As of March 31, 2022, there was approximately $3.9 million of total unrecognized compensation cost related to unvested options and restricted stock. That cost is expected to be recognized over a weighted average period of 1.82 years.
The Company granted 0 and 22,488 shares of restricted stock during the three-month periods ended March 31, 2022 and 2021, respectively.
The Company’s restricted stock awards typically vest in either one year or three equal annual installments with the first installment vesting one year from the grant date. All of the Company’s restricted stock grants in 2021 had time-based vesting requirements The grant date fair value for restricted stock awards is based on the quoted market value of Company stock on the grant date.
The Company’s aggregate intrinsic value for stock options and restricted stock outstanding is as follows (in thousands):
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Aggregate intrinsic value |
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Stock options |
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$ |
1,311 |
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$ |
29,305 |
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Restricted stock |
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— |
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672 |
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The Company issued 22,833 shares of common stock upon the exercise of outstanding stock options in the three-month period ended March 31, 2022. The Company received cash proceeds of approximately $66,000 in the three -month period ended March 31, 2022. The intrinsic value of 20,000 restricted shares that vested in the three months ended March 31, 2021 was $0.3 million.
Employee Stock Purchase Plan
In December 2019, the 2019 Employee Stock Purchase Plan (“ESPP”) was adopted by the Company’s Board of Directors (the “Board”) and approved by stockholders, effective January 1, 2020. The ESPP provides for the issuance of up to 950,000 shares of common stock, subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. The ESPP may be terminated or amended by the Board at any time. Certain amendments to the ESPP require stockholder approval.
Substantially all of the Company’s employees whose customary employment is for more than 20 hours a week are eligible to participate in the ESPP. Any employee who owns 5% or more of the voting power or value of the Company’s shares of common stock is not eligible to participate in the ESPP.
Any eligible employee can enroll in the ESPP as of the beginning of a respective quarterly accumulation period. Employees who participate in the ESPP may purchase shares by authorizing payroll deductions of up to 15% of their base compensation during an accumulation period. Unless the participating employee withdraws from participation, accumulated payroll deductions are used to purchase shares of common stock on the last business day of the accumulation period (the “Purchase Date”) at a price equal to 85% of the lower of the fair market value on (i) the Purchase Date or (ii) the first day of such accumulation period. Under applicable tax rules, no employee may purchase more than $25,000 worth of common stock, valued at the start of the purchase period, under the ESPP in any calendar year.
The Company issued 9,381 shares under the ESPP in the three-month period ended March 31, 2022. The Company recorded approximately $10,000 of stock-based compensation expense pursuant to ESPP for the three-month period ended March 31, 2022. The next accumulation period under the ESPP commenced on January 31, 2022 and ended on March 31, 2022, and the related shares purchased by the participants were issued in April 2022. As of March 31, 2022, the Company recorded a liability of approximately $33,000 related to employee withholdings in connection with the ESPP accumulation period ended March 31, 2022, which was included as a component of accrued expenses and other current liabilities.
The Company had no material unrecognized tax benefits and a deferred tax liability of approximately $6,000 related to tax amortizable goodwill at March 31, 2022. No other adjustments were required under ASC 740, “Income Taxes.” The Company does not expect that its unrecognized tax benefits will materially increase within the next 12 months. The Company did not recognize any interest or penalties related to uncertain tax positions at March 31, 2022.
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