The Company maintains a stock incentive plan, which permits the granting of incentive stock options or nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other stock-based awards. The equity-based awards for employees will vest over a four-year period, pursuant to two different vesting schedules. For initial equity-based awards granted to employees, the first vest is generally a one-year cliff vest, followed by monthly vesting for the final three years. Thereafter, annual equity-based awards granted to employees typically vest monthly over the four-year vest term. The initial equity-based awards granted to the Company’s non-employee, independent directors upon appointment to the board of directors will vest over a three-year period, with the first vest being a one-year cliff, followed by monthly vesting over the remaining two years. Thereafter, annual equity-based awards granted to the Company’s non-employee, independent directors will cliff vest after one year from the date of grant.

The following table summarizes the stock option activity for the three months ended March 31, 2023 (in thousands, except share and per share data):


	Number of Shares			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2023		3,846,532		$	7.02		8.31	$	9,083
Granted		542,052		$	5.41
Exercised		(10,769	)	$	0.84
Forfeited		(118,161	)	$	12.69
Expired		(780	)	$	15.09
Outstanding at March 31, 2023		4,258,874		$	6.68		8.10	$	3,783
Exercisable at March 31, 2023		1,584,270		$	5.30		7.46	$	2,187
Vested and expected to vest at March 31, 2023		3,974,192		$	7.12		8.26	$	3,070

The weighted average assumptions used in the Black-Scholes pricing model for stock options granted during the three months ended March 31, 2023, were as follows:


	For the Three Months Ended March 31,
	2023			2022
Estimated dividend yield		-	%		-	%
Weighted-average expected stock price volatility		35.04	%		33.10	%
Weighted-average risk-free interest rate		4.11	%		2.01	%
Expected average term of options (in years)		6.25			6.25
Weighted-average fair value of common stock	$	5.41		$	15.07
Weighted-average fair value per option	$	2.29		$	5.48

The following table summarizes the restricted stock unit activity for the three months ended March 31, 2023 (in thousands, except share and per share data):


	Number of Shares		Weighted Average Grant Date Fair Value per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2023		28,071	$	7.43		0.42	$	158
Granted		118,150	$	5.41
Vested		—	$	—
Forfeited		—	$	—
Outstanding at March 31, 2023		146,221	$	5.80		1.98	$	433
Vested and expected to vest at March 31, 2023		142,221	$	5.80		1.98	$	433

The Company also maintains an employee stock purchase plan (ESPP) that authorizes the issuance of shares of common stock pursuant to purchase rights granted to eligible employees. Unless otherwise determined by the Company’s board of directors, shares of the Company’s common stock will be purchased for the accounts of employees participating in the Company’s ESPP at a price per share equal to the lesser of (i) 85% of the fair market value of a share of the Company’s common stock on the first day of an offering; or (ii) 85% of the fair market value of a share of the Company’s common stock on the date of purchase. Offering periods are generally six months long; beginning on May 15, 2023, offering periods begin on June 1 and December 1 of each year. The Company did not issue any shares of common stock under the ESPP during either of the three months ended March 31, 2023 or 2022.

Stock-based compensation expense included in the accompanying condensed financial statements was as follows (in thousands):


	For the Three Months Ended March 31,
	2023		2022
Cost of sales	$	36	$	19
Research and development		37		65
Sales and marketing		152		99
General and administrative		785		604
Total stock-based compensation expense	$	1,010	$	787

Stock-based compensation expense related to stock options was $0.9 million and $0.8 million for the three months ended March 31, 2023 and 2022, respectively. Unrecognized compensation expense related to stock options was $9.8 million at March 31, 2023, which is expected to be recognized as expense over the weighted-average period of 3.17 years.

Stock-based compensation expense related to restricted stock units was $0.1 million and zero for the three months ended March 31, 2023 and 2022, respectively. Unrecognized compensation expense related to restricted stock units was $0.7 million at March 31, 2023, which is expected to be recognized as expense over the weighted-average period of 3.19 years.

Stock-based compensation expense related to the ESPP was not significant for either of the three months ended March 31, 2023 or 2022. Total compensation cost related to the ESPP not yet recognized also was not significant in those periods. As of March 31, 2023, an insignificant amount has been withheld on behalf of employees for future purchases under the ESPP.