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Stock-based compensation | 6 Months Ended
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Jun. 30, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-based compensation | Stock-based compensation For the six months ended June 30, 2023 and 2022, stock-based compensation is associated with stock options, restricted stock units ("RSUs"), and the Company's Employee Stock Purchase Plan ("ESPP"). Common stock option activity The following table summarizes the Company’s stock option activity during the periods presented (in thousands except share and per share data):
| Number of options outstanding | Weighted average exercise price ($) | Weighted average remaining contractual term (years) | Aggregate intrinsic value ($)
Balance as of December 31, 2022 | 15,387,546 | $ | 1.76 |  | 7.12 | $ | 8,763 |
Granted | — | — |  | — |  | — |
Exercised | (1,486,404) | 0.81 |  | — |  | 70 |
Forfeited | (924,993) | 4.15 |  | — |  | — |
Expired | (261,476) | 1.84 |  | — |  | — |
Balance as of June 30, 2023 | 12,714,673 | $ | 1.70 |  | 6.78 | $ | 14,344 |
Options exercisable as of June 30, 2023 | 10,478,450 | $ | 1.19 |  | 6.45 | $ | 12,545 |
Options unvested as of June 30, 2023 | 2,229,789 | $ | 4.09 |  | 8.35 | $ | 1,791 |
The aggregate intrinsic value of stock options was calculated as the difference between the exercise price of the stock options and the estimated fair value of the Common Shares for those stock options that had exercise prices lower than the fair value of the Common Shares. As of June 30, 2023, total unrecognized compensation cost related to unvested stock option grants was approximately $6.7 million. This amount is expected to be recognized over a weighted average period of approximately 0.77 years. The total fair values of the stock options vested during the six months ended June 30, 2023 and 2022 was $2.4 million and $1.7 million respectively. Restricted stock unit awards In accordance with D-Wave's 2022 Equity Incentive Plan ("the 2022 Plan") RSUs granted to employees during the six months ended June 30, 2023 are subject to a service condition and will vest 25% on the first anniversary of the grant date, and then 6.25% each quarter subsequent to the first anniversary for twelve quarters. RSUs granted to members of the Board of Directors during the six months ended June 30, 2023 are subject to a service condition, and will be fully vested on the date of the Company's 2024 annual shareholder meeting. The following table summarizes the RSU activity and related information under the 2022 Plan:
| Number of Outstanding |  | Weighted average Grant Date Fair Value ($)
Unvested as of December 31, 2022 | 8,143,304 |  |  | $ | 5.69 |
Granted | 4,423,933 |  |  | 0.89 |
Forfeited | (1,296,912) |  |  | 4.75 |
Vested | (167,605) |  |  | 4.02 |
Unvested as of June 30, 2023 | 11,102,720 |  |  | 3.93 |
Expected to vest as of June 30, 2023 | 10,503,954 |  |  | $ | 3.97 |
For the six months ended June 30, 2023, the weighted-average grant-date fair value of RSUs granted was $0.89. There were 167,605 RSUs vested during the six months ended June 30, 2023. As of June 30, 2023, the unrecognized stock- based compensation cost related to the RSUs was $30.4 million, which is expected to be recognized over a weighted-average period of 2.63 years. Employment Stock Purchase Plan In August 2022, the Company established the 2022 ESPP. The maximum number of shares of common stock that may be issued under the ESPP was initially 8,036,455. The number of shares reserved and available for issuance under the ESPP automatically increases each January 1, beginning on January 1, 2023 and each January 1 thereafter ending on January 1, 2032, by the lesser of (i) 1,607,291 shares of common stock, or (ii) 1.0% of the aggregate number of (i) shares of common stock outstanding and (ii) securities convertible into or exercisable for shares of common stock (whether vested or unvested) outstanding on December 31 of the preceding calendar year. As of June 30, 2023, the number of shares of common stock that may be issued under the ESPP is 8,036,455. As of June 30, 2023, 226,453 shares of common stock have been issued under the ESPP. During the three and six months ended June 30, 2023, the Company recorded stock-based compensation expense related to the ESPP of $0.1 million and $0.2 million, respectively, primarily classified as operating expenses within the consolidated statements of operations and comprehensive loss. Stock-based compensation expense The following table summarizes the stock-based compensation expense classified in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):
| Three months ended June 30,
| 2023 |  | 2022
Cost of revenue | $ | 232 |  |  | $ | 34 |
Research and development | 1,663 |  |  | 84 |
General and administrative | 2,642 |  |  | 641 |
Sales and marketing | 184 |  |  | 58 |
Total stock-based compensation | $ | 4,721 |  |  | $ | 817 |
| Six months ended June 30,
| 2023 |  | 2022
Cost of revenue | $ | 610 |  |  | $ | 66 |
Research and development | 4,424 |  |  | 144 |
General and administrative | 5,935 |  |  | 1,270 |
Sales and marketing | 508 |  |  | 120 |
Total stock-based compensation | $ | 11,477 |  |  | $ | 1,600 |

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