Stock-based Compensation and Stockholders' Equity

9 Months Ended

Feb. 27, 2022

Share-based Payment Arrangement [Abstract]

Stock-based Compensation and Stockholders' Equity

Stock-Based Compensation Activity

The estimated fair value for stock options, which determines the Company’s calculation of stock-based compensation expense, is based on the Black-Scholes option pricing model. Restricted stock units (“RSUs”) are valued at the closing market price of the Company’s common stock on the grant date. The Company uses the straight-line method to recognize the fair value of stock-based compensation arrangements.

During the three months ended February 27, 2022, the Company granted 75,000 options to purchase shares of common stock and awarded 18,000 RSUs. During the nine months ended February 27, 2022, the Company granted 778,000 options to purchase shares of common stock and awarded 101,000 RSUs.

As of February 27, 2022, the Company has reserved 3.8 million shares of common stock for future issuance under its current and former equity plans.

Stock-Based Compensation Expense

The Company’s stock-based awards include stock option grants and RSUs. The Company records compensation expense for stock-based awards issued to employees and directors in exchange for services provided based on the estimated fair value of the awards on their grant dates and is recognized over the required service periods, generally the vesting period.

The following table summarizes stock-based compensation by income statement line item:


	Three Months Ended				Nine Months Ended
(In thousands)	February 27, 2022		February 28, 2021		February 27, 2022		February 28, 2021
Continuing operations:
Cost of product sales	$	83	$	141	177		$	262
Research and development	51		49		151		175
Selling, general and administrative	488		641		1,575		2,120
Discontinued Operations:
Cost of product sales	—		(34)		25		27
Total stock-based compensation	$	622	$	797	$	1,928	$	2,584

As of February 27, 2022, there was $3.3 million of total unrecognized compensation expense related to unvested equity compensation awards granted under the Landec incentive stock plans. Total expense is expected to be recognized over the weighted-average period of 2.06 years for stock options and 1.39 years for RSUs.

Stock Repurchase Plan

On July 14, 2010, the Board of Directors of the Company approved the establishment of a stock repurchase plan which allows for the repurchase of up to $10.0 million of the Company’s common stock. The Company may still repurchase up to $3.8 million of the Company’s common stock under the Company’s stock repurchase plan. The Company may repurchase its common stock from time to time in open market purchases or in privately negotiated transactions. The timing and actual number of shares repurchased is at the discretion of management of the Company and will depend on a variety of factors, including stock price, corporate and regulatory requirements, market conditions, the relative attractiveness of other capital deployment opportunities and other corporate priorities. The stock repurchase program does not obligate Landec to acquire any amount of its common stock and the program may be modified, suspended or terminated at any time at the Company's discretion without prior notice. During the nine months ended February 27, 2022, the Company did not purchase any shares on the open market.