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, 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 nine months ended September 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
Nine Months Ended
September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023
Share-based compensation $ 32,087  $ 2,170,735  $ 3,833,697  $ 6,374,743 
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 September 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 5,107,795 shares available for grant as of September 30, 2024 under the 2021 Plan.
Stock Options
A summary of the status of the stock options as of September 30, 2024 and 2023 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, 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
Granted — — 
Forfeited — — 
Exercised — — 
Outstanding, September 30, 2023 265,500 $ 4.21  0.89 years $ — 
Exercisable, September 30, 2023 265,500 $ 4.21  0.89 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
Granted — $ — 
Forfeited — $ — 
Expired — $ — 
Exercised — $ — 
Outstanding, September 30, 2024 65,500 $ 10.70  1.81 years $ — 
Exercisable, September 30, 2024 65,500 $ 10.70  1.81 years
The intrinsic values were calculated using the closing price on September 30, 2024 of $1.60 and the closing price on September 30, 2023 of $1.95. As of September 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 September 30, 2024 and 2023, 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, 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 
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 
Granted 76,600  1.97 
Forfeited or rescinded (399,552) 1.67 
Vested (57,338) 2.38 
Outstanding, September 30, 2024 3,737,094  $ 1.70 
As of September 30, 2024, the Company had $2,925,708 of unrecognized compensation cost related to restricted stock unit grants that will be recognized over a weighted average period of 1.87 years. Grant activity for the nine months ended September 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 September 30, 2024 and 2023, 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, 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 
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 
Granted —  — 
Forfeited or rescinded (863,702) 2.75 
Vested —  — 
Outstanding, September 30, 2024 2,537,054  $ 2.77 
As of September 30, 2024, the Company had $4,353,631 of unrecognized compensation cost related to the PSU awards that will be recognized over a weighted average period of 1.67 years.