STOCK OPTIONS AND WARRANTS |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||
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| STOCK OPTIONS AND WARRANTS |
NOTE 10 - STOCK OPTIONS AND WARRANTS
Amended and Restated 2020 Equity Incentive Plan
Pursuant to the 2020 Equity Incentive Plan, as amended, the Company granted stock-based options to certain employees.
The Company recognized stock compensation expenses related to stock option awards $0.5 million and $0.6 million for the three months ended March 31, 2024 and 2023, respectively. The Company recognizes all stock-based compensation in general and administrative expenses in the accompanying condensed consolidated statements of operations. As of March 31, 2024, there was approximately $1.9 million of unrecognized compensation cost related to service-based option awards that will be recognized over the remaining service period of approximately 1.2 years, and there was approximately $1.0 million of unrecognized compensation cost related to market-based stock option awards that will be recognized over the remaining derived service period of 2.0 years.
On October 12, 2023, the compensation committee (“Compensation Committee”) of the Board of Directors of the Company approved amendments to certain legacy performance-based stock options that had been granted to Richard Palmer, the Company’s former Chief Executive Officer, and Noah Verleun, the Company’s President and interim Chief Executive Officer, pursuant to their respective employment agreements. Pursuant to the amendments, options previously granted to Mr. Palmer to purchase up to 11 million shares of the Company’s common stock were amended to increase the exercise price from $0.154 per share to $0.97 per share (being the closing price of the Company’s stock on October 13, 2023), following which the exercise date for these options were extended for a period of five years until October 14, 2028. In addition, options previously granted to Mr. Verleun to purchase an aggregate of up to 6 million shares of the Company’s common stock were each amended to increase the exercise price to $0.97 per share (from exercise prices of $0.20 per share and $0.165 per share), and then to extend the exercise date for a period of five years, until January 14, 2029, and June 20, 2029, respectively. All other terms of Mr. Palmer’s and Mr. Verleun’s options remain unchanged. The effectiveness of each of these amendments to Mr. Palmer’s and Mr. Verleun’s options are subject to certain conditions precedent, including receipt of stockholder approval at the Company’s 2024 annual meeting of stockholders.
Stock Purchase Warrants and Call Option
Total warrants issued as of March 31, 2024 related to Amendments No. 10 through 13 of the Senior Credit Agreement were 40,720,588. Each new warrant is issued commensurate with each cash draw from the Senior Credit Agreement. Therefore, the fair value of these warrants are determined on the date of the draw. If these warrants are exercised for cash,
the Company will receive $3.1 million. The following table is a summary of the ranges used in the inputs of the Black-Scholes option pricing model assumptions related to the warrants issued during the three months ended March 31, 2024:
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