Note 13 - Stock-based Compensation

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE 13 — STOCK-BASED COMPENSATION

The Company provides stock-based incentive compensation awards to eligible employees and non-employee directors. Awards that may be granted under the program include non-qualified and incentive stock options, restricted stock awards, restricted stock units ("RSU"), and performance-based restricted stock units ("PRSU") and are based on the closing price of the Company’s common stock on the date of grant. To date, awards granted under the program consist of stock options, RSUs and PRSUs. The majority of stock-based awards granted under the program vest over four years. Stock options granted under the program have a maximum contractual term of ten years.

Stock-based compensation expense recognized in the Company’s consolidated statements of operations for the years ended December 31, 2023,  January 1, 2023, and January 2, 2022, respectively is as follows (in thousands):

	Fiscal Years
Stock-based compensation expense included in:		2023		2022		2021
Cost of revenue	$	328	$	272	$	282
Research and development		595		652		843
Selling, general and administrative		1,599		1,111		1,401
Total costs and expenses	$	2,522	$	2,035	$	2,526

	Fiscal Years
Stock-based compensation expense by type of award:	2023		2022		2021
ESPP	$	127.00	$	70.00	$	110.00
RSU and PRSU		2,395		1,965		2,416
Total costs and expenses	$	2,522	$	2,035	$	2,526

 The Company capitalized stock-based compensation amounts to capitalized internal-use software and tooling, net of $248 thousand for the year ended December 31, 2023. No stock-based compensation was capitalized or included in inventories for the years ended January 1, 2023 and January 2, 2022.

Stock-Based Compensation Award Activity

A roll forward of shares available for grant under the 2019 Plan (in thousands) is as follows:

	Shares Available for Grant
Balance at January 2, 2022		594
Authorized		900
RSUs granted		(584	)
Options forfeited or expired		18
RSUs forfeited		32
Balance at January 1, 2023		960
Options forfeited or expired		15
RSUs granted		(400	)
RSUs forfeited		20
Balance at December 31, 2023		595

No stock options were granted during any of the periods presented.

Stock Options

A roll forward of stock options under the 2019 Plan is as follows: 

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Term		Aggregate Intrinsic Value
	(in thousands)					(in years)		(in thousands)
Balance outstanding at December 29, 2019		186		$	32.09
Forfeited or expired		(65	)		38.83
Balance outstanding at January 3, 2021		121			28.46
Forfeited or expired		(28	)		31.68
Balance outstanding at January 2, 2022		93			27.49
Forfeited or expired		(18	)		39.72
Balance outstanding at January 1, 2023		75			24.50
Forfeited or expired		(15	)		45.22
Outstanding, exercisable, and vested at December 31, 2023		60		$	19.45		2.27	$	86

The intrinsic value for the stock options, based on the Company’s closing stock price of $13.86 per share at December 29, 2023, the last trading day of the Company’s current reporting period, was $0 which would have been received by the option holders had all option holders exercised their options as of that date.

No options were exercised or granted during the years ended December 31, 2023,  January 1, 2023, and January 2, 2022. As of December 31, 2023, there were no unvested stock options.

Restricted Stock Units

The Company grants RSUs to employees with various vesting terms. RSUs entitle the holder to receive, at no cost, one common share for each restricted stock unit on the date vested. The Company withholds shares in settlement of employee tax withholding obligations on the vesting of restricted stock units.

As of December 31, 2023, there was approximately $3.1 million in unrecognized stock-based compensation expense related to RSUs, inclusive of unrecognized stock-based compensation related to PRSUs of $43 thousand. The remaining unrecognized stock-based compensation expense as of  December 31, 2023 is expected to be recorded over a weighted average period of 1.37 years.

A roll forward summarizing RSU activity and related weighted average grant date fair values is as follows: 

	RSUs Outstanding
	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)
Nonvested at January 3, 2021		800		$	4.99
Granted		619			5.81
Vested		(586	)		4.99
Forfeited		(265	)		5.00
Nonvested at January 2, 2022		568			5.86
Granted		584			6.11
Vested		(490	)		5.56
Forfeited		(32	)		5.35
Nonvested at January 1, 2023		630			6.05
Granted		400			8.12
Vested		(421	)		6.15
Forfeited		(20	)		6.92
Nonvested at December 31, 2023		589		$	7.35

2009 ESPP Stock Plan

The Company issued 45 thousand shares of common stock at an average price of $4.48 per share, 52 thousand shares of common stock at an average price of $4.82 per share, and 84 thousand shares of common stock at an average price of $3.14 per share to employees in the years ended December 31, 2023,  January 1, 2023, and January 2, 2022, respectively.

The weighted average grant date fair value and the weight-average assumptions used to estimate the fair value of ESPP option rights granted is as follows:

	Fiscal Years
	2023			2022			2021
Expected life (months)		6.0			6.0			6.0
Risk-free interest rate		5.30	%		3.04	%		0.05	%
Volatility		50	%		57	%		74	%
Dividend yield		—			—			—
Weighted average fair value of ESPP options granted	$	2.14		$	2.04		$	2.18