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STOCK-BASED COMPENSATION
 9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION
8. STOCK-BASED COMPENSATION
2020 Equity Incentive Plan
In April 2020, the Board of Directors of D-Wave Systems approved the 2020 Equity Incentive Plan (the "2020 Plan") which provides for the grant of qualified ISO and NSO, restricted stock, RSU or other awards to the Company’s employees, officers, directors, advisors, and outside consultants. After the closing of the Merger effective August 5, 2022, no additional awards were issued under the 2020 Plan. Stock options granted under the 2020 Plan will be converted applying the Conversion Ratio to the underlying common stock at the exercise date.
2022 Equity Incentive Plan
On August 5, 2022, the shareholders approved the D-Wave Quantum Inc. 2022 Equity Incentive Plan (the “2022 Plan”), which became effective immediately upon the closing of the Merger. While the 2022 Plan allows for the issuance of awards with a service condition, a performance condition, a market condition, or some combination of the three, to date, the Company has only issued awards subject to a service condition. Awards issued under the 2022 Plan have vesting periods ranging from under one year to four years from the original grant date, and all awards issued to date under the 2022 Plan will expire ten years from the original grant date.
Share-based compensation awards are settled by issuing new shares.
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 optionsWeighted  average  exercise  price  ($)Weighted average remaining contractual term (years)Aggregate intrinsic value ($)
Outstanding as of 12/31/2023*10,300,5671.73 6.81— 
Granted2,921,0821.30 — — 
Exercised(93,973)0.89 — 46 
Forfeited and expired(251,530)3.68 — — 
Outstanding as of September 30, 202412,876,1461.60 6.78897 
Options exercisable as of September 30, 202410,825,0391.38 6.42824 
Options unvested as of September 30, 20242,051,1074.10 8.7173 
*As of December 31, 2023, a total of 10,547,844 options had been issued and remained outstanding under the 2020 Plan. The number of options, along with the weighted average exercise price and weighted average remaining contractual term shown in the table above, have been adjusted using the Conversion Ratio applied to these 10,547,844 options.
Restricted stock unit awards
The following table summarizes the RSU activity and related information under the 2022 Plan (in thousands except share and per share data):
Number of RSUsWeighted average Grant Date Fair Value ($)Aggregate intrinsic value ($)
Unvested as of December 31, 20237,045,813 3.13 6,201 
Granted6,028,616 1.72 — 
Forfeited and expired(286,226)2.98 — 
Vested(2,661,261)0.99 — 
Unvested as of September 30, 202410,126,942 2.86 9,954 
Employee Stock Purchase Plan
During the three months ended September 30, 2024, zero common shares were issued under the Employee Stock Purchase Plan. During the nine months ended September 30, 2024, 262,777 common shares were issued under the Employee Stock Purchase Plan.
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 September 30,Nine Months Ended September 30,
2024202320242023
Cost of revenue$159 $353 $487 $963 
Research and development1,3122,3473,7446,771
General and administrative2,084 2,913 6,289 8,849 
Sales and marketing499 271 1,264 779 
Total stock-based compensation$4,054 $5,884 $11,784 $17,362 
As of September 30, 2024, total unrecognized stock-based compensation cost, net of estimated forfeitures, related to our unvested stock awards was $22.4 million. This amount is based on an estimated future forfeiture rate of 2.7% per year and will be recognized over a weighted-average period of approximately 2.15 years.