Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Stockholders Equity Note [Abstract]

Stockholders' Equity

Note 11 — Stockholders’ Equity

Stock-Based Compensation

The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

	Three Months Ended
	March 31, 2023		April 1, 2022
Employee stock options	$	2,977	$	2,327
Restricted stock		67		109
Restricted stock units		1,601		762
Performance stock units		1,106		382
Nonemployee stock options		314		314
Total stock-based compensation expense	$	6,065	$	3,894

The Company recorded stock-based compensation costs in the following categories (in thousands):

	Three Months Ended
	March 31, 2023		April 1, 2022
Cost of sales	$	149	$	70
General and administrative		3,363		1,781
Selling and marketing		857		889
Research and development		1,696		1,154
Total stock-based compensation expense, net		6,065		3,894
Amounts capitalized as part of inventory		369		366
Total stock-based compensation expense, gross	$	6,434	$	4,260

Note 11 — Stockholders’ Equity (Continued)

Incentive Plan

The Amended and Restated Omnibus Equity Incentive Plan (“the Plan”) provides for various forms of stock-based incentives. To date, of the available forms of awards under the Plan, the Company has granted only stock options, restricted stock, unrestricted share grants, restricted stock units (“RSUs”) and performance stock units (“PSUs”). Options under the Plan are granted at fair market value on the date of grant, become exercisable generally over a three-year period, or as determined by the Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Certain option and share awards provide for accelerated vesting if there is a change in control and pre-established financial metrics are met (as defined in the Plan). Grants of restricted stock outstanding under the Plan generally vest over periods of one to three years. Grants of RSUs and PSUs outstanding under the Plan generally vest based on service, performance, or a combination of both. As of March 31, 2023, there were 856,885 shares available for grant under the Plan.

Assumptions

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock. The expected term of options granted is derived from the historical exercises and post-vesting cancellations and represents the period of time that options granted are expected to be outstanding. The Company has calculated a 7% estimated forfeiture rate based on historical forfeiture experience. The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.

	Three Months Ended
	March 31, 2023			April 1, 2022
Expected dividend yield		0	%		0	%
Expected volatility		60	%		54	%
Risk-free interest rate		3.96	%		1.71	%
Expected term (in years)		5.05			5.10

Stock Options

A summary of stock option activity under the Plan for three months ended March 31, 2023 is presented below:

	Stock Options (in 000’s)			Minimum Exercise Price		Maximum Exercise Price
Outstanding at December 30, 2022		2,469
Granted		496
Exercised		(40	)
Forfeited or expired		(24	)
Outstanding at March 31, 2023		2,901		$	5.54	$	154.96
Exercisable at March 31, 2023		1,980

Restricted Stock, Restricted Stock Units and Performance Stock Units

A summary of restricted stock, RSUs and PSUs activity under the Plan for the three months ended March 31, 2023 is presented below (shares in thousands):

	Restricted Stock		RSUs			PSUs
Unvested at December 30, 2022		4		192			118
Granted		—		223			173
Vested		—		(80	)		(30	)
Forfeited or expired		—		(6	)		(11	)
Unvested at March 31, 2023		4		329			250