The Company has stock-based compensation plans under which it grants stock options, restricted stock units ("RSUs"), and performance restricted stock units ("PRSUs") to officers, directors and third parties. Total stock-based compensation for the periods presented are as follows (in thousands):


	Three Months Ended
	March 31,
	2023		2022
Cost of sales	$	6,006	$	256
Research and development		1,317		972
Sales, general and administrative		9,139		8,956
Total	$	16,462	$	10,184

As of March 31, 2023, there was $35.1 million of unrecognized compensation expense for RSUs and PRSUs to be recognized over a weighted average period of 1.38 years.

The Company issued approximately 1,967,000 and 1,225,000 shares of common stock, before net share settlement, upon vesting of RSUs and PRSUs during the three months ended March 31, 2023 and 2022, respectively.

Employees are eligible to participate in the Employee Stock Purchase Plan ("ESPP") approved by its shareholders. During the three months ended March 31, 2023 and 2022, there were no shares issued under the ESPP.

The Company estimates the fair value of shares issued to employees under the ESPP using the Black-Scholes option-pricing model. The assumptions used to estimate the fair value of stock options granted and stock purchase rights under the ESPP are as follows:


	Three Months Ended
	March 31,
	2023			2022
Risk-free interest rate		4.54	%		0.07	%
Expected dividend yield		—			—
Expected term (years)		0.60			0.50
Volatility		62.77	%		50.29	%

The 2018 common stock warrants (the “2018 PIPE Warrants”) have a five-year life and are exercisable by cash or cashless exercise. During the three months ended March 31, 2023 and 2022, there were approximately 5,681,000 and 126,000 2018 PIPE Warrant exercises, respectively, for total cash proceeds of $0.4 million in both periods presented. As of March 31, 2023, approximately 630,000 2018 PIPE Warrants remained outstanding.

The SafeOp common stock warrants (the “SafeOp Warrants”), have a five-year life and are exercisable by cash or cashless exercise. During the three months ended March 31, 2023, there were 159,000 cashless SafeOp Warrant exercises. There were no exercises during the three months ended March 31, 2022. As of March 31, 2023, approximately 778,000 SafeOp Warrants remained outstanding.

In connection with debt financing entered into with Squadron Medical in 2018, and amended in 2019 and 2020, the Company issued common stock warrants to Squadron Medical and a participant lender (the “Squadron Medical Warrants”). The Squadron Medical Warrants expire in May 2027 and are exercisable by cash exercise. No Squadron Medical Warrants have been exercised as of March 31, 2023.

The Company issued warrants to Mr. Patrick S. Miles, the Company’s Chairman and Chief Executive Officer (the “Executive Warrants”). The Executive Warrants had a five-year term and are exercisable by cash or cashless exercise. In October 2022, the term was extended to seven years. No Executive Warrants have been exercised as of March 31, 2023.

A summary of all outstanding warrants for common stock as of March 31, 2023, are as follows (in thousands, except for strike price data):


	Number of Warrants		Strike Price		Expiration
2018 PIPE Warrants		630	$	3.50	May 2023
SafeOp Surgical Merger Warrants		778	$	3.50	May 2023
2018 Squadron Medical Warrants		845	$	3.15	May 2027
2019 Squadron Medical Warrants		4,839	$	2.17	May 2027
2020 Squadron Medical Warrants		1,076	$	4.88	May 2027
Executive Warrants		1,327	$	5.00	December 2024
Other(1)		159	$	7.20	Various through February 2026
Total		9,654

(1)

Weighted-average strike price.

All outstanding warrants were deemed to qualify for equity classification under authoritative accounting guidance.