Annual report pursuant to Section 13 and 15(d)

Share-based Compensation

v3.22.0.1
Share-based Compensation
12 Months Ended
Dec. 31, 2021
Share-based Compensation  
Share-based Compensation

Note 12. Share-based Compensation

The Company’s 2017 Stock Plan (the “2017 Plan”) provides for granting stock options and restricted stock awards to employees, directors, contractors and consultants of the Company. A total of 3,182,335 shares of common stock are authorized to be issued pursuant to the 2017 Plan. As of December 31, 2021, there were 2,739,261 shares available for future grants under the 2017 Plan.

The Company’s 2019 Omnibus Stock Incentive Plan (the “2019 Plan”) provides for granting stock options and restricted stock awards to employees, directors, contractors and consultants of the Company. During 2021, the Company amended the 2019 Plan by adding an additional one million shares authorized to be issued. A total of 2,060,778 shares of common stock are authorized to be issued pursuant to the 2019 Plan. As of December 31, 2021, there were 1,138,123 shares available for future grants under the 2019 Plan.

Restricted Stock Awards

    

    

Weighted Average

 Grant Date

Shares

 Fair Value

Nonvested at December 31, 2019

 

227,981

$

5.28

Granted

 

193,828

 

23.42

Vested

 

(15,844)

 

(21.82)

Forfeited

 

(15,178)

 

(6.39)

Nonvested at December 31, 2020

 

390,787

$

13.56

Granted

 

448,481

 

30.01

Vested

 

(86,205)

 

(29.12)

Forfeited

 

(35,966)

 

(12.90)

Nonvested at December 31, 2021

 

717,097

$

11.02

In January 2019, pursuant to the 2017 Plan, the Company granted 193,081 fully vested restricted stock awards to certain employees and agents. During June 2019, pursuant to the 2017 Plan, the Company granted 134,341 fully vested restricted stock awards to certain employees and agents. The fair value of the Company’s restricted stock awards granted in January 2019 and during June 2019 was determined to be $4.71 based on the Company’s sales of common stock to agents and third parties in March 2019.

In September 2019, pursuant to the 2019 Plan, the Company granted 23,793 restricted stock awards to certain employees and agents, which will vest two years from the grant date subject to continuous service with the Company. The fair value of the Company’s restricted stock awards granted in September 2019 was estimated to be $5.28. In order to determine the fair value of the Company’s common stock, the Company considered, among other things contemporaneous valuations of the Company’s common stock, the Company’s business, financial condition and results of operations, including related industry trends affecting its operations; the likelihood of achieving a liquidity event, such as an initial public offering, or IPO, or sale, given prevailing market conditions; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions. In November and December 2019, pursuant to the 2019 Plan, the Company granted 204,188 restricted stock awards for common stock to certain employees and agents, which will vest three years from the grant date subject to continuous service with the Company. The fair value of the Company’s restricted stock awards was determined to be $5.28 based on the Company’s sales of common stock to agents and third parties in December 2019.

In October 2020, pursuant to the 2019 Plan, the Company granted 124,418 restricted stock awards to certain employees and agents, of which 3,182 awards vested immediately and the remaining 121,236 awards will vest three years from the grant date subject to continuous service with the Company. The fair value of the Company’s restricted stock awards granted in October 2020 was $21.51, based on the Company’s closing stock price on the grant date.

In November 2020, in connection with the acquisition of Verus (see Note 3), the Company granted 33,915 restricted stock awards to the founder of Verus, who is now an employee of the Company, that will vest 18 months from the grant date. The fair value of the Company’s restricted stock awards granted in November 2020 was $21.90, based on the Company’s closing stock price on the grant date.

In December 2020, pursuant to the 2019 Plan, the Company granted 22,833 restricted stock awards to certain employees and agents, which will vest three years from the grant date subject to continuous service with the Company. The fair value of the Company’s restricted stock awards granted in December 2020 was $36.92, based on the Company’s closing stock prices on the grant date.

In March 2021, pursuant to the 2019 Plan, the Company granted 82,003 restricted stock awards to certain employees and agents, of which 4,564 awards vested immediately and the remaining 77,439 awards will vest three years from the grant date subject to continuous service with the Company. The fair value of these restricted stock awards was $32.87 per share based on the Company’s closing stock price on the grant date.

In March 2021, pursuant to the 2019 Plan, in connection with the Company’s acquisitions of Naberly and Red Barn (see Note 3), the Company granted 44,568 restricted stock awards to former founders who are now employees of the Company, of which 10,478 will vest one year from the grant date, and the remaining 34,090 will vest 18 months from the grant date. The fair value of the Company’s restricted stock awards granted in March 2021 was $44.00 per share based on the Company’s closing stock price on the grant date.

Stock Option Awards

A summary of stock option activity under the 2017 and 2019 Plans are as follows:

    

    

    

Weighted 

    

Average

Remaining

Weighted

 Contractual

Aggregate

Options

Average

Term in 

intrinsic value

Outstanding

Exercise Price

Years

(in thousands)

Balance at December 31, 2019

 

37,130

$

4.71

 

9.4

$

21,164

Granted

 

10,202

 

20.10

 

10.0

 

Forfeited

 

 

 

 

Balance at December 31, 2020

 

47,332

$

8.03

 

8.8

$

1,326

Granted

 

13,638

 

44.00

 

 

Exercised

 

(16,974)

 

4.71

 

 

Balance at December 31, 2021

 

43,996

$

20.46

 

8.5

$

510

Options exercisable at December 31, 2021

 

20,156

$

4.71

 

7.5

$

443

In April 2019, pursuant to the 2017 Plan, the Board granted stock option awards to the independent directors to acquire an aggregate of 32,884 shares of common stock with an exercise price of $4.71 per share. In May 2019, the Board granted stock option awards to the independent directors to acquire an aggregate of 8,486 shares of common stock with an exercise price of $4.71 per share. Additionally, in May 2019, 4,240 stock option awards were forfeited, and 4,246 stock option awards vested immediately, for a total of 37,130 stock option awards outstanding at December 31, 2019. The exercise price of these stock option awards was established at the fair value of the Company’s common stock which was determined based on sales of common stock to agents and third parties that occurred during the quarter ended June 30, 2019. The stock options will vest on the earlier of (a) one year from the date of grant and (b) the next annual stockholder meeting, subject to the director’s continued service on the Board.

In November 2020, pursuant to the 2019 Plan, the Board granted stock option awards to the independent directors to acquire an aggregate of 10,202 shares of common stock with an exercise price of $20.10 per share. The exercise price of these stock option awards was established at the fair value of the Company’s common stock based on the Company’s closing stock price on the date of grant. The stock options will vest on the earlier of (a) one year from the date of grant and (b) the next annual stockholder meeting, subject to the director’s continued service on the Board.

In March 2021, pursuant to the 2019 Plan, the Board granted stock option awards to the independent directors to acquire shares of common stock with an exercise price of $44.00 per share. The stock options will vest on the earlier of (a) one year from the date of grant and (b) the next annual stockholder meeting, subject to the director’s continued service on the Board.

The weighted-average grant-date fair value of options granted during the years ended December 31, 2021 and 2020, was $18.64 and $7.84, respectively.

Stock based compensation related to the Company’s 2017 and 2019 Plans are as follows (amount in thousands):

    

For the Year Ended December 31, 

2021

    

2020

Commission and other agent-related cost

 

$

1,501

 

$

97

Technology and development

417

General and administrative

2,093

Total stock-based compensation

$

4,011

$

97

The Company capitalized $0.8 million of stock-based compensation expense associated with the cost of developing software for internal use during the year ended December 31, 2021.

At December 31, 2021, the total unrecognized compensation related to unvested stock option awards granted was $11.7 million, which the Company expects to recognize over a period of approximately 2.0 years.