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Note 14 - Stock-based Compensation | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Shareholders' Equity and Share-Based Payments [Text Block] |
14. | Stock-Based Compensation
Stock-based compensation expense for the years ended December 31, 2024 and 2023, was allocated as follows:
|  | Year Ended December 31, |
(in thousands) |  | 2024 |  |  | 2023 |
Cost of revenues |  | $ | 122 |  |  | $ | 308 |
Sales and marketing expenses |  |  | 599 |  |  |  | 746 |
General and administrative expenses |  |  | 3,165 |  |  |  | 3,560 |
Research and development expenses |  |  | 454 |  |  |  | 386 |
Total stock-based compensation |  | $ | 4,340 |  |  | $ | 5,000 |
As of December 31, 2024, the total compensation costs related to unvested awards not yet recognized is $4.1 million and the weighted average period over which it is expected to be recognized is approximately 1.6 years. During the years ended December 31, 2024 and 2023, the Company did not capitalize any stock-based compensation. Equity Incentive Plans During 2021, the Company’s board of directors and stockholders adopted the 2021 Incentive Plan which authorized additional shares available for grants to officers, employees, non-employee directors and other key persons of the Company and its subsidiaries. As of December 31, 2024, there were approximately 2.4 million shares available for issuance under the 2021 Incentive Plan. Restricted Stock Units with a Market Condition The Company granted deferred awards of market condition restricted stock units (the “Market Condition RSUs”) to certain members of the Company’s management team. The vesting of the Market Condition RSUs is linked to the achievement of a relative total shareholder return (“TSR”) of the Company’s common stock measured from the earlier of (i) the measurement period as set out in the award agreement or (ii) upon a change of control (measured relative to the Nasdaq Biotechnology or Russell 2000 index and based on a 20-day trading average price) and is subject to a one-year holding period after vesting. For Market Condition RSUs with a measurement period that concluded during the years ended December 31, 2024 and 2023, the TSR of the Company’s common stock relative to the applicable index resulted in achieving a weighted average vesting of 21% and 100% of the target, respectively. Market Condition RSUs outstanding as of December 31, 2024 remain subject to a TSR measurement which can result in vesting rates ranging from 0% to 150% of the target number. The weighted average assumptions used in the valuation of the Market Condition RSUs granted during the year ended December 31, 2023, are as follows:
Volatility |  |  | 56.8 | %
Risk-free interest rate |  |  | 4.6 | %
Correlation coefficient |  |  | 41.7 | %
Dividend yield |  |  | - | %
Liquidity discount |  |  | 14.1 | %
The Company used historical volatility to calculate the expected volatility matching the expected holding period. The risk-free interest rate assumption is based upon observed U.S. Treasury bill interest rates (risk-free) corresponding with the requisite service period. Additionally, the Company assumes a liquidity discount to adjust the fair value for the one-year holding period post-vest restrictions. Restricted Stock Units with a Performance Condition Performance-based RSU awards are contingent on the achievement of certain performance metrics. Compensation cost associated with performance-based RSUs are recognized based on the estimated number of shares that the Company ultimately expects will be earned. If the estimated number of shares to be earned is revised in the future, then stock-based compensation expense will be adjusted accordingly. Stock-Based Payment Awards Restricted stock unit (“RSU”) activity for the years ended December 31, 2024 and 2023, was as follows:
|  |  |  |  |  |  |  |  |  | Market- |  |  |  |  |  |  | Performance- |  |  |  |  |
|  | Time-Based |  |  |  |  |  |  | Based |  |  |  |  |  |  | Based |  |  |  |  |
|  | Restricted |  |  | Grant Date |  |  | Restricted |  |  | Grant Date |  |  | Restricted |  |  | Grant Date |
|  | Stock Units |  |  | Fair Value |  |  | Stock Units |  |  | Fair Value |  |  | Stock Units |  |  | Fair Value |
Balance at December 31, 2022 |  |  | 1,093,801 |  |  | $ | 3.94 |  |  |  | 646,235 |  |  | $ | 4.51 |  |  |  | - |  |  | $ | - |
Granted |  |  | 1,350,125 |  |  |  | 2.87 |  |  |  | 558,958 |  |  |  | 2.61 |  |  |  | - |  |  |  | - |
Vested |  |  | (1,144,065 | ) |  |  | 3.38 |  |  |  | (316,210 | ) |  |  | 4.01 |  |  |  | - |  |  |  | - |
Cancelled/Forfeited |  |  | (134,865 | ) |  |  | 3.71 |  |  |  | (87,138 | ) |  |  | 4.64 |  |  |  | - |  |  |  | - |
Balance at December 31, 2023 |  |  | 1,164,996 |  |  | $ | 3.28 |  |  |  | 801,845 |  |  | $ | 3.37 |  |  |  | - |  |  | $ | - |
Granted |  |  | 1,078,213 |  |  |  | 3.85 |  |  |  | - |  |  |  | - |  |  |  | 375,895 |  |  |  | 4.19 |
Vested |  |  | (717,119 | ) |  |  | 3.62 |  |  |  | (51,732 | ) |  |  | 3.30 |  |  |  | - |  |  |  | - |
Forfeited |  |  | (147,095 | ) |  |  | 3.60 |  |  |  | (191,155 | ) |  |  | 5.60 |  |  |  | - |  |  |  | - |
Balance at December 31, 2024 |  |  | 1,378,995 |  |  | $ | 3.51 |  |  |  | 558,958 |  |  | $ | 2.61 |  |  |  | 375,895 |  |  | $ | 4.19 |
The aggregate fair value of RSUs that vested during the years ended December 31, 2024, and 2023 was $1.8 million and $7.5 million, respectively. Unvested shares related to market-based and performance-based vesting conditions are reflected at 100% of their target vesting amount in the table above. Actual vesting could range from zero to 150% of their target amounts. Stock option activity for the years ended December 31, 2024 and 2023, was as follows:
|  | Number of Options |  |  | Weighted-Average Exercise Price |  |  | Weighted-Average Remaining Contractual Term |  |  | Aggregate Intrinsic Value (in thousands) |
Outstanding at December 31, 2022 |  |  | 1,238,776 |  |  | $ | 3.15 |  |  |  |  |  |  |  |  |
Exercised |  |  | (213,644 | ) |  |  | 2.38 |  |  |  |  |  |  |  |  |
Cancelled/Forfeited |  |  | (101,065 | ) |  |  | 2.71 |  |  |  |  |  |  |  |  |
Outstanding and exercisable at December 31, 2023 |  |  | 924,067 |  |  | $ | 3.37 |  |  |  |  |  |  |  |  |
Exercised |  |  | (13,586 | ) |  |  | 3.18 |  |  |  |  |  |  |  |  |
Cancelled/Forfeited |  |  | (83,023 | ) |  |  | 4.70 |  |  |  |  |  |  |  |  |
Outstanding and exercisable at December 31, 2024 |  |  | 827,458 |  |  | $ | 3.24 |  |  |  | 2.7 |  |  | $ | - |
There is no aggregate intrinsic value at December 31, 2024 because the Company’s closing stock price of $2.11 is below the exercise price of the outstanding options. The aggregate intrinsic value of options exercised was nil and $0.6 million for the years ended December 31, 2024 and 2023, respectively. Employee Stock Purchase Plan (“ESPP”) The Company has an employee stock purchase plan under which eligible employees may purchase a limited number of shares of common stock at a discount of up to 15% of the market value of such stock at pre-determined and plan-defined dates. There were 0.1 million and 0.2 million shares issued under the ESPP during the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, there were 0.1 million shares available for issuance under the ESPP.

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