The Company’s 2013 Equity Incentive Plan, 2018 Inducement Equity Incentive Plan, and the 2022 Equity Incentive Plan (the “Plans”) authorize the grant of stock options, restricted stock units (“RSUs”) and other equity awards to employees, directors and consultants. As of December 31, 2022, there were 15,057,772 shares authorized under the Plans. The Company has also granted RSUs that include service or service and certain performance conditions, or performance stock units (“PSUs”). RSUs generally vest over service periods of 1-3 years at which time award recipients receive shares of common stock equivalent to the originally awarded number of RSUs. In the case of PSUs, the number of PSUs that vest will be contingent on satisfying the service period and also based on achievement of all or part of the required performance obligations. All stock


Non-vested RSUs and PSUs	Share Equivalent	Weighted-Average Grant Date Fair Value		Weighted- average remaining contractual term (in years)	Aggregate intrinsic value (in thousands)
Non-vested at January 1, 2022	1,333,215	$	41.32	2.0	$	56,302
Changes during the year:
Granted	2,067,562	24.78
Vested	(759,305)	34.25
Forfeited	(260,850)	36.05
Non-vested at December 31, 2022	2,380,622	$	29.93	2.0	$	19,031

The grant-date fair value of the RSUs and PSUs is determined based on the closing price of the Company’s common stock on the date of grant. The fair value of vested RSUs and PSUs was $18.6 million, $11.7 million and $7.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. The intrinsic value of vested RSUs and PSUs was $20.1 million, $44.5 million and $12.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.

During 2021 and 2020, the Company modified certain performance conditions of its PSUs for approximately 10 employees in each year which were originally granted in 2020 and 2019. These stock award modifications resulted in incremental stock-based compensation expense of $3.0 million, and $4.7 million for 2021 and 2020, respectively, recognized from the date of the modification over the remaining vesting period of the awards, adjusted for performance conditions and forfeitures.


	Shares	Weighted- average exercise price per share		Weighted- average remaining contractual term (in years)	Aggregate intrinsic value (in thousands)
Outstanding at January 1, 2022	2,017,791	$	16.93	5.3	$	51,105
Canceled and forfeited	(122,304)	21.60
Exercised	(128,627)	11.23
Outstanding at December 31, 2022	1,766,860	$	17.01	4.1	$	265

December 31, 2022:
Options vested and expected to vest	1,766,860	$	17.01	4.1	$	265
Options exercisable	1,682,399	$	16.65	3.9	$	265

The weighted-average grant-date fair value per share of options granted with exercise prices equal to the market price on the date of the grant was $18.89 for the year ended December 31, 2020. The aggregate intrinsic value in the table above is calculated as the difference between the exercise price of the underlying options and the quoted price of the Company’s common stock for all options that were in-the-money at December 31, 2022. The aggregate intrinsic value of options exercised was $2.3 million, $26.9 million, and $39.9 million during 2022, 2021, and 2020, respectively, determined as of the option exercise date. The fair value of options vested was $2.2 million, $3.7 million and $4.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.


	Outstanding		Exercisable
Exercise Price	Number of Shares	Weighted- Average Remaining Contractual Life in Years	Number of Shares	Weighted- Average Remaining Contractual Life in Years
$1.92 – $12.56	299,786	4.5	296,765	4.4
$12.77 – $14.99	465,815	2.6	465,681	2.6
$15.21 – $18.55	232,108	2.5	224,001	2.2
$18.68 – $22.71	297,348	4.6	278,562	4.4
$23.00 – $66.91	471,803	5.8	417,390	5.7
	1,766,860		1,682,399

The following table sets forth stock-based compensation expense related to stock-based arrangements under the Plans as presented within the consolidated statement of operations for the years ended December 31 (in thousands):


	2022		2021		2020
Cost of revenue	$	2,397	$	1,870	$	983
Research and development	5,972		5,723		3,864
Selling, general and administrative	15,330		21,270		13,643
Total stock-based compensation expense	$	23,699	$	28,863	$	18,490

As of December 31, 2022, total unrecognized stock-based compensation cost related to non-vested options and RSUs was $36.7 million for awards with a service component and $0.1 million for awards with a service and performance component. This cost will be recognized on a straight-line basis over the weighted-average remaining service period of approximately 2.0 years, for stock awards with a service component, and less than one year for stock awards with a service and performance component. The Company utilizes newly issued shares to satisfy option exercises. No tax benefit was recognized related to stock-based compensation cost since the Company has not reported taxable income to date and has established a full valuation allowance to offset all of the potential tax benefits associated with its deferred tax assets.

The Company grants RSUs to employees, directors and consultants and PSUs to employees and values these awards based on the grant date fair value, using the closing stock price of the Company’s shares on the date of the grant. Stock-based compensation expense is recognized based on awards ultimately expected to vest using actual forfeitures when incurred. The percentage achievement and vesting of PSU awards are contingent upon the achievement of predetermined tiered revenue performance goals. The Company assesses the probability of the awards expected to vest, based on the performance goals, and if probable, records compensation expense over the estimated service period. Updates to the expected probability are recorded cumulatively and remaining compensation expense, if any, is recognized over the remaining estimated service period.

Prior to January 1, 2021, the company granted stock options to employees, directors and consultants. The fair value of each employee stock option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

The risk-free interest rates are based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term. For purposes of determining the expected term of the awards in the absence of sufficient historical data relating to stock-option exercises, the Company applies a simplified approach in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award. The Company has not declared or paid any dividends and does not currently expect to do so in the foreseeable future. Expected volatility is based on the historical cumulative volatility of the Company’s stock price.

The Company’s 2013 Employee Stock Purchase Plan (“ESPP”) provides eligible employees with an opportunity to purchase common stock from the Company and to pay for their purchases through payroll deductions. The ESPP has overlapping offering periods of approximately 12 months in length. The offering periods generally start with the first trading day on or after March 1 and September 1 of each year and end on the first trading day on or after March 1 and September 1 of the following year, approximately 12 months later. Within each offering period, shares are purchased each six months on an exercise date.

An employee electing to participate in the ESPP (a “participant”) will be granted an option at the start of the offering period to purchase shares with contributions in any whole percentage ranging from 0% to 10% (or greater or lesser percentages or dollar amounts that the administrator determines) of the participant’s eligible compensation. The participant’s contributions will be accumulated and then used to purchase the Company’s shares on each exercise date. The purchase price on the exercise date will be 85% of the fair market value of the lesser of the Company’s share price on either the first trading day of the offering period or on the exercise date.

During 2022, 2021 and 2020, shares issued under the ESPP were 150,341, 64,809 and 89,477, respectively. The Company recorded share-based compensation expense for shares issued from the ESPP of $2.2 million, $1.3 million and $0.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. A total of 2,204,647 shares of common stock have been reserved for issuance under the ESPP, of which 883,793 shares were available for issuance as of December 31, 2022.