|9 Months Ended|
Sep. 30, 2021
|Share-based Payment Arrangement [Abstract]|
Note 7 – Stock-Based Compensation
During the three and nine months ended September 30, 2021, selling, general and administrative expenses included $1,981,717 and $3,303,145, respectively, of stock-based compensation expense.
During the three and nine months ended September 30, 2021, the Company capitalized $921,599 and $1,338,781, respectively, of stock-based compensation expense associated with awards issued to consultants who are directly associated with and who devote time to our internal-use software.
Equity Incentive Plan
In October 2020, in connection with the Business Combination, the Company’s stockholders approved the PARTS iD, Inc. 2020 Equity Incentive Plan (the “2020 EIP”). There are 4,904,596 shares of Class A common stock available for issuance under the 2020 EIP. The 2020 EIP became effective immediately upon the closing of the Business Combination.
The 2020 EIP provides for the grant of stock options, including incentive stock options, non-qualified stock options, restricted stock, dividend equivalents, stock payments, restricted stock units, performance shares, other incentive awards, stock appreciation rights, and cash awards (collectively “awards”). The awards may be granted to employees and consultants of the Company’s affiliates and subsidiaries.
Beginning in January 2021, the Company has granted both restricted stock units (“RSUs”) and restricted performance-based stock units (“PSUs”) as described below.
Restricted Stock Units
The following table summarizes the activity related to RSUs during the nine months ended September 30, 2021:
The Company has granted RSUs that vest over a specified period, generally up to three years from the date of grant. RSUs granted include 106,806 RSUs granted to directors, of which 49,994 will vest on November 20, 2021 and the balance of 56,812 will vest on the earlier of June 8, 2022 or the date of the 2022 annual meeting of stockholders. The remaining RSUs granted during the nine months ended September 30, 2021 were to various employees, contractors and consultants and will vest, subject to the recipient’s continuity of employment or service with the Company, generally in equal installments over a period of three years.
The Company recognized $2,530,675 and $3,997,843 of stock-based compensation expense associated with RSUs for the three and nine months ended September 30, 2021, respectively. As of September 30, 2021, approximately $11.2 million of unamortized stock-based compensation expense was associated with outstanding RSUs, which is expected to be recognized over a remaining weighted average period of 2.1 years.
Performance Based Restricted Stock Units
The following table summarizes the activity related to PSUs during the nine months ended September 30, 2021:
During the nine months ended September 30, 2021, the Company granted 624,500 PSUs to several employees, contractors and consultants that contain both service and performance-based vesting conditions. The PSUs will vest in March 2024 based upon the level of achievement of several Company-specific operational performance milestones for the three years ended December 31, 2023, as determined by the Compensation Committee of the Company.
Of the 624,500 PSUs granted, 80%, or 499,600 PSUs, include net revenue performance-based vesting conditions that were established at the grant date. The remaining 20%, or 124,900 PSUs, granted are subject to cash flow performance-based vesting conditions, of which certain thresholds had not been established as of September 30, 2021. As a result, the service inception date of these remaining PSUs precedes the grant date associated with these PSUs and the recognition of compensation expense is based upon the fair value of these PSUs at September 30, 2021. See “Stock Compensation Policy” in Note 2 for more information.
During the three and nine months ended September 30, 2021, the Company recognized stock-based compensation expense associated with PSUs of $372,641 and $644,083 respectively. As of September 30, 2021, approximately $3.9 million of unamortized stock-based compensation expense was associated with outstanding PSUs, which is expected to be recognized over a weighted average period of 2.3 years.
The entire disclosure for share-based payment arrangement.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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