The Company provides certain employees, non-employee directors and consultants with performance incentives under the Aquestive Therapeutics, Inc. Equity Incentive Plan (the Plan), adopted by the Board of Directors on June 15, 2018. Under this Plan, the Company may grant restricted stock units, stock options, or other stock-based awards in order to align the long-term financial interests of selected participants with those of its stockholders, strengthen the commitment of such persons to the Company, and attract and retain competent and dedicated persons whose efforts will enhance long-term growth, profitability and share value.

Restricted stock units and stock options that have been awarded are subject to graded vesting over a service period, which is typically three years. Compensation cost is recognized for these awards on a pro-rata basis over the requisite service period for each award granted.


Expense classification:	Year Ended December 31, 2022		Year Ended December 31, 2021
Manufacture and supply	$	203	$	313
Research and development	672		881
Selling, general and administrative	3,506		5,625
Total share-based compensation expenses	$	4,381	$	6,819
Share-based compensation from:
Restricted Stock Units	127		81
Stock Options	4,244		6,714
Employee Stock Purchase Plan	10		24
Total share-based compensation expenses	$	4,381	$	6,819


	Number of Units	Weighted Average Grant Date Fair Value Per Share
	(In thousands)
Unvested, December 31, 2020	14	$	11.38
Granted	—	—
Forfeited	(2)	13.00
Vested	(12)	11.14
Unvested, December 31, 2021	—
Granted	192	2.37
Forfeited	(20)	2.21
Vested	(10)	2.55
Unvested, December 31, 2022	162	$	2.38

The Company granted 192 thousand restricted stock units during 2022. The Company did not grant restricted stock units during 2021. During 2022, the total grant date fair market value of shares vested was $26.

As of December 31, 2022, $261 of total unrecognized compensation expenses related to restricted stock units awards is expected to be recognized over a weighted average period of 2.21 years from the date of grant. The restricted stock units previously granted to employees were subject to a three-year graduated vesting schedule and were not subject to performance-based criteria other than continued employment.


(in 000s, except share price data)	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
Outstanding at December 31, 2020	3,259	$	8.14	8.42	$	2,978
Granted	1,212	$	4.73
Forfeited and Expired	(264)	$	7.52
Exercised	(61)
Outstanding at December 31, 2021	4,146	$	7.28	7.88	$	1,423
Granted	2,015	1.83
Forfeited and Expired	(133)	$	7.81
Exercised	—	$	—
Outstanding at December 31, 2022	6,028	$	5.48	7.50	$	38
Vested and expected to vest at December 31, 2022	5,877	$	5.57	7.46	$	36
Exercisable at December 31, 2022	3,652	$	7.42	6.57	$	—

The weighted average grant date fair value of stock options granted during 2022 and 2021 was $1.46 and $3.61, respectively. During the year ended December 31, 2022, stock options were granted with an exercise price ranging from $0.71 to $2.55 and accordingly, given the Company’s share price of $0.90 at December 30, 2022, the intrinsic value provided by certain shares granted during this period was de minimus.


	Year Ended December 31,
	2022			2021
Expected dividend yield	0%			0%
Expected volatility	100%			100%
Expected term (years)	5.50	-	6.13	5.50	-	6.00
Risk-free interest rate	2.0%	—%	4.3%	0.5%	—%	1.5%
Exercise prices	$0.71	-	$2.55	$3.76	-	$5.30

We anticipate reinvesting earnings for the foreseeable future in product development and other avenues of share-value growth and therefore used a dividend yield of zero. The estimate of volatility was determined based on the historical trading data of comparable public companies at the time of grant given the lack of sufficient history for our own publicly-traded Common Stock. The expected term of the award was calculated using the simplified method and weighted average was utilized taking into account the vesting periods and contractual life. The risk-free interest rates are derived from the U.S. Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected term of the options.

As of December 31, 2022, $3,433 of total unrecognized compensation expenses related to non-vested stock options is expected to be recognized over a weighted average period of 1.84 years from the date of grant. These option grants provided a maximum contract term of 10 years from grant date, with a weighted average remaining contract life of 7.50 years. Options granted to senior management and key employees are subject to a three-year graded vesting schedule while options granted to the board of directors are subject to a one year cliff vesting schedule. These stock options are not subject to performance-based criteria other than continued employment.

In accordance with Nasdaq Listing Rule 5635(c)(4), the Company adopted the Aquestive Therapeutics, Inc. 2022 Equity Inducement Plan approved by the Compensation Committee of the Board of Directors of the Company effective as of July 29, 2022. In September 2022, the Company granted a nonqualified option to purchase 100,000 shares of Common Stock to an officer of the Company.

The Company's Employee Stock Purchase Plan (the "ESPP"), as amended and restated effective as of January 1, 2019, features two six-month offering periods per year, running from January 1 to June 30 and July 1 to December 31. Under the ESPP, employees of the Company may elect to purchase the Company's Common Stock at the lower of 85% of the fair value of shares on either the first or last day of the offering period. Under the ESPP, a total of 250,000 shares of Common Stock were initially reserved for issuance. During 2022 and 2021, 45,304 and 40,146 shares were purchased and issued through the ESPP at total discounts of $10 and $24, respectively.