Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Capital Stock

v3.8.0.1
Note 6 - Capital Stock
 9 Months Ended
Oct. 01, 2017
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
6
.
Capital stock
 
Common shares
 
Issued and outstanding:
 
The issued and outstanding number of common shares included in shareholders
’ equity consisted of the following:
 
   
Number

of shares
    
$
 
                 
Balance at January
1, 2017
   
16,510,180
      
391
  
Share issuance
    
315,017
      
3
  
Balance at
October 1, 2017
    
16,825,197
      
394
  
 
 
Stock Options
 
For more detailed information regarding the Company
’s stock option arrangements, see Note
6
of the consolidated financial statements within the Company’s Form
10
-K for the fiscal period ended
January 1, 2017.
The Company granted
1,343,716
stock options during the
nine
month period ended
October 1, 2017.
A summary of stock option activity for the
nine
month period ended
October 1, 2017
is as follows:
 
   
Number

of options
    
Weighted
average
exercise
price
    
Aggregate
intrinsic
value
    
Weighted
average
remaining
contractual
term
(years)
  
Outstanding at January
1, 2017
    
616,766
     $
1.82
      
8
      
5.6
  
                                 
Options granted
    
1,343,716
     $
1.24
      
 
      
 
  
Expired
    
(111,282
)
    
1.84
      
 
      
 
  
Forfeited
    
(40,721
)
    
1.80
      
 
      
 
  
Outstanding at
October 1, 2017
    
1,808,479
     $
1.39
     $
97
      
8.7
  
Exercisable at
October 1, 2017
    
333,798
     $
1.92
     $
—
      
4.2
  
 
During the
nine
month period ended
October 1, 2017,
1,343,716
stock options were granted to the executive officers of the Company. The stock options have an exercise price per share equal to the Company per share closing price on the grant date, and will vest at
20%
of the covered shares upon the Company
’s average closing share price being above each of
$2.00,
$3.00,
$4.00,
$5.00
and
$6.00
for a
90
day period. If the share price does
not
meet the average closing share prices specified, the stock options will
not
vest. In the event of a Change in Control Event (as defined in the respective employment agreement), the options shall immediately expire to the extent they remain unvested; provided, however, the Company’s board of directors
may,
in its sole discretion, accelerate vesting effective immediately prior to, but contingent on, a Change in Control Event. To ensure alignment with shareholders, the options
may
not
be exercised, and
no
option shares
may
be sold, within
180
days of any portion of the options vesting, unless a Change in Control Event occurs. The options shall otherwise reflect the Company’s standard terms and conditions for employee option grants, including a
ten
-year term, and will vest with respect to whole shares only.
 
A binomial model was utilized to determine the fair value of the stock options issued during the
nine
months ended
October 1, 2017.
The following weighted average assumptions were used in calculating the estimated fair value of the stock options issued during the quarter with performance conditions used to compute stock-based compensation expense:
 
   
Nine
months
ended
October 1
,
2017
  
Binomial Model weighted-average assumptions
  
 
 
 
         
Expected dividend yield
    
0.0
%
Expected volatility
    
42.7
%
Expected forfeiture
    
30.0
%
Risk-free interest rate
    
1.02
%
Expected option life in years
    
5.0
  
         
Weighted-average stock option fair value per option granted
   $
0.29
  
 
 
Stock-based compensation recognized during the
three
month period ended
October 1, 2017
and
October 2, 2016
related to the stock options was
$22
and
$20,
respectively. During the
nine
month period ended
October 1, 2017
and
October 2, 2016,
the Company recorded stock-based compensation expense and a corresponding increase in additional paid-in capital of
$45
and
$62,
respectively.
 
 
Restricted Stock Units
 
 
For more detailed information regarding the Company
’s restricted stock units (“RSU”) arrangements, see Note
6
of the consolidated financial statements within the Company’s Form
10
-K for the fiscal period ended
January 1, 2017.
Each RSU entitles the holder to
one
share of the Company’s common stock. The Company issued
111,200
RSU’s during the
nine
months ended
October 1, 2017.
A summary of the RSU activity for the
nine
month period ended
October 1, 2017
is as follows:
   
Outstanding
RSU
    
Weighted
average
stock
price
    
Weighted
average
remaining
contractual
term (years)
  
Outstanding balance at January
1, 2017
    
1,090,126
     $
1.22
      
1.01
  
RSU
’s granted
    
111,200
     $
1.39
      
 
  
RSU
’s vested and issued in shares
    
(315,017
)
    
1.80
      
 
  
RSU
’s forfeited
    
(261,606
)
    
0.89
      
 
  
Outstanding balance at
October 1, 2017
    
624,703
     $
1.06
      
0.91
  
 
 
Certain RSUs
outstanding have a market condition such that the awards are vested and issuable only if the market price of the Company’s stock meets or exceeds a specified target during the vesting period. If the market condition is
not
met, the RSUs will
not
vest and will be forfeited.
 
Stock based compensation recognized during the
three
month period ended
October 1, 2017
and
October 2, 2016
related to the restricted stock units was
$55
and
$99,
respectively. Stock based compensation recognized during the
nine
month period ended
October 1, 2017
and
October 2, 2016
related to the restricted stock units was
$228
and
$281,
respectively.