Ring Energy, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK UNITS

EMPLOYEE STOCK OPTIONS AND RESTRICTED STOCK UNITS

6 Months Ended

Jun. 30, 2024

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

Share-based compensation expense for share-based awards during the three and six months ended June 30, 2024 and 2023 was as follows. These amounts are included in General and administrative expense in the Condensed Statements of Operations.


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Share-based compensation	$	2,077,778	$	2,260,312	$	3,801,610	$	4,204,008

In 2011, the Board of Directors (the "Board") of the Company approved and adopted a long-term incentive plan (the “2011 Plan”), which was subsequently approved and amended by the shareholders. There were 541,755 shares eligible for grant, either as stock options or as restricted stock, as of June 30, 2024.

In 2021, the Board and Company shareholders approved and adopted the Ring Energy, Inc. 2021 Omnibus Incentive Plan (the “2021 Plan”). 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 of Shareholders, the shareholders approved an amendment to the 2021 Plan to increase the number of shares available under the 2021 Plan by 6.0 million. There were 3,921,141 shares available for grant as of June 30, 2024 under the 2021 Plan.

Stock Options

A summary of the status of the stock options as of June 30, 2024 and 2023 and changes during the respective six month periods then ended are as follows:


	Options	Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding, December 31, 2022	265,500	$	4.21
Granted	—	—
Forfeited	—	—
Exercised	—	—
Outstanding, March 31, 2023	265,500	$	4.21	1.39 years	$	—
Exercisable, March 31, 2023	265,500	$	4.21	1.39 years
Granted	—	—
Forfeited	—	—
Exercised	—	—
Outstanding, June 30, 2023	265,500	$	4.21	1.14 years	$	—
Exercisable, June 30, 2023	265,500	$	4.21	1.14 years






Outstanding, December 31, 2023	70,500	$	10.33
Granted	—	—
Forfeited	—	—
Expired	(5,000)	5.50
Exercised	—	—
Outstanding, March 31, 2024	65,500	$	10.70	2.31 years	$	—
Exercisable, March 31, 2024	65,500	$	10.70	2.31 years
Granted	—	—
Forfeited	—	—
Expired	—	—
Exercised	—	—
Outstanding, June 30, 2024	65,500	$	10.70	2.06 years	$	—
Exercisable, June 30, 2024	65,500	$	10.70	2.06 years

The intrinsic values were calculated using the closing price on June 30, 2024 of $1.69 and the closing price on June 30, 2023 of $1.71. As of June 30, 2024, 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 June 30, 2024 and 2023, respectively, and changes during the respective six month periods then ended are as follows:


	Restricted Stock Units	Weighted- Average Grant Date Fair Value
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





Outstanding, December 31, 2023	3,148,226	$	2.40
Granted	2,647,970	1.30
Forfeited or rescinded	(26,802)	1.30
Vested	(1,342,112)	2.35
Outstanding, March 31, 2024	4,427,282	$	1.77
Granted	60,000	2.04
Forfeited or rescinded	(66,101)	1.43
Vested	(303,797)	2.74
Outstanding, June 30, 2024	4,117,384	$	1.70

As of June 30, 2024, the Company had $4,085,927 of unrecognized compensation cost related to restricted stock unit grants that will be recognized over a weighted average period of 2.04 years. Grant activity for the six months ended June 30, 2024 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 June 30, 2024 and 2023, respectively, along with changes during the respective six month periods then ended are as follows:


	Performance Stock Units	Weighted- Average Grant Date Fair Value
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





Outstanding, December 31, 2023	2,022,378	$	3.11
Granted	—	—
Forfeited or rescinded	—	—
Vested	—	—
Outstanding, March 31, 2024	2,022,378	$	3.11
Granted	1,378,378	$	2.27
Forfeited or rescinded	—	$	—
Vested	—	$	—
Outstanding, June 30, 2024	3,400,756	$	2.77

As of June 30, 2024, the Company had $5,771,914 of unrecognized compensation cost related to the PSU awards that will be recognized over a weighted average period of 1.83 years.