Quarterly report pursuant to Section 13 or 15(d)

EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK UNITS

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EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK UNITS
 9 Months Ended
Sep. 30, 2023
EMPLOYEE STOCK OPTIONS, RESTRICTED STOCK AWARD PLAN AND 401(k)  
EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK UNITS
NOTE 11 — EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK UNITS
Compensation expense charged against income for share-based awards during the three and nine months ended September 30, 2023 and 2022 was as follows. These amounts are included in General and administrative expense in the Condensed Statements of Operations.
Three Months Ended
Nine Months Ended
September 30, 2023 September 30, 2022 Sep. 30, 2023 Sep. 30, 2022
Share-based compensation $ 2,170,735  $ 1,543,033  $ 6,374,743  $ 4,964,188 
In 2011, the Board approved and adopted a long-term incentive plan (the “2011 Plan”), which was subsequently approved and amended by the shareholders. There were 341,755 shares eligible for grant, either as stock options or as restricted stock, as of September 30, 2023.
In 2021, the Board approved and adopted the Ring Energy, Inc. 2021 Omnibus Incentive Plan (the “2021 Plan”), which was subsequently approved by the shareholders at the 2021 Annual Meeting. The 2021 Plan provides that the Company may grant options, stock appreciation rights, restricted shares, restricted stock units, performance-based awards, other share-based awards, other cash-based awards, or any combination of the foregoing. At the 2023 Annual Meeting, the
shareholders approved a Plan Amendment to increase the number of shares available under the 2021 Plan by 6.0 million. Accordingly, there were 8,224,394 shares available for grant as of September 30, 2023 under the 2021 Plan.
Stock Options
A summary of the status of the stock options as of September 30, 2023 and 2022 and changes during the respective nine month periods then ended are as follows:
Options Weighted-
Average
Exercise Price		 Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value
Outstanding, December 31, 2021 365,500 $ 3.61 
Granted — — 
Forfeited or rescinded — — 
Exercised — — 
Outstanding, March 31, 2022 365,500 $ 3.61  2.21 years $ 536,900 
Granted — — 
Forfeited or rescinded — — 
Exercised (100,000) 2.00 
Outstanding, June 30, 2022 265,500 $ 4.21  2.14 years $ 128,700 
Granted — — 
Forfeited or rescinded — — 
Exercised — — 
Outstanding, September 30, 2022 265,500 $ 4.21  1.89 years $ 62,400 
Exercisable, September 30, 2022 265,500 $ 4.21  1.89 years
Outstanding, December 31, 2022 265,500 $ 4.21 
Granted — — 
Forfeited or rescinded — — 
Exercised — — 
Outstanding, March 31, 2023 265,500 $ 4.21  1.39 years $ — 
Granted — — 
Forfeited or rescinded — — 
Exercised — — 
Outstanding, June 30, 2023 265,500 $ 4.21  1.14 years $ — 
Granted — $ — 
Forfeited or rescinded — $ — 
Exercised — $ — 
Outstanding, September 30, 2023 265,500 $ 4.21  0.89 years $ — 
Exercisable, September 30, 2023 265,500 $ 4.21  0.89 years
The intrinsic values were calculated using the closing price on September 30, 2023 of $1.95 and the closing price on September 30, 2022 of $2.32. As of September 30, 2023, the Company had $0 of unrecognized compensation cost related to stock options.
Restricted Stock Units
A summary of the restricted stock unit activity as of September 30, 2023 and 2022, respectively, and changes during the respective nine month periods then ended are as follows:
Restricted Stock Units Weighted-
Average Grant
Date Fair Value
Outstanding, December 31, 2021 2,572,596  $ 1.75 
Granted 1,247,061  2.79 
Forfeited or rescinded —  — 
Vested —  — 
Outstanding, March 31, 2022 3,819,657  $ 2.09 
Granted 19,642 $ 4.27 
Forfeited or rescinded (17,204) $ 2.79 
Vested (610,195) $ 2.80 
Outstanding, June 30, 2022 3,211,900 $ 1.97 
Granted 126,570 2.95 
Forfeited or rescinded —  — 
Vested (9,851) 2.69 
Outstanding, September 30, 2022 3,328,619 $ 2.00 
Outstanding, December 31, 2022 2,623,790  $ 2.29 
Granted 2,270,842  2.22 
Forfeited or rescinded (11,712) 2.22 
Vested (659,479) 2.80 
Outstanding, March 31, 2023 4,223,441  $ 2.17 
Granted —  $ — 
Forfeited or rescinded (49,465) $ 2.22 
Vested (288,709) $ 2.85 
Outstanding, June 30, 2023 3,885,267 $ 2.12 
Granted —  — 
Forfeited or rescinded (4,997) 2.22 
Vested (39,443) 2.87 
Outstanding, September 30, 2023 3,840,827 $ 2.12 
As of September 30, 2023, the Company had $3,928,247 of unrecognized compensation cost related to restricted stock unit grants that will be recognized over a weighted average period of 1.85 years. Grant activity for the nine months ended September 30, 2023 was primarily restricted stock units for the annual long-term incentive plan awards for employees.
Performance Stock Units
A summary of the status of the performance stock unit ("PSU") grants as of September 30, 2023 and 2022, respectively, along with changes during the respective nine month periods then ended are as follows:
Performance Stock Units Weighted-
Average Grant
Date Fair Value
Outstanding, December 31, 2021 860,216  $ 3.87 
Granted 860,216  3.65 
Forfeited or rescinded —  — 
Vested —  — 
Outstanding, March 31, 2022 1,720,432  $ 3.76 
Granted —  $ — 
Forfeited or rescinded —  $ — 
Vested —  $ — 
Outstanding, June 30, 2022 1,720,432  $ 3.76 
Granted —  — 
Forfeited or rescinded —  — 
Vested —  — 
Outstanding, September 30, 2022 1,720,432  $ 3.76 
Outstanding, December 31, 2022 1,720,432  $ 3.76 
Granted 1,162,162  2.71 
Forfeited or rescinded —  — 
Vested —  — 
Outstanding, March 31, 2023 2,882,594  $ 3.34 
Granted —  $ — 
Forfeited or rescinded —  $ — 
Vested —  $ — 
Outstanding, June 30, 2023 2,882,594  $ 3.34 
Granted —  — 
Forfeited or rescinded —  — 
Vested —  — 
Outstanding, September 30, 2023 2,882,594  $ 3.34 
As of September 30, 2023, the Company had $5,314,823 of unrecognized compensation cost related to the PSU awards that will be recognized over a weighted average period of 1.60 years.