• Filing Date: 2020-07-09
  • Form Type: 10-Q
  • Description: Quarterly report
v3.20.2
Stock-based Compensation
6 Months Ended
May 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock-based Compensation
Stock-based Compensation

On June 27, 2017, the shareholders of the Company voted to amend, and the Company amended, the Amended and Restated 2010 Omnibus Incentive Plan (as amended, the "Omnibus Plan") to increase the number of shares authorized for issuance thereunder by 9,900,000 shares. Awards under the Omnibus Plan may consist of incentive awards, stock options, stock appreciation rights, performance shares, performance units, and shares of common stock, restricted stock, restricted stock units or other stock-based awards as determined by the compensation committee of the Company's board of directors. The Omnibus Plan has an aggregate of 12,600,000 shares of common stock authorized for issuance thereunder, subject to adjustment as provided therein.

Options

As of November 30, 2019, all options to purchase shares of common stock issued by the Company were fully vested with 85,000 exercisable. There was no stock-based compensation expense relating to stock options granted under the Omnibus Plan during the three months and six months ended May 31, 2020 and May 31, 2019, respectively.

As of May 31, 2020, options to purchase 85,000 shares of common stock were outstanding under the Omnibus Plan at a weighted average exercise price of $6.94 per share. The options were issued on June 6, 2013 and expire seven years after the date of grant which will be June 6, 2020. The following table presents the activity of the Company’s outstanding stock options to purchase common stock for the six months ended May 31, 2020:

Common Stock Options
 
Number of
Shares
 
Weighted
Average Exercise Price
per Share
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
Outstanding Balance, December 1, 2019
 
85,000

 
$
6.94

 
0.55

 
$

Options granted
 

 

 

 


Options exercised
 

 

 

 


Options forfeited
 

 
$

 

 


Options expired
 

 

 

 


Options outstanding, May 31, 2020
 
85,000

 
$
6.94

 
0.02

 
$

Exercisable at May 31, 2020
 
85,000

 
$
6.94

 
0.02

 


Unvested at May 31, 2020
 

 

 

 
$


As of May 31, 2020, all outstanding stock options had an exercise price above the fair market value of the common stock on that date. There are no remaining unamortized amounts to be recognized on these options.

Restricted Stock

The Company incurred stock-based compensation expense of approximately $22,000 and $97,000 relating to restricted stock granted to certain employees during the three months ended May 31, 2020 and 2019 respectively, and $53,000 and $195,000 during the six months ended May 31, 2020 and 2019, respectively.

During the year ended December 31, 2017, the Company granted 2,000,000 shares of restricted stock units to certain employees under the Omnibus Plan, which are subject to a two year vesting period that commenced on the date of grant. The fair value of the unvested restricted stock was valued at approximately $745,000 based on the closing price of the Company's shares on the day prior to the grant date. Approximately 750,000 shares of restricted stock vested during the eleven months ended November 30, 2018, 1,000,000 during the during the twelve months ended November 30, 2019 and 250,000 during the six months ended May 31, 2020 with 0 unvested at May 31, 2020. The Company incurred stock-based compensation expense of approximately $0 and $89,000 during the three months ended May 31, 2020 and 2019, respectively, with $10,000 and $181,000 during the six months ended May 31, 2020 and 2019, respectively, related to these 2,000,000 shares of restricted stock.
During the eleven months ended November 30, 2018, the Company granted 150,000 shares of restricted stock units to certain employees under the Omnibus Plan, with 100,000 shares and 50,000 subject to a two and three year vesting period, respectively, that commenced on the date of grant. The fair value of the unvested restricted stock was valued at approximately $58,000 based on the closing price of the Company's shares on the day prior to the grant date. Approximately 66,667 shares of restricted stock vested during the twelve months ended November 30, 2019, with 50,000 and 83,333 vested during the three months and six months ended May 31, 2020 with 0 unvested at May 31, 2020. The Company incurred stock-based compensation expense of approximately $1,000 and $7,000 during the three months ended May 31, 2020 and 2019, respectively, with $14,000 and $13,000 during the six months ended May 31, 2020 and 2019, related to these 150,000 shares of restricted stock.

During the six months ended May 31, 2020, the Company, granted 1,000,000 shares of restricted common stock to its Chief Executive Officer, vesting in thirds upon the first three anniversaries of the grant date. The fair value of the unvested restricted stock was valued at approximately $250,000 based on the closing price of the Company's shares on the day prior to the grant date. The Company incurred stock-based compensation expense of approximately $21,000 and $29,000 related to these 1,000,000 shares of restricted stock during the six months ended May 31, 2020. All 1,000,000 shares remained unvested at May 31, 2020.


The following table presents the activity of the Company’s unvested shares of restricted stock for the three months ended May 31, 2020:
Common Unvested Shares
Number of
Shares
Outstanding Balance, December 1, 2019
333,333

Granted
1,000,000

Vested
(333,333
)
Forfeited

Outstanding May 31, 2020
1,000,000



The aggregate intrinsic value of the award of these 1,000,000 shares is $340,000 and the remaining weighted average life of these awards is 2.66 years as of May 31, 2020. As of May 31, 2020, a total of $221,000 in stock based compensation remained unrecognized.

Stock Appreciation Rights (SARs)

During the twelve months November 30, 2019, the Company issued 100,000 SARs to the sole non-employee member of the ad hoc Capital Structure Committee of the Board, which will expire 10 years after the date the SARs were granted. The SARs will vest on the later of (i) September 30, 2018 and (ii) termination of the director's service on the Committee and had a fair value of $9,000 on the grant date. Each SAR entitles the holder to receive, upon exercise, an amount equal to the excess of (a) the fair market value per share of stock on the exercise date, over (b) the exercise price, which is $1.00, being not less than the fair market value per share of stock on the grant date. Upon exercise of the SARs, the stock appreciation amount shall be paid, as determined solely at the discretion of the Company, in (a) whole shares, (b) cash, or (c) a combination of both cash and shares. The 100,000 SARs vested during the eleven months November 30, 2018 and remain unexercised at May 31, 2020.