STOCKHOLDERS’ EQUITY

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

STOCKHOLDERS’ EQUITY

(10) STOCKHOLDERS’ EQUITY

In July 2021, the Company’s shareholders voted to increase the number of authorized shares of capital stock to 62,000,000 shares, consisting of 60,000,000 shares of Common Stock and 2,000,000 shares of Preferred Stock (see Note 1).

Preferred Stock

The Company is authorized to issue 2,000,000 shares of preferred stock at $0.01 par value per share. As of December 31, 2021 and 2020, no shares of preferred stock was outstanding.

The Board of Directors may determine the rights, preferences, privileges, qualifications, limitations and restrictions granted or imposed upon any series of preferred stock.

Common Stock

The Company is authorized to issue 60,000,000 shares of common stock at $0.01 par value per share. As of December 31, 2021 and 2020, the Company had 45,885,043 and 35,074,922, respectively, shares of common stock outstanding.

Equity Compensation Plans

In July 2019, the Company terminated the 2009 Stock Option Plan and the 2009 Directors Option Plan (collectively, the “Prior Plans”) and adopted the 2019 Stock Option Plan (the “2019 Stock Options Plan”) and the 2019 Directors Option Plan (the “2019 Directors Option Plan”) (collectively, the “2019 Plans”, and together with the Prior Plans, the “Plans”). The purpose of the 2019 Plans is to provide certain incentive and non-statutory stock options to employees, directors and certain non-employees. As a result, the Company may not grant any additional awards under the Prior Plans. The Prior Plans will continue to govern outstanding stock option previously granted thereunder. The Company has initially reserved 4,000,000 shares and 1,000,000 shares of common stock for issuance of awards under the 2019 Stock Option Plans and the 2019 Directors Option Plan, respectively. In conjunction with the Zoom Connectivity Merger on December 4, 2020, the Company converted 1,432,018 options to Minim option holders in exchange for 1,787,654 stock options.

The 2019 Plans authorize grants to purchase shares of authorized but unissued common stock. Stock options can be granted with an exercise price no less than or equal to the stock’s fair market value at the date of grant. All awards have 10-year terms. The 2019 Plans permits incentive stock options, or ISOs and non-qualified stock options, or NSOs. If the stock options are granted to a 10% stockholder, then the exercise price per share may not be less than 110% of the fair market value per share of the Company’s common stock on the grant date. The board of directors sets the fair value and exercise price for the underlying shares at the grant date.

On November 9, 2021, the Company’s Board of Directors approved of the Omnibus Incentive Compensation Plan and Non-Employee Directors Compensation Plan (collectively, the “2021 Equity Plans”) and terminated the 2019 Plans. The purpose of the 2021 Equity Plans is to provide certain incentive and non-statutory stock options, restricted stock, restricted stock units, and stock appreciation rights to employees, directors, and certain non-employees. As a result, the Company may not grant any additional awards under the 2019 Plans. The Prior Plans and the 2019 Plans will continue to govern outstanding stock options previously granted thereunder. The Company has initially reserved 3,000,000 shares and 1,250,000 shares of common stock for issuance of awards under the Omnibus Incentive Compensation Plan and Non-Employee Directors Compensation Plan, respectively. As of December 31, 2021, the 2021 Equity Plans have not been approved by the Company’s shareholders and will be subject to shareholder approval in the Company’s 2022 annual shareholder meeting. Unless and until shareholder approval has been received, the Company may grant awards under the 2021 Equity Plans but such grants shall not vest or be settled in shares.

Stock Option Activity

Stock option activity under the 2019 Stock Option Plan was as follows:

						Weighted
				Weighted		average
				average		remaining		Aggregate
	Outstanding			exercise		contractual		Intrinsic
	Options			price		term		Value
Outstanding at December 31, 2019		2,474,811		$	1.26		1.90	$	0.27
Granted		575,000			2.15		—		—
Assumed with Zoom Connectivity Merger		1,657,909			0.61		—		—
Exercised		(1,123,357	)		1.04		—		—
Forfeited		(486,200	)		1.21		—		—
Outstanding at December 31, 2020		3,098,163		$	1.16		3.0	$	2.43
Granted		716,258			3.48		—		—
Exercised		(814,005	)		1.45		—		—
Forfeited		(635,842	)		2.28		—		—
Outstanding at December 31, 2021		2,364,574		$	1.47		2.80	$	0.42
Exercisable at December 31, 2021		1,394,306		$	1.11		2.20	$	0.49

The weighted average grant date fair value of options granted was $2.00 and $1.91 per share during the years ended December 31, 2021 and 2020, respectively. The total intrinsic value of options exercised during the years ended December 31, 2021 and 2020 was $1.3 million and $1.0 million, respectively. The intrinsic value is the difference between the estimated fair value of the Company’s common stock at the time of exercise and the exercise price of the stock option.

The total fair value of options that vested during the years ended December 31, 2021 and 2020 was $1.0 million and $1.5 million, respectively. As of December 31, 2021, the total unrecognized stock-based compensation expense related to the stock options was $2.9 million, which will be recognized over a weighted-average period of approximately 2.5 years.

Stock-based Valuation Assumptions

The following ranges of assumptions were used to value options with service-based vesting granted to employees:

	Years ended December 31,
	2021		2020
Expected term (in years)		4.04		3.24 - 6.25
Expected volatility		42.8% - 75.8%		37.0% - 114.4%
Risk-free interest rate		0.3% - 1.2%		0.2% - 1.7%
Dividend yield		0%		0%

Restricted Stock Units

As of December 31, 2021, the Company has granted 1,223,893 RSUs with a total fair value of $1.4 million under the 2021 Equity Plans. As of December 31, 2021, there were no vested RSUs. The Company recorded $73 thousand in stock-based compensation expense for the year ended December 31, 2021. As of December 31, 2021, the total unrecognized stock-based compensation expense was $1.4 million, which will be recognized over a weighted-average period of approximately 3.4 years.

Stock-based Compensation Expense

The following table sets forth stock-based compensation expense included in the Company’s consolidated statements of operations:

	Years ended December 31,
	2021		2020
Cost of goods sold	$	81,983	$	29,997
Sales and marketing		342,337		27,283
General and administrative		184,490		251,246
Research and development		388,128		132,330
Total stock-based compensation expense	$	996,937	$	440,856