Stockholders' Equity

9 Months Ended

Oct. 01, 2021

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				Nine Months Ended
	October 1, 2021		October 2, 2020		October 1, 2021		October 2, 2020
Employee stock options	$	2,594	$	2,469	$	7,850	$	7,206
Restricted stock		109		119		507		273
Restricted stock units		700		415		2,048		1,238
Performance stock units		124		54		325		54
Nonemployee stock options		136		69		255		194
Total stock-based compensation expense	$	3,663	$	3,126	$	10,985	$	8,965

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

	Three Months Ended				Nine Months Ended
	October 1, 2021		October 2, 2020		October 1, 2021		October 2, 2020
Cost of sales	$	61	$	30	$	150	$	82
General and administrative		1,671		1,307		4,925		3,601
Selling and marketing		851		807		2,637		2,674
Research and development		1,080		982		3,273		2,608
Total stock-based compensation expense, net		3,663		3,126		10,985		8,965
Amounts capitalized as part of inventory		383		287		1,082		847
Total stock-based compensation expense, gross	$	4,046	$	3,413	$	12,067	$	9,812

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 October 1, 2021, there were 3,002,026 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 6% 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.  

Note 11 — Stockholders’ Equity (Continued)

	Three Months Ended						Nine Months Ended
	October 1, 2021			October 2, 2020			October 1, 2021			October 2, 2020
Expected dividend yield		0	%		0	%		0	%		0	%
Expected volatility		53	%		53	%		53	%		53	%
Risk-free interest rate		0.79	%		0.31	%		0.84	%		0.53	%
Expected term (in years)		5.38			5.72			5.38			5.72

Stock Options

A summary of stock option activity under the Plan for nine months ended October 1, 2021 is presented below:

	Stock Options (in 000’s)			Minimum Exercise Price		Maximum Exercise Price
Outstanding at January 1, 2021		3,418
Granted		268
Exercised		(1,089	)
Forfeited or expired		(27	)
Outstanding at October 1, 2021		2,570		$	5.34	$	154.96
Exercisable at October 1, 2021		1,864

Restricted Stock, Restricted Stock Units and Performance Stock Units

A summary of restricted stock, RSUs and PSUs activity under the Plan for the nine months ended October 1, 2021 is presented below (shares in thousands):

	Restricted Stock			RSUs			PSUs
Unvested at January 1, 2021		11			122			15
Granted		3			63			—
Vested		(11	)		(54	)		(5	)
Forfeited or expired		—			—			—
Unvested at October 1, 2021		3			131			10