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Note P - Share-based Compensation | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] | NOTE P—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 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. 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 (in thousands, except per share data):
|  |  |  |  |  |  |  |  |  | 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) |
Outstanding, January 1, 2024 |  |  | 1 |  |  | $ | 13.84 |  |  |  |  |  |  | $ | 7.12 |  |  |  | 0.08 |  |  | $ | 8 |
Exercised |  |  | — |  |  |  | 13.84 |  |  |  | 20.70 |  |  |  | 7.12 |  |  |  | — |  |  |  | 2 |
Forfeited |  |  | (1 | ) |  |  | 13.84 |  |  |  |  |  |  |  | 7.12 |  |  |  | — |  |  |  | 26 |
Outstanding, December 31, 2024 |  |  | — |  |  |  | — |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |
Exercisable, December 31, 2024 |  |  | — |  |  |  | — |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |
Vested and expected to vest |  |  | — |  |  |  | — |  |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |
As of December 31, 2024, there was no unrecognized stock option expense. For the years 2024, 2023 and 2022, the intrinsic value of options was $2 thousand, $237 thousand and zero. Performance Based Incentive Plan Starting in 2021, certain senior executives were granted performance stock units (“PSUs”) under our 2021 Equity Incentive Plan (“2021 Plan”), which generally vest over a three-year period subject to achievement of certain pre-established performance metrics. The number of shares of common stock that would ultimately be issued to settle PSUs granted ranged from 0% to 200% of the target number of shares granted. We estimate the fair value of the PSUs on the date of grant using a Monte Carlo simulation model, with stock-based compensation expense recognized ratably over the appliable three-year performance period. The Company recognized stock-based compensation expense for the PSUs for the twelve months ended December 31, 2024, 2023 and of $4.0 million, $3.0 million and $1.7 million, respectively. On June 12, 2024, the Compensation Committee certified the Company exceeded the maximum performance target level for each of the performance targets set for the PSUs granted in June 2021 (the “2021 PSUs”). Therefore, applicable employees were entitled to payment of the 2021 PSUs at 200% of the target shares granted under the 2021 Plan. On June 6, 2024, at the annual meeting of stockholders, a proposal to increase the number of shares of common stock for issuance under the 2021 Plan by 2,000,000 shares was not approved, and as a result, the Company did not have enough shares of common stock available for issuance to satisfy the additional shares earned above 100% of target shares of the 2021 PSUs (the “2021 Additional Shares”). In lieu of shares of common stock, the Company settled the 2021 Additional Shares in cash, resulting in an additional $2.8 million of stock-based compensation expense in the twelve months ended December 31, 2024. The following is a summary of PSU activity (in thousands, except per share data):
|  |  |  |  |  | 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 |  |  | 192 |  |  |  |  |  |  |  | 16.40 |  |  |  | 1,958 |
Released |  |  | (277 | ) |  |  |  |  |  |  | 14.27 |  |  |  | 2,890 |
Cancelled/Forfeited |  |  | — |  |  |  |  |  |  |  | — |  |  |  | — |
Outstanding, December 31, 2024 |  |  | 1,448 |  |  |  |  |  |  |  | 81.26 |  |  |  | 53,347 |
Vested and expected to vest |  |  | 1,448 |  |  |  |  |  |  |  | 7.82 |  |  |  | 53,347 |
As of December 31, 2024, there was $5.7 million of unrecognized stock-based expense related to outstanding PSUs. This expense is expected to be recognized over 1.7 years. For the years 2024, 2023 and 2022, the weighted-average grant value for PSUs was $16.40, $8.89 and $0 per share. The intrinsic values of PSUs exercised were $ 2.9 million, $3.6 million and $0 million for the years 2024, 2023 and 2022. The total fair value of shares vested for PSUs during years 2024, 2023 and 2022 are $4.0 million, $0 and $0 million. Restricted Stock Units Restricted stock units are issued to employees through a vesting plan and distribution schedule after employee remains with the Company for a particular length of time. The following is a total summary of RSU activity (in thousands, except per share data):
|  |  |  |  |  | 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 |  |  |  |  |  |  | $ | 11.15 |  |  | $ | 11,156 |
Granted |  |  | 726 |  |  |  |  |  |  |  | 10.73 |  |  |  | 7,792 |
Released |  |  | (1,335 | ) |  | $ | 14.23 |  |  |  | 6.10 |  |  |  | 19,004 |
Cancelled/Forfeited |  |  | (33 | ) |  |  |  |  |  |  | 6.80 |  |  |  | 1,203 |
Outstanding, December 31, 2024 |  |  | 2,231 |  |  |  |  |  |  |  | 6.04 |  |  |  | 82,243 |
Vested and expected to vest |  |  | 2,231 |  |  |  |  |  |  |  | 6.04 |  |  |  | 82,243 |
As of December 31, 2024, there was $11.6 million of unrecognized compensation expense related to these RSUs. This expense is expected to be recognized over 2.42 years. For the years of 2024, 2023 and 2022, the weighted-average grant value for RSU are $10.73, $6.15 and $2.75 per share. The intrinsic values of RSU exercised are $ 19.0 million, $7.8 million and $2.8 million for the years of 2024, 2023 and 2022. The total fair value of shares vested for RSU during years 2024, 2023 and 2022 are $8.1 million, $8.6 million and $8.8 million. Share-Based Compensation The Company recognizes compensation expense on a straight-line basis over the applicable vesting term of the award and expense is adjusted as forfeitures occur. In 2014, the Company ceased issuing stock options and began issuing RSUs and RSAs as share-based compensation to employees. The Company estimates the fair value of RSUs and RSAs at the fair market value on the grant date. Employee share-based compensation expenses recognized for the years ended December 31, were as follows (in thousands): Share-Based compensation - by expense type:
|  | 2024 |  |  | 2023 |  |  | 2022 |
Cost of goods sold |  | $ | 473 |  |  | $ | 524 |  |  | $ | 488 |
Research and development |  |  | 1,455 |  |  |  | 1,492 |  |  |  | 1,332 |
Sales and marketing |  |  | 1,512 |  |  |  | 1,110 |  |  |  | 857 |
General and administrative |  |  | 11,350 |  |  |  | 8,758 |  |  |  | 6,923 |
Total share-based compensation expense |  | $ | 14,790 |  |  | $ | 11,884 |  |  | $ | 9,600 |

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