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Note 15 - Share-based Compensation

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 15. Share-Based Compensation

Equity Plans

The Company’s board of directors and stockholders approved the following equity plans:

●

the 2013 Equity Incentive Plan ("2013 Plan")

	●	the 2021 Equity Incentive Plan ("2021 Plan")
	●	the 2023 Equity Inducement Plan ("Inducement Plan")

The Company issued stock options, restricted stock awards ("RSAs") and restricted stock units ("RSUs") to employees, consultants and non-employee directors. Stock option awards generally vest over a four-year period and have a maximum term of ten years. Stock options under these plans have been granted with an exercise price equal to the fair market value on the date of the grant. Nonqualified and Incentive Stock Options, RSAs and RSUs may be granted from these plans. Prior to the Company’s initial public offering in September 2013, the fair market value of the Company’s stock had been historically determined by the board of directors and from time to time with the assistance of third-party valuation specialists.

Stock Options

Options have been granted to the Company’s employees under the 2013 Plan and generally become exercisable as to 25% of the shares on the first anniversary date following the date of grant and 12.5% on a semi-annual basis thereafter. All options expire ten years after the date of grant.

The following is a summary of option activity:

										*Weighted*								*Weighted*
						*Weighted*				*Average*								*Average*
						*Average*				*Share Price*				*Weighted*				*Remaining*				*Aggregate*
		*Number of*				*Exercise*				*on Date of*				*Average*				*Contractual*				*Intrinsic*
		*shares*				*Price*				*Exercise*				*Fair Value*				*Life*				*Value*
		(in thousands, except price data and Contractual Life)
Outstanding at January 1, 2024			1			$	13.84				—			$	7.12				0.08			$	8
Exercised			—				13.84				—				7.12				—				2
Forfeited			(1	)			13.84				—				7.12				—				—
Outstanding, March 31, 2024			—				—				—				—				—				—
Exercisable, March 31, 2024			—				—				—				—				—				—
Vested and expected to vest			—				—				—				—				—				—

As of March 31, 2024, there was no unrecognized stock option expense.

Performance Based Incentive

The Company approved to grant restricted performance stock units ("PSUs") to senior executives as a part of our long-term equity compensation program starting from June 2021. The number of shares of common stock that will ultimately be issued to settle PSUs granted ranges from 0% to 200% of the number granted and is determined based on certain performance criteria over a three-year measurement period. The performance criteria for the PSUs are based on a combination of the performance of our stock price and the Total Shareholder Return ("TSR") for the performance period compared with the TSR of certain peer companies or index for the performance period. PSUs granted vest 100% on the third anniversary of their grant, assuming achievement of the applicable performance criteria. We estimated the fair value of the PSUs using a Monte Carlo simulation model on the date of grant. Compensation expense is recognized ratably over the explicit service period. The Company recognized PSU expenses for the three months ended March 31, 2024 and 2023 of $1.0 million and $0.4 million, respectively.

The following is a summary of PSU activity:

						Weighted
						Average Share				Weighted				Aggregate
		*Number of*				*Price on Date*				*Average Fair*				*Intrinsic*
		*shares*				*of Release*				*Value*				*Value*
		(in thousands, except price data)
Outstanding at January 1, 2024			1,533				—			$	7.82			$	29,610
Granted			—				—				—				—
Released			—				—				—				—
Cancelled/Forfeited			—				—				—				—
Outstanding, March 31, 2024			1,533				—				7.82				21,242
Vested and expected to vest			1,533				—			$	7.82			$	21,242

As of March 31, 2024, there was $5.5 million of unrecognized compensation expense related to these PSUs. This expense is expected to be recognized over 2.0 years.

Restricted Stock Units

The following is a summary of RSU activity:

						Weighted
						Average Share				Weighted				Aggregate
		*Number of*				*Price on Date*				*Average Fair*				*Intrinsic*
		*shares*				*of Release*				*Value*				*Value*
		(in thousands, except price data)
Outstanding at January 1, 2024			2,873				—			$	4.89			$	55,507
Granted			32				—				21.34				672
Released			(373	)			—				6.39				5,840
Cancelled/Forfeited			(4	)			—				9.78				60
Outstanding, March 31, 2024			2,528				—				4.87				35,030
Vested and expected to vest			2,528				—			$	4.87			$	35,030

As of March 31, 2024, there was $10.9 million of unrecognized compensation expense related to these RSUs. This expense is expected to be recognized over 2.4 years.

Share-Based Compensation

Employee share-based compensation expenses recognized for the periods indicated (in thousands):

		Three months ended
		March 31,
		2024				2023
Share-based compensation - by expense type
Cost of goods sold		$	102			$	114
Research and development			280				297
Sales and marketing			285				195
General and administrative			2,172				1,684
Total share-based compensation expense		$	2,839			$	2,290