).

Stock-based compensation cost for the three months ended June 30, 2022 and 2021 was $0.9 million and $1.1 million, respectively, and $1.8 million and $2.2 million for the six months ended June 30, 2022 and 2021, respectively. Stock-based

compensation is included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income. Included in stock-based compensation cost was $0.1 million and $0.2 million of stock granted to directors for both the three and six months ended June 30, 2022 and 2021, respectively. Such grants were awarded consistent with the Board of Director’s compensation practices. Stock-based compensation expense for the six months ended June 30, 2021 included $0.3 million of compensation costs for the vesting of market condition based options and RSUs.

Stock Option Activity

Stock options in the table below include both time based and market condition based awards. Changes in stock options during the six months ended June 30, 2022 were as follows:

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A summary of the status of the Company’s non-vested stock options as of June 30, 2022 and changes during the six months then ended, is presented below:

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The fair value of options that vested in the six months ended June 30, 2022 was $0.1 million. As of June 30, 2022, all outstanding stock options have vested.

Restricted Stock Unit Activity

The Company issues restricted stock units (“RSUs”) under the 2019 Equity Plan. The fair value of these RSUs is determined based upon the closing fair market value of the Company’s common stock on the grant date.

A summary of the status of RSUs and changes during the six months ended June 30, 2022 is presented below:

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As of June 30, 2022, the Company had approximately $8.1 million of total unrecognized compensation costs related to RSUs, which will be recognized over a weighted average period of 2.6 years.

Warrants

As of June 30, 2022 and December 31, 2021, there were outstanding warrants to purchase 125,000 shares of common stock at an exercise price of $1.63.