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Stockholders Equity
6 Months Ended
Jun. 30, 2022
Federal Home Loan Banks [Abstract]  
Stockholders Equity
Note 10 – Stockholders Equity
(a) Financing Activity
On March 2, 2021, the Company entered into an underwriting agreement with Guggenheim Securities, LLC, as representative of the several underwriters thereto, in connection with an underwritten public offering of 1,393,738 shares of the Company’s common stock at an offering price of $18.00 per share. The Offering closed on March 5, 2021 for gross proceeds of approximately $25.1 million and net proceeds of approximately $23.2 million to the Company.
(b) Stock-Based Compensation
The Company granted options to purchase 85,000 and 760,000 shares of the Company’s stock during the three and six months ended June 30, 2022 respectively. The full amount of options were granted in the first six months of 2022.
 
The Company’s stock-based compensation expense, including options and restricted stock by category is as follows:
 
    
Three Months Ended
    
Six Months Ended
 
    
June 30,
    
June 30,
 
    
2022
    
2021
    
2022
    
2021
 
Cost of revenue
  
$
1     
$
2     
$
1     
$
16  
Engineering and product development
     70        58        138        208  
Marketing and sales
     109        128        308        481  
General and administrative
     129        323        517        741  
    
 
 
    
 
 
    
 
 
    
 
 
 
     $ 309      $ 511      $ 964      $ 1446  
    
 
 
    
 
 
    
 
 
    
 
 
 
As of June 30, 2022, there was approximately $2.8 million of total unrecognized compensation cost related to unvested options and restricted stock. That cost is expected to be recognized over a weighted average period of 1.92 years.
Options granted under the Company’s stock incentive plans were valued utilizing the Black-Scholes model using the following assumptions and had the following fair values:
 
    
Three Months Ended
  
Six Months Ended
    
June 30,
  
June 30,
    
2022
  
2021
  
2022
  
2021
Average risk-free interest rate
   2.56%    N/A    1.90%    0.20%
Expected dividend yield
   None    None    None    None
Expected life
   3.5 years    3.5 years    3.5 years    3.5 years
Expected volatility
   69.7% to 70.5%    N/A    66.3% to 70.5%    66.0% to 66.0%
Weighted average exercise price
   $5.19    N/A    $5.22    $18.00
Weighted average fair value
   $1.72    N/A    $2.46    $8.37
The Company’s 2022 and 2021 average expected volatility and average expected life is based on the average of the Company’s historical information. The risk-free rate is based on the rate of U.S.
Treasury zero-coupon
issues with a remaining term equal to the expected life of option grants. The Company has paid no dividends on its common stock in the past and does not anticipate paying any dividends in the future.
The Company did not grant any shares of restricted stock during the three-months ended June 30, 2022 or 2021. The Company granted 0 and 22,488 shares of restricted stock during the six months ended June 30, 2022 and 2021, respectively.
The Company’s restricted stock awards typically vest in either one year or three equal annual installments with the first installment vesting one year from the grant date. All of the Company’s restricted stock grants in 2021 had time-based vesting requirements. The grant date fair value for restricted stock awards is based on the quoted market value of Company stock on the grant date.
A summary of stock option activity for all stock option plans for the period ended June 30, 2022 is as follows:
 
 
  
Number of
Options
 
  
Weighted Average
Exercise Price
 
  
Intrinsic
Value
 
Outstanding as of December 31, 2021
     2,486,511     
$

9.27
 
   $  3,820  
Granted
     760,000     
$

5.22
 
   $ 3  
Exercised
     (28,833   
$

2.74
 
   $ 75  
Cancelled
     (479,797   
$

12.33
 
   $ —    
    
 
 
        
 
        
Outstanding as of June 30, 2022
     2,737,881     
$
7.68
 
   $ 833  
    
 
 
        
 
        
Options Exercisable as of December 31, 2021
     1,619,855      $ 6.47
 
   $ 3,730
    
 
 
        
 
        
Options Exercisable as of June 30, 2022
     1,819,897     
$

7.44
 
   $ 830  
    
 
 
        
 
        
The Company issued 6,000 and 28,833 shares of common stock upon the exercise of outstanding stock options in the three and six months ended June 
30
, 2022, respectively. The Company received cash proceeds of approximately $13,000 and $79,000 in the three and six months ended June 
30
, 2022, respectively. The intrinsic value of restricted shares that vested in the three and six months ended June 30, 2022 was $0.0 million and $0.0 million, respectively.
There were no restricted shares that vested in the three and six months ended June 30, 2022.

Employee Stock Purchase Plan
In December 2019, the Company’s Board of Directors adopted, and the stockholders approved the 2019 Employee Stock Purchase Plan (“ESPP”), effective January 1, 2020. The ESPP provides for the issuance of up 950,000 shares of common stock, subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. The ESPP may be terminated or amended by the Board of Directors at any time. Certain amendments to the ESPP require stockholder approval.
Substantially all of the Company’s employees whose customary employment is for more than 20 hours a week are eligible to participate in the ESPP. Any employee who owns 5% or more of the voting power or value of the Company’s shares of common stock is not eligible to purchase shares under the ESPP.
Any eligible employee can enroll in the Plan as of the beginning of a respective quarterly accumulation period. Employees who participate in the ESPP may purchase shares by authorizing payroll deductions of up to 15% of their base compensation during an accumulation period. Unless the participating employee withdraws from participation, accumulated payroll deductions are used to purchase shares of common stock on the last business day of the accumulation period (the “Purchase Date”) at a price equal to 85% of the lower of the fair market value on (i) the Purchase Date or (ii) the first day of such accumulation period. Under applicable tax rules, no employee may purchase more than $25,000 worth of common stock, valued at the start of the purchase period, under the ESPP in any calendar year.
The Company issued 8,683 and 18,064 shares under the ESPP in the three and six months ended June 30, 2022 respectively. The Company recorded approximately $12,000 and $22,000 of stock-based compensation expense pursuant to ESPP for the three and six months ended June 30, 2022, respectively. The next accumulation period under the ESPP commenced on March 31, 2022 and ended on June 30, 2022, and the related shares purchased by the participants were issued in July 2022. As of June 30, 2022, the Company recorded a liability of approximately $34,000 related to employee withholdings in connection with the ESPP accumulation period ended June 30, 2022, which was included as a component of accrued expenses and other current liabilities.