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Note 8 - Capital Stock and Stock-based Compensation

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Shareholders' Equity and Share-Based Payments [Text Block]

8.	Capital Stock and Stock-Based Compensation

Stock-Based Payment Awards

Stock-based awards consist of stock options, time-based restricted stock units (“RSUs”), performance-based RSU’s and shares issued under the Company’s employee stock purchase plan. Activity under the Company’s equity incentive plans for the three months ended March 31, 2022, was as follows:

						Weighted
		*Stock*				*Average*				*Time-Based*								*Performance-*
		*Options*				*Exercise*				*RSUs*				*Grant Date*				*Based RSUs*				*Grant Date*
		*Outstanding*				*Price*				*Outstanding*				*Fair Value*				*Outstanding*				*Fair Value*
Balance at December 31, 2021			1,404,816			$	3.10				1,141,164			$	3.57				860,155			$	3.13
Granted			-				-				518,163				5.52				205,122				5.92
Exercised			(10,987	)			2.78				-				-				-				-
Vested (RSUs)			-				-				(151,185	)			2.30				-				-
Cancelled/Forfeited			(3,126	)			3.79				(12,917	)			3.07				-				-
Balance at March 31, 2022			1,390,703			$	3.10				1,495,225			$	4.37				1,065,277			$	3.67

Stock-based compensation expense for the three months ended March 31, 2022 and 2021, was allocated as follows:

		Three Months Ended March 31,
(in thousands)		2022				2021
Cost of revenues		$	36			$	20
Sales and marketing expenses			154				93
General and administrative expenses			791				834
Research and development expenses			42				21
Total stock-based compensation expenses		$	1,023			$	968

As of March 31, 2022, the total compensation costs related to unvested awards not yet recognized is $8.2 million and the weighted average period over which it is expected to be recognized is approximately 2.2 years. The Company did not capitalize any stock-based compensation.

The weighted average estimated fair value of the performance-based RSUs that were granted during the three months ended March 31, 2022 was $5.92 per unit. The following assumptions were used to estimate the fair value of the performance-based RSUs granted during the three months ended March 31, 2022 using a Monte-Carlo valuation simulation:

		2022
Volatility			65.1	%
Risk-free interest rate			1.4	%
Correlation coefficient			38.5	%
Dividend yield			-	%

Earnings (Loss) Per Share

Basic earnings (loss) per share (EPS) is calculated by dividing net income (loss) by the number of weighted average shares of common stock outstanding during the period. The calculation of diluted earnings per share assumes conversion of stock options, time-based RSUs, and performance-based RSUs into common stock using the treasury method. The weighted average number of shares used to compute basic and diluted earnings per share consists of the following:

		Three Months Ended March 31,
(in thousands)		2022				2021
Basic			41,219				39,787
Dilutive effect of equity awards			-				-
Diluted			41,219				39,787

For the three months ended March 31, 2022, and 2021, the Company excluded from the calculations of diluted earnings per share approximately 3.5 million shares and 4.5 million shares, respectively, of weighted average shares of underlying stock-based awards as the impact of including these potential shares would be anti-dilutive.