Note 8 – Share-Based Compensation

During the three months ended June 30, 2023 and 2022, selling, general and administrative expenses included $458,981 and $(180,529) of share-based compensation expense, respectively. For the three months ended June 30, 2022, share-based compensation was negative $(180,529) due to nil accrual for performance-based restricted stock units (“PSUs”) as well as the reversal of previous PSUs accrual of $973,659 as the Company no longer believed the performance criteria included in the PSUs plan was likely to be achieved. During the six months ended June 30, 2023 and 2022, selling general and administrative expenses included $1,114,568 and $686,841 of share-based compensation expense, respectively.

During the three months ended June 30, 2023 and 2022, the Company capitalized $324,423 and $432,224, respectively, of share-based compensation expense associated with awards issued to consultants who are directly associated with and who devote time to our internal-use software. During the six months ended June 30, 2023 and 2022, the Company capitalized $787,813 and $856,334, respectively, of share 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”). The 2020 EIP became effective immediately upon the closing of the Business Combination. As of June 30, 2023, of the 4,904,596 shares of Class A common stock reserved for issuance under the 2020 EIP in the aggregate, 2,935,496 shares remained available for issuance.

The 2020 EIP provides for the grant of stock options, restricted stock, restricted stock units (“RSUs”), PSUs, stock appreciation rights, other stock-based awards, and cash awards (collectively, “awards”). The awards may be granted to employees, directors, and consultants of the Company.

Restricted Stock Units

The following table summarizes the activity related to RSUs during the six months ended June 30, 2023:

As of June 30, 2023, approximately $1.7 million of unamortized share-based compensation expense was associated with outstanding RSUs, which is expected to be recognized over a remaining weighted average period of 0.42 years.

Performance-Based Restricted Stock Units

The following table summarizes the activity related to PSUs during the six months ended June 30, 2023:

As of June 30, 2023, the performance criteria included in the PSUs plan are unlikely to be achieved, and accordingly, the Company has no accrual of share-based compensation expenses associated with the outstanding PSUs. The weighted average period of 0.58 years was remaining before the expiration of outstanding PSUs.

Employee Stock Purchase Plan

In October 2020, in connection with the Business Combination, the Company’s stockholders approved the Parts iD, Inc. 2020 Employee Stock Purchase Plan (the “2020 ESPP”). There are 2,043,582 shares of Class A common stock available for issuance under the 2020 ESPP. The 2020 ESPP became effective immediately upon the closing of the Business Combination, but it has not yet been implemented. As of June 30, 2023, no shares had been issued under the 2020 ESPP.