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Note 9 - Capital Stock and Stock-based Compensation

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

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

9.	Capital Stock and Stock-Based Compensation

Stock-Based Payment Awards

Stock-based awards consist of stock options, time-based restricted stock units, market condition restricted stock units, 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, 2023 is as follows:

						Weighted												Market
						*Average*												*Condition*
		*Stock*				*Exercise*				*Restricted*				*Grant Date*				*Restricted*				*Grant Date*
		*Options*				*Price*				*Stock Units*				*Fair Value*				*Stock Units*				*Fair Value*
Outstanding at December 31, 2022			1,238,776			$	3.15				1,093,801			$	3.94				646,235			$	4.51
Granted			-				-				1,296,379				2.81				558,958				2.61
Exercised			(213,644	)			2.38				-				-				-				-
Vested (RSUs)			-				-				(295,531	)			2.97				(115,976	)			2.98
Cancelled/Forfeited			(99,483	)			2.45				(54,396	)			4.31				(87,138	)			4.64
Outstanding at June 30, 2023			925,649			$	3.37				2,040,253			$	3.35				1,002,079			$	3.62

Stock-based compensation expense for the three and six months ended June 30, 2023 and 2022 is allocated as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)		2023				2022				2023				2022
Cost of revenues		$	95			$	52			$	164			$	88
Sales and marketing expenses			195				192				340				346
General and administrative expenses			704				923				1,573				1,714
Research and development expenses			108				72				178				114
Total stock-based compensation expenses		$	1,102			$	1,239			$	2,255			$	2,262

As of June 30, 2023, 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 market condition restricted stock awards that were granted during the six months ended June 30, 2023 was $2.61 per unit. The estimate of the fair value was determined using a Monte-Carlo valuation simulation, which included the following assumptions:


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 and restricted stock units into common stock using the treasury method. The weighted average number of shares used to compute basic and diluted EPS consisted of the following:

		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands, except per share data)		2023				2022				2023				2022
Net (loss) income available to common stockholders		$	(980	)		$	2,435			$	(358	)		$	(4,445	)
Weighted average shares outstanding - basic			42,354				41,304				42,204				41,256
Dilutive effect of equity awards			-				1,256				-				-
Weighted average shares outstanding - diluted			42,354				42,560				42,204				41,256
Basic (loss) earnings per share		$	(0.02	)		$	0.06			$	(0.01	)		$	(0.11	)
Diluted (loss) earnings per share		$	(0.02	)		$	0.06			$	(0.01	)		$	(0.11	)
Shares excluded from diluted (loss) income per share due to their anti-dilutive effect			4,286				910				3,795				3,717