The Company's Employee Stock Purchase Plan ("ESPP") and 2021 Incentive Award Plan (“2021 Plan”) were adopted by the Company’s Board of Directors on October 8, 2021. The ESPP and 2021 Plan were both adopted by the Company’s stockholders on October 19, 2021, and became effective on the date prior to the first date of the effectiveness of the registration statement on Form S-1 filed by the Company.

The ESPP initially provided participating employees with the opportunity to purchase up to an aggregate of 1,329,040 shares of the Company's common stock at 85% of the market price at the lesser of the date the purchase right is granted or exercisable. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022, and ending on January 1, 2031, by the lesser of 1% of all classes of the Company's common stock outstanding on the immediately preceding December 31, or such smaller number of shares as determined by the Company's Board or the committee. As of December 31, 2023, 2,758,808 shares remained available for issuance.

Eligible employees can contribute up to 15% of their gross base earnings for purchases under the ESPP through regular payroll deductions, limited to $25,000 worth of the Company’s shares of common stock for each calendar year in which the purchase right is outstanding. The Company currently holds offerings consisting of six-month periods commencing on January 1st and July 1st of each calendar year, with a single purchase date at the end of the purchase period on June 30th and December 31st of each calendar year.

During the years ended December 31, 2023 and 2022, the Company issued 73,442 and 38,968 shares, respectively, upon exercise of purchase rights. The Company recognizes compensation expense on a straight-line basis over the service period. During the years ended December 31, 2023 and 2022, the Company recognized $322 and $213 of compensation expense, respectively, related to the ESPP. There were no shares issued and no compensation expense was recognized related to the ESPP during 2021.

Below are the assumptions used for the years ended December 31, 2023 and 2022 in determining the fair value of shares under the ESPP.


	Year Ended December 31,
	2023			2022
Expected volatility		54.64	%		70.27	%
Expected dividends		—			—
Expected term (in years)		0.50			0.50
Discount rate		15.00	%		15.00	%
Risk-free rate		5.26	%		2.79	%

The 2021 Plan authorized the Company to issue an initial aggregate maximum number of shares of common stock equal to (i) 7,641,979 shares plus (ii) a number of shares that are available for issuance under the 2011 Plan plus (iii) any shares that are subject to 2011 Plan that become available for issuance (via expiration, forfeitures, etc.) plus (iv) an increase commencing on January 1, 2022, and continuing annually on the anniversary thereof through January 1, 2031, equal to the lesser of (a) 5% of the shares of all classes of the Company’s common stock outstanding on the last day of the immediately preceding calendar year or (b) such smaller number of shares as determined by the Company’s Board or the committee. As of December 31, 2023, the Company had reserved 13,510,971 shares of common stock for future grant.

The following table summarizes the Company’s stock option plan and the activity for the year ended December 31, 2023.


	Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)
Outstanding, December 31, 2022		6,538,536		$	10.02		7.36
Granted		225,000			18.33
Exercised or released		(458,005	)		6.56
Forfeited or expired		(361,633	)		15.29
Outstanding, December 31, 2023		5,943,898		$	10.28		6.53
Exercisable, December 31, 2023		4,292,558		$	8.51		6.02
Vested and expected to vest at December 31, 2023		5,938,438		$	10.27		6.53

There were 225,000, 359,054 and 3,467,069 options granted during the years ended December 31, 2023, 2022 and 2021, at a weighted average strike price of $18.33, $16.08 and $14.63, respectively.

The Company received cash in the amount of $2,406, $5,271 and $445 from the exercise of stock options for the years ended December 31, 2023, 2022 and 2021, respectively. The tax benefit from equity options exercised were $560, $1,223 and $93 for the years ended December 31, 2023, 2022 and 2021, respectively.

The aggregate intrinsic value of options outstanding at December 31, 2023, is $22,900. The aggregate intrinsic value of vested and exercisable options at December 31, 2023 is $21,530. The aggregate intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021 is $4,742, $18,764 and $3,743, respectively.

As of December 31, 2023, there was approximately $5,634 total unrecognized compensation cost related to non-vested stock option compensation arrangements, which is expected to be recognized over a weighted average period of 1.78 years.

Below are the assumptions used for the years ended December 31, 2023, 2022 and 2021 in determining the fair value of each option award:


	Year Ended December 31,
	2023			2022		2021
Expected volatility		66.20	%	55% - 70%		52% - 55%
Expected dividends		—			—		—
Expected term (in years)		6.25			6.00	5.75 - 6.25
Risk-free rate		4.11	%	1.69 - 2.79%		0.47% - 1.20%

RSUs granted under the 2021 Plan have a ten-year contractual term and typically vest over a three or four-year period, contingent upon continued service with the Company. The following table summarizes the Company's restricted stock units' activity for the years ended December 31, 2023.


	Year Ended December 31,
	2023
	Restricted Stock Units			Weighted-Average Fair Value
Outstanding, beginning of period		964,054		$	17.74
Granted		776,359			16.56
Vested		(273,618	)		17.65
Forfeited or expired		(149,393	)		17.81
Outstanding, end of period		1,317,402		$	17.06
Vested and expected to vest at end of period		1,305,827		$	17.05

During the years ended December 31, 2023, 2022 and 2021, the Company granted 776,359, 929,090 and 79,886 RSU's, respectively. The grant date fair value for RSUs is the thirty-day trailing average market price of the common stock on the date of grant.

As of December 31, 2023, there was approximately $18,689 total unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted average period of 2.88 years.

Stock-based compensation expenses are recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. During the years ended December 31, 2023, 2022 and 2021, the Company recognized $5,542, $8,500, and $4,863 respectively, of compensation expense related to stock options. During the years ended December 31, 2023, 2022 and 2021, the Company recognized $6,822, $1,865 and $85, respectively, of compensation expense related to RSUs.