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STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

3 Months Ended

Mar. 30, 2024

Equity [Abstract]

STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

8. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Registered sale of equity securities

During the three months ended March 30, 2024, the Company sold 3,080,000 shares of common stock for gross proceeds of $7,466,755 (average of $2.42 per share) before deducting broker expenses paid by the Company of approximately $0.2 million, pursuant to the Company’s then effective At-The-Market Equity Offering Sales Agreement, dated as of March 5, 2021 (the “ATM Agreement”) with Stifel, Nicolaus & Company, Incorporated (“Stifel”), as agent. The ATM Agreement terminated in the three months ended March 30, 2024.

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.

The Company granted 1,164,817 and 200,294 restricted stock units to its employees, executives and the Board of Directors in the three months ended March 30, 2024 and April 1, 2023, respectively. The 1,164,817 shares will vest upon the successful achievement of certain fiscal year 2024 milestones. The fair value of the restricted stock units was based on the fair market value of the Company’s stock on the date of grant. The time-based shares are expensed over the service period and the milestone-based shares are expensed based upon the probability of achievement.

Restricted stock activity for the three month period ended March 30, 2024 was as follows:

		Shares				Weighted Average Grant Fair Value
Balance, December 30, 2023			1,931,767			$	1.65
Granted			1,164,817				2.68
Forfeited			—				—
Vested			(20,064	)			1.91
Balance, March 30, 2024			3,076,520			$	2.04

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 March 30, 2024 and April 1, 2023 (no tax benefits were recognized):

		Three Months Ended				Three Months Ended
		March 30, 2024				April 1, 2023
Cost of product revenues		$	220,605			$	26,218
Research and development			143,823				16,874
Selling, general and administrative			370,500				151,098
Total		$	734,928			$	194,190
Stock based compensation expense		$	734,928			$	194,190

Unrecognized compensation expense for non-vested restricted common stock as of March 30, 2024 totaled $6.3 million and is expected to be recognized over a weighted average period of approximately two years.