Annual report [Section 13 and 15(d), not S-K Item 405]

Note 17 - Stock-based Compensation

v3.25.0.1
Note 17 - Stock-based Compensation
12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

NOTE 17  STOCK-BASED COMPENSATION

 

Equity Incentive Plans

 

As a result of the Reorganization on January 12, 2024, Unrivaled 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 Plan”), the Terra Tech Corp. Amended and Restated 2018 Equity Incentive Plan (as amended, the “2018 Plan”), and the UMBRLA, Inc. 2019 Equity Incentive Plan (the “2019 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 December 31, 2024:

 

   

Awards Reserved for Issuance

   

Awards Exercised

   

Awards Outstanding

   

Awards Available for Grant

 
                                 

2016 Plan

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

2018 Plan

    43,976,425       40,221       176,860       43,759,344  

2019 Plan

    55,000,000       349       117,715       54,881,936  

 

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 Year Ended  
   

December 31, 2024

   

December 31, 2023

 

Type of Award

 

Number of Shares or Options Granted

   

Stock-Based Compensation Expense

   

Number of Shares or Options Granted

   

Stock- Based Compensation Expense

 
                                 

Stock Options

    45,534     $ 371       192,442     $ 525  
                                 

Stock Grants:

                               

Non–Employee Consultants (Common Stock)

                1,721,186       1,910  

Total Stock–Based Compensation Expense

          $ 371             $ 2,435  

 

During the year ended  December 31, 2023, the Company issued 961,783 shares of Common Stock to Adnant, LLC as compensation for its services and recorded stock-based compensation expense of $1.91 million for such shares. See "Note 25 - Related Party Transactions" for further information.

 

Stock Options

 

The following table summarizes the Company’s stock option activity and related information for the years ended December 31, 2024 and 2023:

 

   

Number of Shares

   

Weighted-Average Exercise Price Per Share

   

Weighted-Average Remaining Contractual Life (in Years)

   

Aggregate Intrinsic Value of In-the-Money Options

 

Options Outstanding as of December 31, 2022

    528,211     $ 20.00                  

Granted

    192,442     $ 1.00                  

Forfeited

    (351,352 )   $ 22.00                  

Options Outstanding as of December 31, 2023

    369,301     $ 13.00                  

Granted

    45,534     $ 0.69                  

Forfeited

    (117,771 )   $ 1.43                  

Options Outstanding as of December 31, 2024

    297,064     $ 15.20       6.3 years     $  

Options Exercisable as of December 31, 2024

    296,952     $ 15.21       6.3 years     $  

 

The aggregate intrinsic value is calculated as the difference between the Company’s closing stock price of $0.45 on December 31, 2024 and the exercise price of options, multiplied by the number of options. As of December 31, 2024 and 2023, total unrecognized stock-based compensation was $0.0 million and $0.06 million, respectively, which are expected to be recognized over a weighted-average period of approximately 0.03 years and 1.25 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 following weighted-average assumptions were used to calculate stock-based compensation:

 

   

Year Ended December 31,

 
   

2024

   

2023

 

Expected Term (in Years)

    5.0       5.0  

Volatility

    90.4 %     121.2 %

Risk-Free Interest Rate

    4.4 %     4.8 %

Dividend Yield

    0 %     0 %

 

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.