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STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

9 Months Ended

Sep. 24, 2022

Equity [Abstract]

STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

7. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Registered sale of equity securities

During the three and nine months ended September 24, 2022, the Company sold 675,000 and 2.3 million shares of common stock for gross proceeds of approximately $858,000 (average of $1.27 per share) and $2,948,000 (average of $1.26 per share), respectively, before deducting broker expenses paid by us of less than $0.1 million, pursuant to the Company’s At-The-Market Equity Offering Sales Agreement, dated as of March 5, 2021 (the “ATM Agreement”) with Stifel, Nicolaus & Company, Incorporated (“Stifel”), as agent, under which the Company may sell up to $50 million of our common stock. The Company has approximately $41.4 million worth of common stock remaining available for sale under the ATM Agreement.

During the three and nine months ended September 25, 2021, the Company sold 600,000 and 3.1 million shares of common stock for gross proceeds of $4.8 million (average of $8.00 per share) and $21.7 million (average of $7.00 per share), respectively, before deducting broker expenses paid by us of $0.1 million and $0.7 million, respectively, pursuant to the Company’s ATM Agreement with Stifel, as agent, under which the Company can sell up to $50 million of its common stock and an At-The-Market Equity Offering Sales Agreement dated as of February 8, 2019 (the “Previous ATM Agreement”) also with Stifel as agent. The Previous ATM Agreement has since terminated pursuant to its terms as a result of the sale of all the shares subject to such agreement.

Non-Vested Restricted Common Stock

The fair value of non-vested restricted common stock awards is generally the market value of the Company’s common stock on the date of grant. The non-vested restricted common stock awards require the employee to fulfill certain obligations, including remaining employed by the Company for one, two or four years (the vesting period) and in certain cases also require meeting either performance criteria or the Company’s stock achieving a certain price. For non-vested restricted common stock awards that solely require the recipient to remain employed with the Company, the stock compensation expense is amortized over the anticipated service period. For non-vested restricted common stock awards that require the achievement of performance criteria, the Company reviews the probability of achieving the performance goals on a periodic basis. If the Company determines that it is probable that the performance criteria will be achieved, the amount of compensation cost derived for the performance goal is amortized over the anticipated service period. If the performance criteria are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed.

Restricted stock activity for the nine months ended September 24, 2022 was as follows:

						Weighted Average
		Shares				Grant Fair Value
Balance, December 25, 2021			2,077,592			$	2.90
Granted			996,500				1.32
Forfeited			(239,950	)			2.56
Vested			(353,843	)			2.19
Balance, September 24, 2022			2,480,299			$	2.40

Stock-Based Compensation

The following table summarizes stock-based compensation expense within each of the categories below as it relates to non-vested restricted common stock awards for the three and nine months ended September 24, 2022 and September 25, 2021 (no tax benefits were recognized):

		2022				2021				2022				2021
		Three Months Ended				Three Months Ended				Nine months Ended				Nine months Ended
		September 24, 2022				September 25, 2021				September 24, 2022				September 25, 2021
Cost of product revenues		$	41,373			$	37,674			$	119,754			$	206,247
Research and development			111,928				180,152				367,654				395,217
Selling, general and administrative			144,247				424,358				883,246				3,165,395
Total		$	297,548			$	642,184			$	1,370,654			$	3,766,859

Unrecognized compensation expense for non-vested restricted common stock as of September 24, 2022 totaled $3.0 million and is expected to be recognized over a weighted average period of approximately 3.0 years.