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Stock Based Compensation

12 Months Ended

Dec. 31, 2024

Stock Based Compensation

Stock-Based Compensation

14. Stock-Based Compensation

We have various incentive stock-based compensation plans that provide for the grant of stock options, restricted stock units (RSUs), and other share-based awards of up to 8,734 shares to eligible employees, consultants, and directors. As of December 31, 2024, we had 1,612 shares remaining in the plans available to grant.

Stock Options

The weighted-average fair value of stock options on the date of grant and the assumptions used to estimate the fair value of stock options granted during the years ended December 31, 2024 and 2023 using the Black-Scholes option-pricing model were as follows:

		Year Ended December 31,
		2024				2023
Weighted-average fair value of options granted		$	3.64			$	1.38
Expected volatility			75	%			88	%
Expected life (in years)			5.69				5.74
Risk-free interest rate			4.13	%			3.76	%
Expected dividend yield			0.00	%			0.00	%

The expected volatility of the options is determined using historical volatilities based on historical stock prices. The expected life of the options granted is based on our historical share option exercise experience. The risk-free interest rate is determined using the yield available for zero-coupon U.S. government issues with a remaining term equal to the expected life of the option. During 2023, the Company declared and paid one quarterly dividends of $0.005, however, the expected annual dividend yield was less than half of one percent during 2023. In March 2023, our Board of Directors cancelled the quarterly dividend.

The following table summarizes the stock option activity under the plans for the years ended December 31, 2024 and 2023 (in thousands, except share data):

						Weighted-				Weighted- Average		Aggregate
		Number of				Average				Remaining		Intrinsic Value
		Shares				Exercise Price				Contract Life		(in thousands)
Outstanding at January 1, 2023			7,652,964				2.73			5.3 years			3,362
Granted			965,500				1.88
Exercised			(183,521	)			1.32
Cancelled/forfeited			(439,144	)			3.04
Outstanding at December 31, 2023			7,995,799				2.64			4.9 years			19,469
Granted			328,500				5.42
Exercised			(1,460,404	)			1.74
Cancelled/forfeited			(201,096	)			4.01
Outstanding at December 31, 2024			6,662,799				2.93			4.4 years			16,584
Shares vested and expected to vest			6,558,048				2.93			4.3 years			16,369
Exercisable as of December 31, 2024			5,866,379				2.89			3.8 years			14,950
Exercisable as of December 31, 2023			6,417,000				2.57			3.9 years			16,278

The total intrinsic value of options exercised during the years ended December 31, 2024 and 2023, was $5,098 and $154, respectively.

As of December 31, 2024, the total future compensation expense related to non-vested options not yet recognized in the consolidated statements of operations was approximately $1,712 and the weighted-average period over which these awards are expected to be recognized is approximately 1.5 years.

Restricted Stock Units:

The following table summarizes the RSUs outstanding with service vesting in future years (in thousands):

Years Ended December 31,

2025

2026

2027

RSUs with service-based vesting conditions

135

135

36

The following table summarizes the RSUs activity under the plans for the years ended December 31, 2024 and 2023 (in thousands, except unit data):

		Number of				Weighted-Average
		Units				Fair Value
Outstanding at January 1, 2023			155,985			$	3.62
Granted			255,000				1.87
Vested/released			(397,651	)			2.57
Cancelled/forfeited			-				-
Outstanding at December 31, 2023			13,334				1.73
Granted			440,000				5.24
Vested/released			(109,166	)			5.05
Cancelled/forfeited			(38,334	)			4.73
Outstanding at December 31, 2024			305,834				5.21

The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2024 and 2023 was $5.24 and $1.87, respectively.

The total intrinsic value of RSUs that vested and were released during the years ended December 31, 2024 and 2023 was $480 and $793 respectively.

As of December 31, 2024, the total future compensation expense related to non-vested RSUs not yet recognized in the consolidated statements of operations was approximately $1,542 and the weighted-average period over which these awards are expected to be recognized is approximately 1.1 year.

The following table summarizes the statement of operations effect of stock-based compensation for the years ended December 31, 2024 and 2023 (in thousands):

		Year Ended December 31,
		2024				2023
Share-based compensation expense by type:
Stock options		$	2,399			$	3,221
Restricted stock units			603				628
Total cost related to share-based compensation expense		$	3,002			$	3,849
Share-based compensation expense by financial statement line item:
Cost of revenue		$	476			$	582
Research and development			611				610
Selling and marketing			548				658
General and administrative			1,367				1,999
Total cost related to share-based compensation expense		$	3,002			$	3,849

The tax benefit related to stock compensation expense on net deferred tax assets at December 31, 2024 and 2023 was $812 and $747, respectively.