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EQUITY-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
EQUITY-BASED COMPENSATION
NOTE 13. EQUITY-BASED COMPENSATION

The Company has one equity-based compensation plan as of December 31, 2023. This plan, the 2022 Omnibus Incentive Compensation Plan (“2022 Incentive Plan”), was adopted by the Company’s Board of Directors upon approval by the Company’s stockholders in May 2022. Upon adoption, the Company’s previous 2012 Omnibus Equity Incentive Plan (the “2012 Incentive Plan”) was automatically replaced and superseded by the 2022 Incentive Plan. Outstanding awards granted under the 2012 Incentive Plan remain in effect pursuant to their terms with vesting periods ranging from immediate to five years with a maximum contractual term of ten years.

Upon adoption in May 2022, the total number of shares of the Company’s common stock reserved and available for grant pursuant to the 2022 Incentive Plan was 0.6 million plus shares of common stock that remain available or that otherwise become available for grant under the 2012 Incentive Plan. At the Company’s 2023 Annual Meeting of Stockholders, the Company’s stockholders approved an additional 1.6 million shares of common stock reserved and available for grant under the 2022 Incentive Plan. As of December 31, 2023, the total shares reserved for the 2022 Incentive Plan is 3.4 million.

Stock options granted under the 2022 Incentive Plan vest in three years with a maximum contractual term of ten years while RSUs granted under this plan vest in a range from immediate to five years. The total number of shares of the Company’s common stock reserved and available for grant pursuant to the 2022 Incentive Plan as of
December 31, 2023 is 1.3 million.

The following table summarizes option activity during the years ended December 31, 2023 and 2022 and shows the exercisable shares as of December 31, 2023:

Number of SharesWeighted Average Exercise Price per Share
Options Outstanding January 1, 2022719,066 $138.91 
Granted14,000 30.47 
Forfeited(20,806)125.54 
Exercised(610)10.40 
Expired(170,918)109.61 
Options Outstanding December 31, 2022540,732 146.03 
Granted10,000 5.10 
Forfeited(11,927)81.01 
Exercised— — 
Expired(168,966)137.08 
Options Outstanding December 31, 2023369,839 148.40 
Exercisable December 31, 2023311,930 161.35 

Cash received from the exercise of options was $0.0 million, $0.0 million and $1.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. Upon exercise, shares are issued from shares authorized and held in reserve. The intrinsic value of options exercised was $0.0 million, $0.0 million and $3.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The total fair value of options vesting during the period was $5.2 million, $7.2 million, and $11.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company accounts for all option grants using the Black-Scholes option pricing model. The table below summarizes the inputs used to calculate the estimated fair value of options awarded for the years ended December 31:

202320222021
Expected term (in years)6.306.305.79
Volatility88 %66 %65 %
Expected dividends— — — 
Risk free interest rates4.0 %2.1 %1.1 %
Estimated forfeitures— %— %— %
Weighted average fair value$3.89 $1.88 $4.09 
The following table shows summary information for outstanding options and options that are exercisable (vested) as of December 31, 2023:

Options
Outstanding		Options
Exercisable
Number of options369,839 311,930 
Weighted average remaining contractual term (in years)4.834.65
Weighted average exercise price$148.40 $161.35 
Weighted average fair value$90.38 $97.42 
Aggregate intrinsic value (in millions)$— $— 

The aggregate intrinsic value in the table above represents the total pretax intrinsic value that would have been received by the option holders had all option holders exercised their options on that date. It is calculated as the difference between the Company’s closing stock price of $4.00 on the last trading day of 2023 and the exercise price multiplied by the number of shares for options where the exercise price is below the closing stock price. This amount changes based on the fair value of the Company’s stock.

The following table summarizes RSU activity during the years ended December 31, 2023 and 2022:

Number of SharesWeighted Average Grant Date Fair Value per Share
RSUs Outstanding January 1, 2022208,926 $107.77 
Granted422,690 15.29 
Forfeited(66,175)82.81 
Vested/released(129,953)37.02 
RSUs outstanding December 31, 2022435,488 42.91 
Granted1,305,220 7.14 
Forfeited(128,588)35.73 
Vested/released(372,684)32.39 
RSUs outstanding December 31, 20231,239,436 9.15 

The total fair value of RSUs vested and released during the period was $12.1 million, $4.8 million, and $8.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company records compensation cost based on the fair value of the award. The table below summarizes the weighted average fair value of RSUs awarded for the years ended December 31:

202320222021
Weighted average fair value$7.14 $15.29 $112.38 
The expense and tax benefits recognized on the Company’s consolidated statements of operations and comprehensive loss related to share-based compensation for the years ended December 31 (in thousands) is as follows:

202320222021
Cost of Sales$300 $665 $325 
Research and development1,396 1,419 4,102 
Sales, general and administrative3,691 8,541 17,620 
Total equity-based compensation expense$5,387 $10,625 $22,047 
Recognized tax benefit$— $— $— 

The share-based compensation cost capitalized to inventory or inventory transferred to property and equipment (also referred to as instruments) for the years ended December 31 (in thousands) is as follows:

202320222021
Cost capitalized to inventory$138 $254 $401 

As of December 31, 2023, unrecognized equity-based compensation cost related to unvested stock options, and unvested RSUs was $0.4 million and $6.6 million, respectively. This is expected to be recognized over the years 2024 through 2028 with a weighted-average period of 1.9 years.

Included in the above-noted stock options outstanding and share-based compensation expense are performance-based stock options which vest only upon the achievement of certain targets. Performance-based stock options are generally granted at-the-money, contingently vest over a period of 1 to 2 years, and have contractual lives of 10 years. These options are valued in the same manner and with the same inputs as the time-based options. However, the Company only recognizes share-based compensation expense when the targets are determined to be probable of being achieved. Performance-based stock options outstanding as of December 31, 2021 totaling 9,000 expired during 2022 and no additional performance-based stock options were granted leaving no performance-based stock options outstanding at December 31, 2023. There was no share-based compensation expense recognized for performance-based stock options for years ended December 31, 2023 and 2022 with $0.2 million recognized for year ended December 31, 2021.

Included in the above-noted RSU outstanding and share-based compensation expense 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. These units are 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 share-based compensation expense to the extent the targets are determined to be probable of being achieved. There were 27,778 performance-based RSUs outstanding as of December 31, 2021, which were forfeited when the performance goal wasn’t achieved with 17,448 and 10,330 forfeited in the years ended December 31, 2022 and 2023, respectively. No additional performance-based RSUs were granted leaving none outstanding at December 31, 2023. There was no share-based compensation expense recognized for performance-based RSUs for years ended December 31, 2023 and 2022 with $0.8 million recognized for year ended December 31, 2021.