Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

Stock-Based Compensation
3 Months Ended
Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Stock Options
Stock option activity under the Company’s incentive plan is as follows (in thousands, except share and per share amounts):
Options Outstanding
Number of Options Weighted–Average Exercise Price Weighted-Average Remaining Contractual Life (years) Aggregate Intrinsic Value
Balance – December 31, 2022 10,521,571  $ 1.59  4.87 $ 61 
Exercised (178,564) 0.38 
Cancelled/forfeited (170,516) 2.82 
Balance – March 31, 2023 10,172,491  1.59  4.05 98 
Options vested and exercisable – March 31, 2023 9,040,393  $ 1.32  3.58 $ 98 
No options were granted during three months ended March 31, 2023 and 2022. The total grant date fair value of options that vested during three months ended March 31, 2023 and 2022 was $0.1 million and $4.4 million, respectively. The aggregate intrinsic value of options exercised during the three months ended March 31, 2023 and 2022 was nominal and $0.4 million, respectively. The aggregate intrinsic value is the difference between the current fair value of the underlying common stock and the exercise price for in-the-money stock options.
Market-Based Stock Options
In February 2021, the Company granted 1,017,170 stock options with market and liquidity event-related performance-based vesting criteria with an exercise price of $3.77 per share. 100% of the stock options vest upon
valuation of the Company’s stock at a stated price upon occurrence of specified transactions. Fair value was determined using the probability weighted expected term method (“PWERM”), which involves the estimation of future potential outcomes as well as values and probabilities associated with each potential outcome. Two potential scenarios were used in the PWERM that utilized 1) the value of the Company’s common equity, and 2) a Monte Carlo simulation to specifically value the award. The total grant date fair value of the award was determined to be $5.5 million. Since a liquidity event is not deemed probable until such event occurs, no compensation cost related to the performance condition was recognized prior to the Business Combination on June 16, 2022. Subsequently, the Company recorded stock-based compensation expense of $4.6 million for service periods completed prior to the Business Combination. As of March 31, 2023, the market-based vesting criteria had not been met.
Restricted Stock Units
The following table summarizes the activity for all RSU’s under all of the Company’s equity incentive plans for the three months ended March 31, 2023:
Number of shares Weighted–Average Grant Date Fair Value Per Share
Unvested – December 31, 2022 19,482,427  $ 1.75 
Granted 13,314,042  0.43 
Vested (2,549,326) 2.28 
Cancelled/forfeited (833,249) 2.69 
Balance – March 31, 2023 29,413,894  1.08 

Employee Stock Purchase Plan
In May 2022, the Company’s board of directors adopted the 2022 Employee Stock Purchase Plan (the “ESPP”), which was subsequently approved by the Company’s stockholders. The ESPP went into effect on November 16, 2022. Subject to certain limitations contained therein, the ESPP allows eligible employees to contribute, through payroll deductions, up to 20% of their eligible compensation to purchase the Company’s Class A common stock at a discounted price per share. As of March 31, 2023, no shares of Class A common stock had been purchased under the ESPP.

Stock-Based Compensation Expense
For the three months ended March 31, 2023 and 2022, the Company recognized a total of $4.9 million and $4.5 million of stock-based compensation expense, respectively, related to stock options and RSUs granted to employees and non-employees. Stock-based compensation expense was predominately recorded in selling, general and administrative expenses in the statements of operations for each period presented. As of March 31, 2023, the total unrecognized compensation expense related to unvested options and RSUs was $28.6 million, which the Company expects to recognize over an estimated weighted average period of 2.3 years.