Stockholders' Equity and Stock-based Compensation Expense

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stockholders' Equity and Stock-based Compensation Expense

Stockholders’ Equity and Stock-based Compensation Expense

The Company’s equity incentive plans are broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests. The 2019 Equity Incentive Plan (the "2019 Plan") provides for the grant of incentive stock options, non-statutory stock options, restricted stock units (“RSUs”), performance stock units ("PSUs"), and other stock or cash awards.

Activity under the Company's equity incentive plans is summarized as follows:

	Shares Available for Grant
Balance, December 31, 2022	1,070,925
Options and RSUs granted	(735,978)
Stock awards canceled / forfeited / expired	279,567
Options canceled / forfeited / expired	84,629
Balance, June 30, 2023	699,143

	Options Outstanding
	Number of Stock Options Outstanding	Weighted- Average Exercise Price		Weighted Average Remaining Term  (in Years)
Balance, December 31, 2022	513,935	$	34.41	6.63
Options granted	309,214	$	18.80
Options exercised	(9,234)	$	15.92
Options canceled / forfeited / expired	(84,629)	$	27.32
Balance, June 30, 2023	729,286	$	28.85	6.95

	Stock Awards Outstanding
	Number of Awards Outstanding	Weighted Average Grant Date Fair Value per Share
Balance, December 31, 2022	906,211	$	40.39
RSUs granted	426,764	$	20.03
Awards released	(262,629)	$	34.72
Stock awards canceled / forfeited / expired	(279,567)	$	43.08
Balance, June 30, 2023	790,779	$	30.32

Stock-based Compensation Expense

Stock-based compensation expense by department recognized during the three and six months ended June 30, 2023 and 2022 was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of revenue	$	361	$	500	$	725	$	959
Sales and marketing	1,283		1,638		2,431		2,214
Research and development	415		1,067		1,108		2,047
General and administrative	(509)		1,528		672		3,556
Total stock-based compensation expense	$	1,550	$	4,733	$	4,936	$	8,776

In the three months ended June 30, 2023, the Company had a significant number of executives and directors leave Cutera and this resulted in a reversal of previously-reported stock compensation expense related to forfeited awards. The total reversal of stock compensation expense in the three months ended June 2023 relating to all forfeited awards was $2.1 million, of which $1.9 million was categorized as general and administrative expense. In the first and second quarters of 2022 and first quarter of 2023, the aggregate stock compensation expense reversal related to forfeited awards was approximately $0.5 million in each quarter.