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Note 8 - Capital Stock and Stock-based Compensation

6 Months Ended

Jun. 30, 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 RSUs and shares issued under the Company’s employee stock purchase plan. Activity under the Company’s equity incentive plans for the six months ended June 30, 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			-				-				690,051				5.11				205,122				5.92
Exercised			(15,597	)			2.72				-				-				-				-
Vested (RSUs)			-				-				(232,157	)			3.77				(163,223	)			2.98
Cancelled/Forfeited			(29,928	)			2.93				(54,631	)			4.47				(7,823	)			3.18
Balance at June 30, 2022			1,359,291			$	3.11				1,544,427			$	4.19				894,231			$	3.80

Stock-based compensation expense for the three and six months ended June 30, 2022 and 2021 was allocated as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)		2022				2021				2022				2021
Cost of revenues		$	52			$	31			$	88			$	51
Sales and marketing expenses			192				131				346				224
General and administrative expenses			923				969				1,714				1,803
Research and development expenses			72				33				114				54
Total stock-based compensation expenses		$	1,239			$	1,164			$	2,262			$	2,132

As of June 30, 2022, the total compensation costs related to unvested awards not yet recognized is $7.4 million and the weighted average period over which it is expected to be recognized is approximately 1.9 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 six months ended June 30, 2022 was $5.92 per unit. The following assumptions were used to estimate the fair value of the performance-based RSUs granted during the six months ended June 30, 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 EPS consists of the following:

		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)		2022				2021				2022				2021
Basic			41,304				40,152				41,256				39,960
Dilutive effect of equity awards			1,256				-				-				-
Diluted			42,560				40,152				41,256				39,960

The Company excludes from the calculation of diluted EPS the weighted average shares of underlying stock-based awards if the impact of including these potential shares would be anti-dilutive. The Company has excluded the impact of approximately 0.9 million shares and 4.8 million shares for the three months ended June 30, 2022 and 2021, and 3.7 million shares and 4.7 million shares for the six months ended June 30, 2022 and 2021, respectively.