Stockholders' Equity

6 Months Ended

Jul. 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				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Employee stock options	$	2,457	$	2,784	$	4,784	$	5,256
Restricted stock		442		232		551		398
Restricted stock units		1,231		811		1,993		1,348
Performance stock units		1,310		108		1,692		201
Nonemployee stock options		314		57		628		119
Total stock-based compensation expense	$	5,754	$	3,992	$	9,648	$	7,322

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

	Three Months Ended				Six Months Ended
	July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Cost of sales	$	106	$	54	$	176	$	89
General and administrative		2,806		1,815		4,587		3,254
Selling and marketing		1,324		953		2,213		1,786
Research and development		1,518		1,170		2,672		2,193
Total stock-based compensation expense, net		5,754		3,992		9,648		7,322
Amounts capitalized as part of inventory		652		390		1,018		699
Total stock-based compensation expense, gross	$	6,406	$	4,382	$	10,666	$	8,021

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 July 1, 2022, there were 2,156,185 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						Six Months Ended
	July 1, 2022			July 2, 2021			July 1, 2022			July 2, 2021
Expected dividend yield		0	%		0	%		0	%		0	%
Expected volatility		54	%		53	%		54	%		53	%
Risk-free interest rate		3.27	%		0.83	%		1.83	%		0.84	%
Expected term (in years)		5.10			5.38			5.10			5.38

Stock Options

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

	Stock Options (in 000’s)			Minimum Exercise Price		Maximum Exercise Price
Outstanding at December 31, 2021		2,435
Granted		421
Exercised		(251	)
Forfeited or expired		(16	)
Outstanding at July 1, 2022		2,589		$	5.34	$	154.96
Exercisable at July 1, 2022		1,873

Restricted Stock, Restricted Stock Units and Performance Stock Units

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

	Restricted Stock			RSUs			PSUs
Unvested at December 31, 2021		3			131			10
Granted		6			113			113
Vested		(5	)		(45	)		(5	)
Unvested at July 1, 2022		4			199			118