Note 10 - Stockholders' Equity and Stock-based Compensation

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

(10) Stockholders' Equity and Stock-based Compensation

Registered Direct Offering

On February 16, 2021, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) which provided for the sale and issuance by the Company of an aggregate of 2,990,001 shares (the “Shares”) of the Company’s common stock, $0.01 par value per share (the “Common Stock”) at an offering price of $3.50 per share for gross proceeds of approximately $10.5 million before deducting the placement agent’s fees and related offering expenses. The Securities Purchase Agreement contained customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties and termination provisions. The Company used the net proceeds for working capital and general corporate purposes.

The Registered Direct Offering was made pursuant to a Registration Statement (No. 333-234606) on Form S-3, which was filed by the Company with the SEC on November 8, 2019, as amended on December 19, 2019, and declared effective on December 23, 2019.

Stock-Based Compensation

The total number of shares issued or reserved for future issuance under outstanding stock options at March 31, 2021 and 2020 was 481,786 and 669,209, respectively, and the total number of shares of restricted stock and shares reserved for restricted stock units outstanding at March 31, 2021 and 2020 was 689,931 and 903,204, respectively. The total number of stock appreciation rights (“SARs”) awards outstanding at March 31, 2021 and 2020 was 662,591 and 937,597, respectively. The following table presents a summary of the activity related to stock options, restricted stock, restricted stock unit awards and SARs awards for the three months ended March 31, 2021:

				Restricted Stock			Stock Appreciation
	Stock Options			and Units Awards			Rights
Outstanding at January 1, 2020		533,320			732,707			754,582
Increase in shares authorized		—			23,533			—
Granted		—			—			—
Stock options and SARs exercised/restricted stock and unit awards vested		—			(24,365	)		(5,000	)
Cancelled/forfeited		(51,534	)		(41,944	)		(86,991	)
Outstanding at March 31, 2021		481,786			689,931			662,591

Stock-based compensation expense recognized for the three months ended March 31, 2021 and 2020, totaled $0.3 million and $0.6 million, respectively. SARs expense (credit) recognized for the three months ended March 31, 2021 and 2020, totaled zero and $(1.1) million, respectively.

SARs awards are considered liability awards as they are ultimately settled in cash. As such, these amounts are incrementally accrued in the liability section of the condensed consolidated balance sheets over the service period. All of the Company’s currently outstanding SARs awards achieve vesting through both a market condition and a service condition. SARs awards that are fully vested under both conditions are measured at intrinsic value (i.e. the difference between the market price on the last day of the quarter and the strike price of the awards times the number of awards vested and outstanding) and marked to market each quarter until settled. SARs awards that are not fully vested are incrementally accrued over the service period and adjusted to their fair value each quarter until settled based on a valuation model. The Company calculated the fair value of each award at  March 31, 2021 and December 31, 2020 using a Monte Carlo simulation model. The following assumptions were used:

Risk-free interest rates	0.7	%
Expected lives (in years)	5.31
Expected dividend yield	—	%
Expected volatility	94.7	%

At-The-Market Equity Offering Program

On April 26, 2021, the Company filed a prospectus supplement under which it may sell up to $10.0 million of its common stock through an "at-the-market" equity offering program (the "ATM Program"). The Company intends to use the net proceeds from sales under the ATM Program for working capital and general corporate purposes. The timing of any sales will depend on a variety of factors to be determined by the Company.