Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

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STOCK-BASED COMPENSATION
6 Months Ended
Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION

NOTE 11. STOCK-BASED COMPENSATION

 

2014 Equity Incentive Plan

 

The Company’s equity incentive plan created in 2014 (the “2014 Plan”) was amended in 2018 to increase the number of shares of Company common stock available for issuance. Pursuant to the 2014 Plan, 141,326 shares of common stock were reserved for issuance. As of June 30, 2022, there were no shares available for grant under the 2014 Plan.

 

AYRO 2017 Long Term Incentive Plan

 

The Company has reserved a total of 477,983 shares of its common stock pursuant to the AYRO, Inc. 2017 Long-Term Incentive Plan. The Company had 128,606 shares of common stock outstanding under the plan at June 30, 2022. At June 30, 2022, no shares remained available for grant under future awards under the 2017 Long-Term Incentive Plan.

 

AYRO 2020 Long Term Incentive Plan

 

The Company has reserved a total of 4,089,650 shares of its common stock pursuant to the AYRO, Inc. 2020 Long-Term Incentive Plan (the “Plan”), including shares of restricted stock that have been issued. The Company had awards concerning an aggregate of 1,570,232 shares of common stock outstanding under the Plan at June 30, 2022, including stock options and restricted stock. At June 30, 2022, 1,243,715 shares remained available for grant under future awards under the Plan.

 

Stock-based compensation, including restricted stock awards, stock options and warrants is included in the unaudited condensed consolidated statement of operations as follows:

 

                                 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2022     2021     2022     2021  
Research and development   $ (6,904 )   $ 20,708     $ 9,800   $ 44,194  
Sales and marketing     870       60,633       13,815       124,082  
General and administrative     309,587       1,556,730       568,048       3,169,218  
Total   $ 303,553     $ 1,638,071     $ 591,663     $ 3,337,494  

 

Options

 

The following table reflects the stock option activity:

 SCHEDULE OF STOCK-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY

    Number of Shares     Weighted Average
Exercise Price
   

Contractual Life

(Years)

 
Outstanding at December 31, 2021     1,338,675     $ 5.14       8.26  
Granted     173,500       0.97          
Forfeitures     (723,629 )     3.14          
Outstanding at June 30, 2022     788,546     $ 6.08       8.13  

 

Of the outstanding options, 607,633 were vested and exercisable as of June 30, 2022. At June 30, 2022 the aggregate intrinsic value of stock options vested and exercisable was $0.

 

The Company recognized $(6,298) and $231,059 of stock option expense for the three months ended June 30, 2022 and 2021, and $26,078 and $500,953 for the six months ended June 30, 2022 and June 30, 2021, respectively. Total compensation cost related to non-vested stock option awards not yet recognized as of June 30, 2022 was $210,538 and will be recognized on a straight-line basis through the end of the vesting periods through December 2023. The amount of future stock option compensation expense could be affected by any future option grants or by any forfeitures.

 

The Company uses the following inputs when valuing stock-based awards.

 

   

For the six months ended June 30, 2022

 
Company Common Stock as of Grant Date May 6, 2022     0.97  
Time to Maturity     6  
Dividend     -  
Annual risk-free interest rate     2.04 %
Annualized volatility     130.23 %
Black-Scholes Value     0.87  

 

Restricted Stock

 

    Number of
Shares
    Weighted
Average Grant
Price
 
Outstanding at December 31, 2021     450,000     $ 2.48  
Granted     442,248       1.29  
Vested     (110,562 )     1.29  
Outstanding at June 30, 2022     781,686     $ 1.98  

 

 

On February 1, 2022, pursuant to the Plan, the Company issued 442,248 shares of restricted stock to non-executive directors at a value of $1.29 per share. The Company recognized compensation expense related to all restricted stock during the three months ended June 30, 2022 and 2021 of $309,850 and $198,763 and for the six months ended June 30, 2022 and 2021 of $565,585 and $699,528, respectively. Total compensation cost related to non-vested restricted stock not yet recognized as of June 30, 2022 was $941,803.