Quarterly report pursuant to Section 13 or 15(d)

Note 15 - Stock-based Compensation

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Note 15 - Stock-based Compensation
6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

NOTE 15  STOCK-BASED COMPENSATION

 

Equity Incentive Plans

 

As a result of the Reorganization on January 12, 2024, Unrivaled Brands, Inc. assigned to Blüm, and Blüm assumed and agreed to perform all obligations pursuant to (a) the Terra Tech Corp. 2016 Equity Incentive Plan (the “2016 Equity Incentive Plan”), the Terra Tech Corp. Amended and Restated 2018 Equity Incentive Plan (the “2018 Equity Incentive Plan”), and the UMBRLA, Inc. 2019 Equity Incentive Plan (the “2019 Equity Incentive Plan" or the "UMBRLA Plan”), and (b) each award agreement entered into pursuant to the equity incentive plans.

 

The following table contains information about the Company's equity incentive plans as of June 30, 2024:

 

   

Awards Reserved for Issuance

   

Awards Exercised

   

Awards Outstanding

   

Awards Available for Grant

 

2016 Equity Incentive Plan

    2,000,000             2,489       1,997,511  

2018 Equity Incentive Plan

    43,976,425       40,221       199,961       43,736,243  

2019 Equity Incentive Plan

    55,000,000       349       116,752       54,882,899  

 

Stock-Based Compensation Expense

 

The following table sets forth the total stock-based compensation expense resulting from stock options and restricted grants of common stock to employees, directors and non-employee consultants in the consolidated statement of operations which are included in selling, general and administrative expenses:

 

   

(in thousands, except for shares / options)

 
   

For the Three Months Ended

 
   

June 30, 2024

   

June 30, 2023

 
   

Number of

           

Number of

         
   

Shares or

   

Stock-Based

   

Shares or

   

Stock-Based

 
   

Options

   

Compensation

   

Options

   

Compensation

 

Type of Award

 

Granted

   

Expense

   

Granted

   

Expense

 

Stock Options

        $ 206           $ 89  
                                 

Stock Grants:

                               

Non–Employee Consultants (Common Stock)

                799,971       1,553  

Total Stock–Based Compensation Expense

          $ 206             $ 1,642  

 

   

(in thousands, except for shares / options)

 
   

For the Six Months Ended

 
   

June 30, 2024

   

June 30, 2023

 
   

Number of

           

Number of

         
   

Shares or

   

Stock-Based

   

Shares or

   

Stock-Based

 
   

Options

   

Compensation

   

Options

   

Compensation

 

Type of Award

 

Granted

   

Expense

   

Granted

   

Expense

 

Stock Options

        $ 316           $ 187  
                                 

Stock Grants:

                               

Non–Employee Consultants (Common Stock)

                961,783       1,910  

Total Stock–Based Compensation Expense

          $ 316             $ 2,097  

 

Stock Options

 

The following table summarizes the Company’s stock option activity and related information for the six months ended June 30, 2024:

 

                   

Weighted-

   

Aggregate

 
                   

Average

   

Intrinsic

 
           

Weighted-

   

Remaining

   

Value of

 
   

Number of

   

Average Exercise

   

Contractual

   

In-the-Money

 
   

Shares

   

Price Per Share

   

Life (in years)

   

Options

 

Options Outstanding as of January 1, 2024

    369,301     $ 13.00                  

Forfeited

    (49,150 )   $ (1.88 )                

Options Outstanding as of June 30, 2024

    320,151     $ 12.33       7.6 years     $  

Options Exercisable as of June 30, 2024

    367,643     $ 12.58       7.8 years     $  

 

As of June 30, 2024, total unrecognized stock-based compensation was $0.10 million. Such costs are expected to be recognized over a weighted-average period of approximately 1.00 years. The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period.

 

The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Hence, the Company uses the “simplified method” described in Staff Accounting Bulletin 107 to estimate the expected term of share option grants. The expected stock price volatility assumption was determined by examining the historical volatilities for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumptions as more historical data for the Company’s common stock becomes available. The risk-free interest rate assumption is based on the U.S. treasury instruments whose term was consistent with the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has never paid dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. Accordingly, the Company has assumed no dividend yield for purposes of estimating the fair value of the Company stock-based compensation.