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Note 8 - Capital Stock and Stock-based Compensation

9 Months Ended

Sep. 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 nine months ended September 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			-				-				807,345				4.91				283,641				5.38
Exercised			(40,267	)			2.64				-				-				-				-
Vested (RSUs)			-				-				(232,157	)			3.77				(396,279	)			2.09
Cancelled/Forfeited			(76,658	)			2.81				(145,580	)			4.64				(20,284	)			3.93
Balance at September 30, 2022			1,287,891			$	3.13				1,570,772			$	4.13				727,233			$	4.55

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

		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands)		2022				2021				2022				2021
Cost of revenues		$	-			$	32			$	88			$	83
Sales and marketing expenses			147				149				493				373
General and administrative expenses			919				790				2,633				2,593
Research and development expenses			73				33				187				87
Total stock-based compensation expenses		$	1,139			$	1,004			$	3,401			$	3,136

As of September 30, 2022, the total compensation costs related to unvested awards not yet recognized is $6.6 million and the weighted average period over which it is expected to be recognized is approximately 1.7 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 nine months ended September 30, 2022 was $5.38 per unit. The following assumptions were used to estimate the fair value of the performance-based RSUs granted during the nine months ended September 30, 2022 using a Monte-Carlo valuation simulation:

		2022
Volatility			63.7	%
Risk-free interest rate			1.8	%
Correlation coefficient1			41.1	%
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 September 30,								Nine Months Ended September 30,
(in thousands)		2022				2021				2022				2021
Net loss available to common stockholders		$	(3,405	)		$	(170	)		$	(7,850	)		$	(1,249	)
Weighted average shares outstanding - basic			41,637				40,754				41,353				40,202
Dilutive effect of equity awards			-				-				-				-
Weighted average shares outstanding - diluted			41,637				40,754				41,353				40,202
Basic and diluted loss per share		$	(0.08	)		$	(0.00	)		$	(0.19	)		$	(0.03	)
Shares excluded from diluted loss per share due to their anti-dilutive effect			3,594				3,908				3,676				4,438