Equity Incentive Plans

12 Months Ended

Dec. 31, 2021

Stockholders' Equity Note [Abstract]

Equity Incentive Plans

Note 17 – Equity Incentive Plans

In May 2016, the stockholders of the Company approved the 2016 Employee Equity Incentive Plan (the “2016 Employee Plan”), which authorized the Compensation Committee of the Board of Directors (the “Committee”) to grant a maximum of 1,000 shares of equity based and other performance based awards to executive officers and other key employees of the Company. The term of the 2016 Employee Plan expires on February 4, 2026. In May 2017, the stockholders of the Company approved an amendment to the 2016 Employee Plan to increase the annual individual award limits relating to stock options and stock appreciation rights from 100 to 250 shares of common stock. In June 2018, the stockholders of the Company approved an amendment to the 2016 Employee Plan to increase the maximum number of equity based and other performance awards to 3,000. The Committee determines the recipients and the terms of the awards granted under the 2016 Employee Plan, including the type of awards, exercise price, number of shares subject to the award and the exercisability thereof.

In May 2005, the stockholders of the Company approved the 2005 Employee Equity Incentive Plan (the “Employee Plan”), which initially authorized the Compensation Committee of the Board of Directors (the “Committee”) to grant a maximum of 500 shares of equity based and other performance based awards to executive officers and other key employees of the Company. In May 2007, the stockholders of the Company approved an amendment to the Employee Plan to increase the maximum number of equity based and other performance awards to 1,100. In May 2010, the stockholders of the Company approved an amendment to the Employee Plan to increase the maximum number of equity based and other performance awards to 1,600. In May 2014, the stockholders of the Company approved the amendment and restatement of the Employee Plan to extend the term of the Employee Plan to February 7, 2024 and increase the maximum number of equity based and other performance awards to 2,600. In June 2018, the stockholders of the Company approved an amendment to the Employee Plan to increase the maximum number of equity based and other performance awards to 2,700. The Committee determines the recipients and the terms of the awards granted under the Employee Plan, including the type of awards, exercise price, number of shares subject to the award and the exercisability thereof.

In May 2016, the stockholders of the Company approved the 2016 Director Equity Incentive Plan (the “2016 Director Plan”). The 2016 Director Plan authorizes the Board of Directors (the “Board”) to grant a maximum of 400 shares of equity based and other performance-based awards to non-employee directors of the Company. The term of the 2016 Director Plan expires on February 4, 2026. The Board determines the recipients and the terms of the awards granted under the 2016 Director Plan, including the type of awards, exercise price, number of shares subject to the award and the exercisability thereof.

In May 2005, the stockholders of the Company approved the 2005 Director Equity Incentive Plan (the “Director Plan”). The Director Plan authorizes the Board of Directors (the “Board”) to grant a maximum of 200 shares of equity based and other performance-based awards to non-employee directors of the Company. In May 2010, the stockholders of the Company approved an amendment to the Director Plan to increase the maximum number of equity based and other performance awards to 400. In May 2014, the stockholders of the Company approved the amendment and restatement of the Director Plan to extend the term of the Director Plan to February 7, 2024 and increase the maximum number of equity based and other performance awards to 600. The Board determines the recipients and the terms of the awards granted under the Director Plan, including the type of awards, exercise price, number of shares subject to the award and the exercisability thereof.

The Company issues performance-based stock options to employees. The Company estimates the fair value of performance stock option awards using the Black-Scholes-Merton option pricing model. Compensation expense for stock option awards is amortized on a straight-line basis over the awards’ vesting period.

The expected term of the stock options represents the average period the stock options are expected to remain outstanding and is based on the expected term calculated using the approach prescribed by the Securities and Exchange Commission’s Staff Accounting Bulletin No. 110 for “plain vanilla” options. The expected stock price volatility for the Company’s stock options was determined by using an average of the historical volatilities of the Company. The Company will continue to analyze the stock price volatility and expected term assumptions as more data for the Company’s common stock and exercise patterns become available. The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company does not estimate forfeitures based on historical experience but rather reduces compensation expense when they occur.

The fair value of employee stock options is being amortized on a straight-line basis over the requisite service periods of the respective awards. The fair value of employee stock options was estimated using the following weighted-average assumptions:

	Years ended December 31,
	2021			2020
Fair value of the company’s common stock on date of grant	$	1.513		$	0.595
Expected term		6.5 years			6.5 years
Risk free interest rate		1.13	%		0.44	%
Dividend yield		0.00	%		0.00	%
Volatility		79.0	%		79.0	%
Fair value of options granted	$	1.06		$	0.41

The following table summarizes total stock-based compensation costs recognized for the years ended December 31, 2021 and 2020:

	Years ended December 31,
	2021		2020
Cost of goods sold	$	42	$	40
Selling expenses		77		40
General and administrative		343		227
Research and development		100		97
Total	$	562	$	404

The following table summarizes information about stock-based awards outstanding for the year ended December 31, 2021:

Plan	Stock Options
2016 Employee Plan		1,974
2016 Director Plan		649
Other		500
2005 Employee Plan		865
2005 Director Plan		261
		4,249
Stock-based awards available for grant as of December 31, 2021		648

Stock options award activity for the year ended December 31, 2021 is as follows:

	Number of shares			Weighted- Average Exercise Price		Weighted- Average Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2021		3,998		$	0.86
Options granted		616			1.44
Options exercised		(99	)		0.89
Options forfeited		(54	)		1.10
Options expired		(212	)		1.61
Outstanding at December 31, 2021		4,249		$	0.90		5.2	$	55
Exercisable at December 31, 2021		2,970		$	0.85		5.3	$	18

During the year ended December 31, 2021, the Company granted options under the 2016 Employee Plan and the 2016 Director Plan to purchase 616 shares of common stock to its employees and directors. The fair value of these options was approximately $634.

The aggregate intrinsic value of stock options is calculated as the difference between exercise price of the underlying stock options and the fair value of the Company’s common stock or $0.59 per share at December 31, 2021.

The Company does not capitalize any cost associated with stock-based compensation.

The Company issues new shares of common stock (or reduces the amount of treasury stock) upon exercise of stock options or release of restricted stock awards.

As of December 31, 2021, the unamortized stock compensation expense was approximately $482. 

The following table represents warrant activity for the year ended December 31, 2021:

	Number of shares			Weighted-Average Exercise Price		Weighted-Average Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2021		887		$	1.17
Warrants granted		42			0.73
Warrants exercised		(88	)		0.70
Warrants forfeited		-			-
Warrants expired		-			-
Outstanding at December 31, 2021		841		$	1.21		2.25	$	1
Exercisable at December 31, 2021		779		$	1.22		2.11	$	1

In May 2020, the Company issued a 5-year warrant to purchase 22 shares of common stock of the Company to VFT Special Ventures, Ltd. a Delaware corporation (“VFT”). The warrant was granted as partial consideration in connection with the placement fee for the Subordinated Loan Facility (see Note 7). The warrant is exercisable at $0.55 per share and vested immediately. The fair value of the warrant was $9.

In January 2021, the Company issued a 5-year warrant to purchase 42 shares of common stock of the Company to VFT Special Ventures, Ltd. a Delaware corporation (“VFT”). The warrant was granted as partial consideration in connection with the placement fee for the Subordinated Loan Facility (see Note 7). The warrant is exercisable at $1.00 per share and vested immediately. The fair value of the warrant was $60.