TELOS CORP
For the period ended Mar 31, 2024. Filed May 10, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 10, 2024
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. Stock-Based Compensation
- STOCK-BASED COMPENSATION
The Company grants stock-based compensation awards under the 2016 Omnibus Long-Term Incentive Plan, as amended (the "2016 LTIP"). We may grant restricted stock awards, restricted stock units with time-based vesting ("RSUs") and restricted stock units with performance-based vesting ("PSUs"). Awards granted under the 2016 LTIP vest over the periods determined by the Board of Directors or the Compensation Committee of the Board of Directors, which has the discretion to establish the terms, conditions and criteria of the various awards. The RSUs granted to eligible employees generally vest in installments over a period of up tothree years. PSUs will vest upon the achievement of a defined performance target or market conditions for the Company's common stock, certain operational milestones over prescribed period, or at the end of the defined performance period from the date of grant.
There were no income tax benefits recognized on the share-based compensation expense for both periods.
| Table 11.1: Details of Stock Compensation Expense by Department | ||
|---|---|---|
| For the Three Months Ended | ||
| March 31, 2024 | March 31, 2023 | |
| (in thousands) | ||
| Cost of sales – services | $257 | $326 |
| Research and development | 428 | 770 |
| Selling, general and administrative | 2,299 | 8,403 |
| Total | $2,984 | $9,499 |
Restricted Stock
| Table 11.2: Restricted Stock Activity | ||||
|---|---|---|---|---|
| Service-Based | Performance-Based | Total Shares | Weighted-Average Grant Date Fair Value | |
| Unvested outstanding units as of December 31, 2023 | 2,132,613 | 43,800 | 2,176,413 | $5.07 |
| Granted | 36,626 | — | 36,626 | 3.84 |
| Vested | (1,260,068) | — | (1,260,068) | 4.60 |
| Forfeited | (15,000) | — | (15,000) | 4.25 |
| Unvested outstanding units as of March 31, 2024 | 894,171 | 43,800 | 937,971 | $5.68 |
As of March 31, 2024, the intrinsic value of the RSUs and PSUs outstanding, exercisable, and vested or expected to vest was $3.9 million. There was approximately $2.1 million of total compensation costs related to stock-based awards not yet recognized as of March 31, 2024, which is expected to be recognized on a straight-line basis over a weighted-average remaining vesting period of 0.7 years.
Stock Options
| Table 11.3: Stock Option Activity | ||||
|---|---|---|---|---|
| Stock Options Outstanding | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |
| Outstanding option balance as of December 31, 2023 | 400,000 | $1.80 | 9.4 | $740,000 |
| Granted | — | — | 0.0 | — |
| Exercised | — | — | 0.0 | — |
| Forfeited, cancelled, or expired | — | — | 0.0 | — |
| Outstanding option balance as of March 31, 2024 | 400,000 | 1.80 | 9.1 | $944,000 |
| Exercisable stock option as of March 31, 2024 | — | — | 0 | $— |
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the quoted closing price of the Company's common stock as of March 31, 2024.
The fair value of the stock options is expensed on a straight-line basis over the vesting period ofone year, including the stock options granted to directors, as the next annual stockholders meeting is expected to occur at the same approximate time each year.
As of March 31, 2024, there were approximately $0.04 million of unrecognized compensation costs related to non-vested stock options.
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