Stockholders' Equity

3 Months Ended

Apr. 01, 2022

Stockholders Equity Note [Abstract]

Stockholders' Equity

Note 10 — Stockholders’ Equity

Stock-Based Compensation

The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

	Three Months Ended
	April 1, 2022		April 2, 2021
Employee stock options	$	2,327	$	2,472
Restricted stock		109		166
Restricted stock units		762		537
Performance stock units		382		93
Nonemployee stock options		314		62
Total stock-based compensation expense	$	3,894	$	3,330

The Company recorded stock-based compensation costs in the following categories (in thousands):

	Three Months Ended
	April 1, 2022		April 2, 2021
Cost of sales	$	70	$	35
General and administrative		1,781		1,439
Selling and marketing		889		833
Research and development		1,154		1,023
Total stock-based compensation expense, net		3,894		3,330
Amounts capitalized as part of inventory		366		309
Total stock-based compensation expense, gross	$	4,260	$	3,639

Note 10 — Stockholders’ Equity (Continued)

Incentive Plan

The Amended and Restated Omnibus Equity Incentive Plan (“the Plan”) provides for various forms of stock-based incentives. To date, of the available forms of awards under the Plan, the Company has granted only stock options, restricted stock, unrestricted share grants, restricted stock units (“RSUs”) and performance stock units (“PSUs”). Options under the Plan are granted at fair market value on the date of grant, become exercisable generally over a three-year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Certain option and share awards provide for accelerated vesting if there is a change in control and pre-established financial metrics are met (as defined in the Plan). Grants of restricted stock outstanding under the Plan generally vest over periods of one to three years. Grants of RSUs and PSUs outstanding under the Plan generally vest based on service, performance, or a combination of both.  As of April 1, 2022, there were 2,188,629 shares available for grant under the Plan.

Assumptions

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table.  Expected volatilities are based on historical volatility of the Company’s stock. The expected term of options granted is derived from the historical exercises and post-vesting cancellations and represents the period of time that options granted are expected to be outstanding.  The Company has calculated a 5% estimated forfeiture rate based on historical forfeiture experience.  The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.  

	Three Months Ended
	April 1, 2022			April 2, 2021
Expected dividend yield		0	%		0	%
Expected volatility		54	%		53	%
Risk-free interest rate		1.71	%		0.84	%
Expected term (in years)		5.10			5.38

Stock Options

A summary of stock option activity under the Plan for three months ended April 1, 2022 is presented below:

	Stock Options (in 000’s)			Minimum Exercise Price		Maximum Exercise Price
Outstanding at December 31, 2021		2,435
Granted		388
Exercised		(49	)
Forfeited or expired		(7	)
Outstanding at April 1, 2022		2,767		$	5.34	$	154.96
Exercisable at April 1, 2022		1,997

Restricted Stock, Restricted Stock Units and Performance Stock Units

A summary of restricted stock, RSUs and PSUs activity under the Plan for the three months ended April 1, 2022 is presented below (shares in thousands):

	Restricted Stock		RSUs			PSUs
Unvested at December 31, 2021		3		131			10
Granted		—		113			113
Vested		—		(45	)		—
Unvested at April 1, 2022		3		199			123