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Note 10 - Capital Stock and Stock-based Compensation

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

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

10.

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 (“PRSUs”) and shares issued under the Company’s employee stock purchase plan (the “ESPP”). Activity under the Company’s equity incentive plans for the three months ended March 31, 2023 was as follows:

						Weighted
		*Stock*				*Average*
		*Options*				*Exercise*				*RSUs*				*Grant Date*				*PRSUs*				*Grant Date*
		*Outstanding*				*Price*				*Outstanding*				*Fair Value*				*Outstanding*				*Fair Value*
Balance at December 31, 2022			1,238,776			$	3.15				1,093,801			$	3.94				646,235			$	4.51
Granted			-				-				1,177,391				2.51				558,958				2.61
Exercised			(39,618	)			2.63				-				-				-				-
Vested (RSUs)			-				-				(125,036	)			1.93				-				-
Cancelled/Forfeited			(29,201	)			2.99				(3,122	)			5.54				-				-
Balance at March 31, 2023			1,169,957			$	3.17				2,143,034			$	3.27				1,205,193			$	3.63

Stock-based compensation expense related to stock options, RSUs, PRSUs, and the ESPP for the three months ended March 31, 2023 and 2022 was allocated as follows:

		Three Months Ended March 31,
(in thousands)		2023				2022
Cost of revenues		$	69			$	36
Sales and marketing expenses			145				154
General and administrative expenses			869				791
Research and development expenses			70				42
Total stock-based compensation expenses		$	1,153			$	1,023

As of March 31, 2023, the total compensation costs related to unvested awards not yet recognized is $8.4 million and the weighted average period over which it is expected to be recognized is approximately 2.1 years. The Company did not capitalize any stock-based compensation.

The weighted average estimated fair value of PRSUs that were granted during the three months ended March 31, 2023 was $2.61 per unit. The following assumptions were used to estimate the fair value of PRSUs granted during the three months ended March 31, 2023 using a Monte-Carlo valuation simulation:

		2023
Volatility			56.8	%
Risk-free interest rate			4.6	%
Correlation coefficient			41.7	%
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, RSUs, and PRSUs 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 March 31,
(in thousands)		2023				2022
Weighted average shares outstanding - basic			42,119				41,219
Dilutive effect of equity awards			664				-
Weighted average shares outstanding - diluted			42,783				41,219

Shares excluded from diluted loss per share due to their anti-dilutive effect			1,167				3,505