Quarterly report pursuant to Section 13 or 15(d)

Share-based Compensation

v3.21.1
Share-based Compensation
3 Months Ended
Mar. 31, 2021
Stock Options and Grants [Abstract]  
Share-based Compensation

15.

Share-based Compensation  


On October 26, 2016, the Company’s Board of Directors approved the issuance of up to 25,000 shares of the Company’s common stock in the form of restricted stock or options (“2016 Stock Plan”). Effective January 20, 2017, the 2016 Stock Plan was amended and restated as the SG Blocks, Inc. Stock Incentive Plan, as further amended effective June 1, 2018 and as further amended on July 30, 2020 (the “Incentive Plan”). The Incentive Plan authorizes the issuance of up to 1,125,000 shares of common stock. It authorizes the issuance of equity-based awards in the form of stock options, stock appreciation rights, restricted shares, restricted share units, other share-based awards and cash-based awards to non-employee directors and to officers, employees and consultants of the Company and its subsidiary, except that incentive stock options may only be granted to the Company’s employees and its subsidiary’s employees. The Incentive Plan expires on October 26, 2026, and is administered by the Company’s Compensation Committee of the Board of Directors. Each of the Company’s employees, directors, and consultants are eligible to participate in the Incentive Plan. As of March 31, 2021, there were 179,547 shares of common stock available for issuance under the Incentive Plan


Stock-Based Compensation Expense   


Stock-based compensation expense is included in the condensed consolidated statements of operations as follows:   






Three Months Ended
March 31,





2021
2020


Payroll and related expenses

   


$

286,186

   

$

38,764

   

 

       Total

   


$

286,186

   

$

38,764

   

 

The following table presents total stock-based compensation expense by security type included in the condensed consolidated statements of operations:  






Three Months Ended
March 31,





 2021

2020

 

Stock options

   


$

2,666

  

  

$

2,667

   

 

Restricted Stock Units 

   


 

283,520

  

  

 

36,097

   


Total

$ 286,186

$ 38,764


Stock-Based Option Awards 


The Company has issued no stock-based options during the three months ended March 31, 2021 and 2020.   

 


Because the Company does not have significant historical data on employee exercise behavior, the Company uses the “Simplified Method” to calculate the expected life of the stock-based option awards granted to employees. The simplified method is calculated by averaging the vesting period and contractual term of the options.  


The following table summarizes stock-based option activities and changes during the three months ended March 31, 2021 as described below:

 


 

 

 Shares

 

 

Weighted Average Fair Value Per Share

 

 

Weighted
Average Exercise Price Per Share

 

 

Weighted Average Remaining Terms (in years)

 

 

Aggregate Intrinsic Value

 


Outstanding – December 31, 2020

 

 

36,437

 

 

$

35.54

 

 

$

78.71

 

 

 

6.34

 

 

$

 


Granted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Exercised 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Cancelled

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Outstanding – March 31, 2021

 

 

36,437

 

 

 

24.80

 

 

 

78.71

 

 

 

6.09

 

 

$

 


Exercisable – December 31, 2020

 

 

36,332

 

 

 

24.80

 

 

 

78.67

 

 

 

6.34

 

 

 

 


Exercisable – March 31, 2021

 

 

36,437

 

 

$

24.80

 

 

$

78.71

 

 

 

6.09

 

 

$

 

  

For the three months ended March 31, 2021 and 2020, the Company recognized stock-based compensation expense of $2,666 and $2,667, respectively, related to stock options. This expense is included in payroll and related expenses, in the accompanying condensed consolidated statements of operations.  

 

As of March 31, 2021, there was no unrecognized compensation costs related to non-vested stock options and all options have been expensed. The intrinsic value is calculated as the difference between the fair value of the stock price at year end and the exercise price of each of the outstanding stock options. The fair value of the stock price at March 31, 2021 was $4.66 per share.


Restricted Stock Units 


On March 22, 2019, a total of 15,703 of restricted stock units were granted to Mr. Galvin, Mr. Armstrong, Mr. Shetty, six employees and one consultant of the Company, under the Company's stock-based compensation plan, at the fair value of $54.00 per share, which represents the closing price of the Company's common stock on February 26, 2019, as adjusted for stock splits. Restricted stock units granted to Mr. Galvin, Mr. Armstrong, Mr. Shetty, and an aggregate of six employees and one consultant of 6,139, 772, 5,729 and an aggregate of 3,063, respectively, vest in installments over either a one-year, two-year, three-year and four-year period and will fully vest by the end of December 31, 2022. The fair value of these units upon issuance amounted to $847,957. 


On January 15, 2019 and February 26, 2019, a total of 526 of restricted stock units were granted to two of the Company’s non-employee directors, under the Incentive Plan, at the calculated fair value of $58.80 and $55.20 per share, respectively, which represents the average closing price of the Company’s common stock for the ten trading days immediately preceding and including the grant date, as adjusted for stock splits.  The restricted stock units granted on January 15, 2019 vested on January 15, 2020, subject to each individual’s continued service as a director of the Company through such date, and are payable six months after the termination of the director from the Company’s Board of Directors or death or disability. The restricted stock units granted on February 26, 2019 vested on the earlier of (A) the first anniversary of the date of the grant or (B) the date of the 2019 annual meeting of the Company’s stockholders subject to each individual’s continued service as a director of the Company through such date, and are payable six months after the termination of the director from the Board of Directors or death or disability.


Effective June 5, 2019, a total of 9,189 of restricted stock units were granted to the Company’s non-employee directors, under the Company’s stock-based compensation plan, at the calculated fair value of $16.40 per share, which represents the average closing price of the Company’s common stock for the ten trading days immediately preceding and including the grant date. Restricted stock units granted to directors on June 5, 2019 vest on the earlier of (A) the first anniversary of the date of the grant or (B) the date of the annual meeting of the Company’s stockholders that occurs in the year immediately following the date of the grant; and are payable six months after the termination of the director from the Board or death or disability.




On April 14, 2020, a total of 35,331 of restricted stock units were granted to Mr. Galvin, Mr. Armstrong, Mr. Sheeran, five employees and two consultants of the Company, under the Company's stock-based compensation plan, at the fair value of $4.76 per share, which represents the closing price of the Company's common stock on April 14, 2020. Restricted stock units granted to Mr. Galvin, Mr. Armstrong, Mr. Sheeran, and an aggregate of five employees and one consultant of 11,331, 1,000, 3,000 and an aggregate of 8,000, respectively, will vest in full on the first anniversary of the vesting commencement date and one consultant received 12,000 restricted stock units that vested immediately on April 15, 2020. The fair value of these units upon issuance amounted to $168,176. 


On April 14, 2020, a total of 12,000 of restricted stock units were granted to three of the Company’s non-employee directors, under the Incentive Plan, at the calculated fair value of $4.76 per share, which represents the closing price of the Company’s common stock on April 14, 2020. The restricted stock units granted on April 14, 2020 will fully vest on April 14, 2021, subject to each individual’s continued service as a director of the Company through such date, and are payable six months after the termination of the director from the Company’s Board of Directors or death or disability. The fair value of these units upon issuance amounted to $57,120. 


On September 23, 2020, a total of 425,000 of restricted stock units were granted to Mr. Armstrong, Mr. Sheeran, seven employees and one consultant of the Company, under the Company's stock-based compensation plan, at the fair value of $1.81 per share, which represents the closing price of the Company's common stock on September 23, 2020. Restricted stock units granted to Mr. Armstrong, Mr. Sheeran, and an aggregate of seven employees and one consultant of 50,000, 75,000 and an aggregate of 300,000, respectively, and 1/3 will vest on September 23, 2020, 1/3 on the one year anniversary of the grant date and 1/3 on the two year anniversary of the grant date. The fair value of these units upon issuance amounted to $769,250.  


On November 11, 2020, a total of 46,826 of restricted stock units were granted to three of the Company’s non-employee directors, under the Incentive Plan, at the calculated fair value of $2.39 per share, which represents the closing price of the Company’s common stock on November 11, 2020. The restricted stock units granted on November 11, 2020 will vest 1/2 on November 11, 2020 and 1/2 on the one year anniversary of the grant date, subject to each individual’s continued service as a director of the Company through such date, and are payable six months after the termination of the director from the Company’s Board of Directors or death or disability. The fair value of these units upon issuance amounted to $111,920.

 

On December 9, 2020, a total of 372,000 of restricted stock units were granted to Mr. Galvin, under the Company's stock-based compensation plan, at the fair value of $3.28 per share, which represents the closing price of the Company's common stock on December 9, 2020. Restricted stock units granted to Mr. Galvin will vest 1/2 on December 9, 2020 and 1/2 on the first year anniversary of the grant date. The fair value of these units upon issuance amounted to $1,220,160. 


For the three months ended March 31, 2021 and 2020, the Company recognized stock-based compensation of $283,520 and $36,097 related to restricted stock units. This expense is included in the payroll and related expenses, general and administrative expenses, and marketing and business development expense in the accompanying condensed consolidated statement of operations. 


The following table summarized restricted stock unit activities during the three months ended March 31, 2021:




Number of Shares

 

Non-vested balance at January 1, 2021



527,504

 

Granted





Vested

Forfeited/Expired

Non-vested balance at March 31, 2021
527,504