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STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

3 Months Ended

Apr. 01, 2023

Equity [Abstract]

STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

7. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Registered sale of equity securities

On January 27, 2023, the Company sold 17,000,000 shares of common stock and pre-funded warrants to purchase up to 6,000,000 shares of common stock at a public offering price of $0.99 per pre-funded warrant, for gross proceeds of $22.9 million before deducting underwriting discounts and offering expenses paid by the Company of $1.5 million. The offering price of the pre-funded warrant equals the public offering price per share of the common stock less the $0.01 per share exercise price of each pre-funded warrant.

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 three month period ended April 1, 2023 was as follows:

		Shares				Weighted Average Grant Fair Value
Balance, December 31, 2022			1,965,901			$	2.22
Granted			200,294				1.31
Forfeited			(617,750	)			3.20
Vested			(17,500	)			1.26
Balance, April 1, 2023			1,530,945			$	1.72

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 months ended April 1, 2023 and March 26, 2022 (no tax benefits were recognized):

		Three Months Ended				Three Months Ended
		April 1, 2023				March 26, 2022
Cost of product revenues		$	26,218			$	66,668
Research and development			16,874				147,379
Selling, general and administrative			151,098				442,026
Total		$	194,190			$	656,073

Unrecognized compensation expense for non-vested restricted common stock as of April 1, 2023 totaled $2.6 million and is expected to be recognized over a weighted average period of approximately three years.