Legacy SmartRent’s board of directors adopted, and its stockholders approved, the SmartRent.com, Inc. 2018 Stock Plan (the “2018 Stock Plan”), effective March 2018. The purpose of the 2018 Stock Plan was to advance the interests of Legacy SmartRent and its stockholders by providing an incentive to attract, retain and reward persons performing services for Legacy SmartRent and by motivating such persons to contribute to the growth and profitability of Legacy SmartRent. The 2018 Stock Plan seeks to achieve this purpose by providing awards in the form of options, restricted stock purchase rights or restricted stock bonuses. Awards granted under the 2018 Stock Plan generally expire ten years from the date of grant and become vested and exercisable over a four-year period. All options are subject to certain provisions that may impact these vesting schedules.

Summaries of the Company’s 2018 Stock Plan activity for the six months ended June 30, 2023 is presented below.


	Options Outstanding
	Number of Options			Weighted- Average Exercise Price ($ per share)		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value
December 31, 2022		9,671		$	0.67		6.99	$	18,234
Granted		3,070		$	2.87
Exercised		(151	)	$	0.47
March 31, 2023		12,590		$	1.21		7.50	$	19,061
Exercised		(200	)	$	0.47
Forfeited		(631	)	$	4.15
June 30, 2023		11,759		$	1.07		5.78	$	32,807
Exercisable options as of June 30, 2023		8,348		$	0.56		4.45	$	27,620

During the three months ended June 30, 2023 and 2022, stock-based compensation expense of $369 and $113, respectively, was recognized in connection with the outstanding options. During the six months ended June 30, 2023 and 2022, stock-based compensation expense of $800 and $228, respectively, was recognized in connection with the outstanding options. As of June 30, 2023, there is $4,967 of unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 5.8 years.

In April 2021, the board of directors of Legacy SmartRent executed a unanimous written consent to provide an additional incentive to certain employees of Legacy SmartRent by amending the 2018 Stock Plan to allow for the issuance of RSUs and granted a total of 1,533 RSUs to certain employees which vest over four years. The estimated fair value for each RSU issued was approximately $21.55 per share and the total stock-based compensation expense to be amortized over the vesting period is $33,033.

In connection with the Business Combination, the Company's board of directors (the "Board") approved and implemented the SmartRent, Inc. 2021 Equity Incentive Plan (the "2021 Plan"). The purpose of the 2021 Plan is to enhance the Company's ability to attract, retain and motivate persons who make, or are expected to make, important contributions to the Company by providing these individuals with equity ownership opportunities and equity-linked compensation opportunities.

The 2021 Plan authorizes the compensation committee to provide incentive compensation in the form of stock options, restricted stock and stock units, performance shares and units, other stock-based awards and cash-based awards. Under the 2021 Plan, the Company is authorized to issue up to 15,500 shares of common stock. Non-employee board member RSUs will vest either over one year or three years. The RSUs granted to employees are generally subject to a four-year vesting schedule and all vesting shall be subject to the recipient’s continued employment with the Company or its subsidiaries through the applicable vesting dates. The table below summarizes the activity related to the RSUs.


	Restricted Stock Units
	Number of Restricted Stock Units			Weighted Average Grant Date Fair Value (per share)
December 31, 2022		5,493		$	5.43
Granted		2,241		$	2.86
Vested or distributed		(751	)	$	6.06
Forfeited		(177	)	$	3.98
March 31, 2023		6,806		$	4.55
Granted		357		$	3.31
Vested or distributed		(654	)	$	4.97
Forfeited		(909	)	$	4.52
June 30, 2022		5,600		$	4.43

No right to any Common Stock is earned or accrued until such time that vesting occurs, nor does the grant of the RSU award confer any right to continue vesting or employment. Compensation expense associated with the unvested RSUs is recognized on a straight-line basis over the vesting period.

During the three months ended June 30, 2023 and 2022 respectively, stock-based compensation expense of $2,875 and $3,403 was recognized in connection with the vesting of all RSUs. During the six months ended June 30, 2023 and 2022 respectively, stock-based compensation expense of $5,992 and $6,526 was recognized in connection with the vesting of all RSUs. As of June 30, 2023, there is $23,257 of unrecognized compensation expense related to restricted stock units, which is expected to be recognized over a weighted-average period of 1.4 years.

The Company has the ability to initially issue up to 2,000 shares of Common Stock under the Employee Stock Purchase Plan ("ESPP"), subject to annual increases effective as of January 1, 2022 and each subsequent January 1 through and including January 1, 2030 in an amount equal to the smallest of (i) 1% of the number of shares of the Common Stock outstanding as of the immediately preceding December 31, (ii) 2,000 shares or (iii) such amount, if any, as the Board may determine.

During the three months ended June 30, 2023 and 2022, there were no shares of Common Stock issued pursuant to the ESPP and employees enrolled in the Company’s ESPP did not purchase any shares. During the six months ended June 30, 2023 and 2022, employees enrolled in the Company’s ESPP purchased 176 and 75 shares, respectively, of the Company’s Common Stock and there were 1,985 and 1,939 shares of Common Stock issued pursuant to the ESPP, respectively. As of June 30, 2023 and 2022, the number of shares available for sale under the ESPP were 5,540 and 3,864, respectively.

During the three months ended June 30, 2023 and 2022, stock-based compensation expense of $32 and $105, respectively, was recognized in connection with the ESPP. During the six months ended June 30, 2023 and 2022, stock-based compensation expense of $55 and $191, respectively, was recognized in connection with the ESPP.

The fair value of stock option grants is estimated by the Company on the date of grant using the Black Scholes-Merton option pricing model with the following weighted-average assumptions for the six months ended June 30, 2023 and 2022. During the six months ended June 30, 2023 and 2022, there were 3,070 and 175 options granted, respectively. There were no options granted during the three months ended June 30, 2023 and 2022.


	For the six months ended June 30,
	2023			2022
Risk free interest		3.55	%		1.47	%
Dividend yield		0.00	%		0.00	%
Expected volatility		75.00	%		58.80	%
Expected life (years)		6.08			6.08

The Company recorded stock-based compensation expense as follows.


	For the three months ended June 30,				For the six months ended June 30,
	2023		2022		2023		2022
Cost of revenue	$	253	$	-	$	504	$	-
Research and development		912		933		1,890		1,814
Sales and marketing		182		590		418		1,129
General and administrative		1,929		2,300		4,144		4,403
Total	$	3,276	$	3,823	$	6,956	$	7,346

During the three and six months ended 2022, stock-based compensation expense of $202 and $401, respectively, was recognized for 844 shares granted in connection with the Company's February 2020 acquisition of a foreign supplier and are recorded as a component of general and administrative expense. There was no such expense recorded during the three months ended June 30, 2023 as these shares fully vested during the three months ended March 31, 2023. During the six months ended June 30, 2023 $109 of such expense was recorded.