EMPLOYEE EQUITY-BASED COMPENSATION

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

EMPLOYEE EQUITY-BASED COMPENSATION

NOTE 12. EMPLOYEE EQUITY-BASED COMPENSATION

The following table summarizes option activity under the Company's equity-based compensation plans for the three months ended March 31, 2023:

	Number of Shares	Weighted Average Exercise Price per Share
Options outstanding January 1, 2023	5,408,661	$	14.60
Granted	100,000	0.51
Forfeited	(99,934)	8.15
Exercised	—	—
Expired	(132,874)	13.15
Options outstanding March 31, 2023	5,275,853	$	14.49

The following table shows summary information for outstanding options and options that are exercisable (vested) as of March 31, 2023:

	Options Outstanding		Options Exercisable
Number of options	5,275,853		4,422,198
Weighted average remaining contractual term (in years)	4.62		4.06
Weighted average exercise price	$	14.49	$	15.37
Weighted average fair value	$	9.01	$	9.50
Aggregate intrinsic value (in thousands)	$	20	$	—

The following table summarizes RSU and restricted stock award activity for the three months ended March 31, 2023:

	Number of Shares	Weighted Average Grant Date Fair Value per Share
Outstanding January 1, 2023	4,355,420	$	4.29
Granted	1,833,230	0.62
Forfeited	(695,050)	4.30
Released	(2,150,702)	1.88
Outstanding March 31, 2023	3,342,898	$	3.82

The table below summarizes equity-based compensation expense for the three months ended March 31, 2023 and 2022 (in thousands):

	Three Months Ended March 31,
	2023		2022
Cost of sales	$	90	$	175
Research and development	605		362
Sales, general and administrative	(140)		2,442
	$	555	$	2,979

Equity-based compensation expense decreased for the three months ended March 31, 2023 when compared to the three months ended March 31, 2022, primarily due to the reversal of equity-based compensation expense from forfeitures. Employees separating from the Company forfeited an increased number of stock options and RSUs than in the previous period.

The table below summarizes share-based compensation cost capitalized to inventory for the three months ended March 31, 2023 and 2022 (in thousands):

	Three Months Ended March 31,
	2023		2022
Cost capitalized to inventory	$	74	$	43

As of March 31, 2023, unrecognized equity-based compensation expense related to unvested stock options and unvested RSUs was $1.2 million and $3.3 million, respectively. This is expected to be recognized over the years 2023 through 2027.

Included in the above-noted RSU and restricted stock award outstanding amounts are performance-based RSUs which vest only upon the achievement of certain targets. Performance-based RSUs contingently vest over a period of 1 to 3 years, depending on the nature of the performance goal, and have contractual lives of 10 years. These units were valued in the same manner as other RSUs, based on the published closing market price on the day before the grant date. However, the Company only recognizes stock compensation expense to the extent that the targets are determined to be probable of being achieved, which triggers the vesting of the performance options.

During 2021, the Company granted performance-based RSUs of which 103,299 were outstanding as of March 31, 2023. No activity occurred during the three months ended March 31, 2023, and the targets associated with the performance-based RSUs are not considered probable of being achieved. No share-based compensation cost was recorded for the performance-based RSUs for the three months ended March 31, 2023 and 2022.