determined by the Board of Directors for a grant or certain performance conditions determined by the Board of Directors for a grant. The fair value of the stock options granted with a service period based condition is estimated at the date of grant using the Black-Scholes option pricing model. The fair value of the stock options granted with a market based condition is estimated at the date of grant using the Monte Carlo simulation model.

The following table summarizes the components of stock-based compensation expense included in the consolidated statements of operations:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Stock-Based Compensation Expense:
Cost of revenue	$	125	$	140	$	250	$	253
Sales and marketing expense	431		574		862		928
Research and development expense	709		656		1,410		1,067
General and administrative expense	752		599		1,563		1,095
	$	2,017	$	1,969	$	4,085	$	3,343


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Stock-based compensation expense by type:
Employee stock option plan	$	1,975	$	1,872	$	3,993	$	3,145
Non-employee stock option plan	12		12		23		23
Subsidiary stock option plan	30		85		69		175
	$	2,017	$	1,969	$	4,085	$	3,343

The following table summarizes the Company’s employee share option activities during the six months ended June 30, 2023:


	Number of Option Shares	Weighted Average Grant Date Fair Value		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2022	9,211,641	$	3.58	$	8.24	6.36 years
Granted	24,000	6.54		11.85
Exercised	(140,775)	1.64		4.00
Forfeited/cancelled	(24,219)	11.88		24.45
Outstanding at June 30, 2023	9,070,647	$	3.64	$	8.11	5.59 years
Vested and exercisable at June 30, 2023	6,635,252

As of June 30, 2023 and December 31, 2022, $11,927 and $16,009, respectively, of total unrecognized employee stock-based compensation expense, net of estimated forfeitures, related to stock-based awards for ACM were expected to be recognized over a weighted-average period of 1.19 years and 1.53 years, respectively. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures.

The fair value of options granted to employees with a service period based condition is estimated on the grant date using the Black-Scholes valuation with following assumptions:


	Six Months Ended June 30, 2023	Years ended December 31, 2022
Fair value of share of common stock (1)	$11.85	$16.83-$25.45
Expected term in years(2)	6.25	5.50-6.25
Volatility(3)	52%	49.43%-50.87%
Risk-free interest rate(4)	4%	1.7%-3.04%
Expected dividend(5)	0%	0%

(2)Expected term of share options is based on the average of the vesting period and the contractual term for each grant according to Staff Accounting Bulletin 110.

(3)Volatility is calculated based on the historical volatility of ACM’s comparable companies in the period equal to the expected term of each grant.

(4)Risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the share options in effect at the time of grant.

The following table summarizes the Company’s non-employee share option activities during the six months ended June 30, 2023:


	Number of Option Shares	Weighted Average Grant Date Fair Value		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2022	1,483,658	$	0.38	$	1.15	3.68 years
Exercised	(155,429)	0.24		0.57
Forfeited/cancelled	(8,103)	0.22		0.50
Outstanding at June 30, 2023	1,320,126	$	0.40	$	1.22	3.04 years
Vested and exercisable at June 30, 2023	1,308,876

As of June 30, 2023 and December 31, 2022, $32 and $55, respectively, of total unrecognized non-employee stock-based compensation expense, net of estimated forfeitures, related to stock-based awards were expected to be recognized over a weighted-average period of 0.03 years and 0.06 years, respectively. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures.

In January 2020, ACM Shanghai adopted a 2019 Stock Option Incentive Plan (the “Subsidiary Stock Option Plan”) that provides for, among other incentives, the granting to officers, directors, employees of options to purchase shares of ACM Shanghai’s common stock. The fair value of the stock options granted is estimated at the date of grant based on the Black-Scholes option pricing model using assumptions generally consistent with those used for ACM’s stock options. Because ACM Shanghai shares have a short history of trading on a public market, the expected volatility is estimated with reference

to the average historical volatility of a group of publicly traded companies that are believed to have similar characteristics to ACM Shanghai.

The following table summarizes the ACM Shanghai stock option activities during the six months ended June 30, 2023:


	Number of Option Shares in ACM Shanghai	Weighted Average Grant Date Fair Value		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2022	5,377,500	$	0.23	$	1.93	1.76 years
Exercise	(2,150,309)	$	0.20	$	1.88
Forfeited/cancelled	(92,308)	$	0.23	$	1.88
Outstanding at June 30, 2023	3,134,883	$	0.23	$	1.90	1.35 years
Vested and exercisable at June 30, 2023	492,308

During the three months ended June 30, 2023 and 2022, the Company recognized stock-based compensation expense of $2,017 and $1,969, respectively, and during the six months ended June 30, 2023 and 2022, the Company recognized stock-based compensation expense of $69 and $175, respectively, related to stock option grants of ACM Shanghai.

As of June 30, 2023 and December 31, 2022, $76 and $160, respectively, of total unrecognized non-employee stock-based compensation expense, net of estimated forfeitures, related to ACM Shanghai stock-based awards were expected to be recognized over a weighted-average period of 0.4 years and 0.8 years, respectively. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures.