NOTE 6 — STOCK-BASED COMPENSATION AND WARRANTS

Stock Option Plans

The Company currently has two active stock option plans consisting of the 2016 Non-Qualified Stock Option Plan, as amended (the “2016 Plan”), and the 2019 Non Qualified Stock Option Plan (the “2019 Plan”). On July 31, 2019, the 2019 Plan was adopted by the Board of Directors and provides authority to grant non-qualified stock options for up to 300,000  shares of the Company’s Common Stock. The Company also has stock options outstanding to purchase up to approximately 44,000  shares of Common Stock under the 2014 Stock and Incentive Plan (the “2014 Plan”) that terminated on March 21, 2019 and approximately 88,000 shares of Common Stock under the 2015 Stock and Incentive Plan (the "2015 Plan") that terminated on February 23, 2020. Stock options outstanding under the 2014 Plan and the 2015 Plan expire pursuant to their contractual provisions on various dates through 2029.  Presented below is a summary as of September 30, 2020 of the number of shares authorized, outstanding, and available for future grants under each of the Company’s stock option plans (in thousands):

Stock Options Outstanding

The following table sets forth a summary of the stock option activity for options with time-based vesting and hybrid vesting granted under all of the Company’s stock option plans for the three months ended September 30, 2020 (shares in thousands):

Stock-based compensation expense for the three months ended September 30, 2020 and 2019 is included in compensation and benefits under the following captions in the unaudited condensed consolidated statements of operations (in thousands):

Unrecognized stock-based compensation expense related to stock options that provide solely for time-based vesting is approximately $2.6 million as of September 30, 2020. This amount is expected to be recognized over a remaining weighted average period of 1.7 years.

In July 2019, the Company granted employee stock options for approximately  0.2 million shares that commence vesting upon the achievement of market, performance and service conditions (‘Hybrid Options”). The Hybrid Options will vest ratably over a period of 36 months beginning on the date that all of the following have occurred: (i) the option recipient has been employed by the Company for at least one year, (ii) the Company’s shares of Common Stock have been listed for trading on a national stock exchange, and (iii) such date no later than July 31, 2023, when the Company’s closing stock price exceeds  $29.00 per share for 20 trading days in any consecutive 30 day period. The Company has not recognized any expense related to these stock options through September 30, 2020, since it was not probable that the performance condition to obtain a listing on a national stock exchange would be achieved. On November 3, 2020, the Company achieved this performance condition whereby its shares of Common Stock were approved for listing on the Nasdaq Capital Market. Accordingly, unrecognized compensation cost, net of estimated forfeitures, for the Hybrid Options of approximately $1.9 million will be recognized beginning in November 2020 when compensation cost of approximately $0.5 million will be recorded for the three months ending December 31, 2020, and the remainder of approximately $1.4 million will be recognized on a straight-line basis through July 2024 when the Hybrid options are expected to be fully vested.

Warrants

The Company has issued warrants in conjunction with various debt and equity financings and for services. As of September 30, 2020, the Company had warrants outstanding for approximately 0.6 million shares with a weighted average exercise price of $57.46. The weighted average remaining contractual term until the warrants expire is approximately 2.0 years. For the three months ended September 30, 2020, no warrants were granted, expired or exercised.