Stock-based Compensation Expense

6 Months Ended

Jul. 01, 2023

Share-Based Payment Arrangement, Noncash Expense [Abstract]

STOCK-BASED COMPENSATION EXPENSE

The Company recognizes compensation expense relating to share-based payments based on the fair value of the equity instrument issued and records such expense in selling and administrative expenses in the Company's consolidated condensed statements of operations. The Company's stock compensation expense was $171 and $197 for the three months ended July 1, 2023 and June 25, 2022, respectively. The Company's stock compensation expense was $368 and $351 for the six months ended July 1, 2023 and June 25, 2022, respectively.

On May 3, 2023, the Company issued 40,000 shares of restricted stock to the Company's non-employee directors. The grant-date fair value of the awards was $28, or $0.70 per share, and is expected to be recognized as stock compensation expense over a weighted-average period of 1.0 year from the date the awards were granted. Each award is subject to a continued service condition. The fair value of each restricted stock awarded was equal to the market value of a share of the Company's Common Stock on the grant date.

On May 25, 2023, the Company granted 444,000 options with a market condition to certain key employees of the Company at a weighted-average exercise price of $1.00. The grant-date fair value of these options was $186. These options vest over a two-year period and require the Company's stock to trade at or above $3.00 for five consecutive trading days during the term of the option to meet the market condition.

The fair value of each option was estimated on the date of grant using a lattice model. Expected volatility was based on historical volatility of the Company's stock, using the most recent period equal to the expected life of the options. The risk-free interest rate was based on the U.S. Treasury yield for a term equal to the expected life of the option at the time of grant. The Company uses historical exercise behavior data of similar employee groups to determine the expected life of the options.

The following weighted-average assumptions were used to estimate the fair value of stock options granted during three months ended July, 1 2023:


Risk-free interest rate	3.80	%
Expected volatility	97.96	%
Expected dividends	—	%
Expected life of options	5 years