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Stockholders' Equity | 3 Months Ended
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Mar. 31, 2023
Equity [Abstract] |
Stockholders' Equity | Note 6. Stockholders’ Equity At-The-Market offering On May 4, 2022, the Company entered into a Sales Agreement ("Sales Agreement"), with Stifel, Nicolaus & Company, Incorporated ("Stifel"), under which the Company may offer and sell from time to time at its sole discretion, up to an aggregate of 800,000 shares of its common stock, par value $0.0001 per share, through Stifel as its sales agent. The Company intends to use the net proceeds from the shares of common stock offered and sold to primarily replenish funds expended to satisfy anticipated tax withholding and remittance obligations related to the net settlement upon vesting of restricted stock unit awards (“RSU”) granted to employees under the equity incentive plans. The Company has filed a prospectus supplement pursuant to the Sales Agreement for the offer and sale of up to an aggregate of 800,000 shares of its common stock. Subject to the terms and conditions of the Sales Agreement, Stifel will sell the common stock from time to time, based upon instructions from the Company. The Company agreed to pay Stifel a commission of up to 3% of the gross sales proceeds of any common stock sold through Stifel under the Sales Agreement. During the three months ended March 31, 2023, the Company sold 100,000 shares of its common stock through Stifel, Nicolaus & Company, Incorporated ("Stifel") under a Sales Agreement at a weighted average price of $131.19 per share resulting in net proceeds to the Company of $12.7 million, after deducting underwriting discounts and commissions of $0.3 million and deferred offering costs of $0.1 million. Equity Incentive Plans The following table summarizes the RSU, performance based restricted stock unit awards ("PRSU"), and multi-year performance restricted stock units ("MYPSU") activity for the three months ended March 31, 2023:
| RSU |  |  | Grant Date |  |  | PRSU |  |  | Grant Date |  |  | MYPSU |  |  | Grant Date |
| Number |  |  | Fair |  |  | Number |  |  | Fair |  |  | Number |  |  | Fair |
| of |  |  | Value |  |  | of |  |  | Value |  |  | of |  |  | Value |
| Shares |  |  | per share |  |  | Shares |  |  | per share |  |  | Shares |  |  | per share |
Unvested at December 31, 2022 |  | 1,717,994 |  |  | $ | 73.6 |  |  |  | 58,954 |  |  | $ | 261.4 |  |  |  | 311,872 |  |  | $ | 88.6 |
Granted |  | 368,363 |  |  |  | 123.1 |  |  |  | 122,466 |  |  |  | 145.5 |  |  |  | — |  |  |  | — |
Vested |  | (234,633 | ) |  |  | 56.6 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Forfeited |  | (27,792 | ) |  |  | 67.4 |  |  |  | (58,954 | ) |  |  | 261.4 |  |  |  | — |  |  |  | — |
Unvested at March 31, 2023 |  | 1,823,932 |  |  | $ | 82.8 |  |  |  | 122,466 |  |  | $ | 145.5 |  |  |  | 311,872 |  |  | $ | 88.6 |
On August 4, 2020, the Compensation Committee of the Company adopted and approved the Executive Bonus and Retention Plan (the “Bonus and Retention Plan”). In August 2022, the Compensation Committee approved target bonus amounts and performance goals for the second half of the fiscal year 2022 (the “2022 Goals”). In February 2023, the Compensation Committee approved target bonus amounts for the fiscal year 2023 (the "2023 Goals"). The 2022 Goals and the 2023 Goals are based on the achievement of revenue and Non-GAAP operating profit, as well as individual performance goals. The awards for the actual payouts are granted in the quarter following the end of the performance period. The target bonuses were granted based on a fixed dollar amount to be settled in RSUs on the vesting date and hence the awards have been classified as liability-based awards until settled. Such expense is included in the non-cash adjustment within stock-based compensation expense on the condensed consolidated cash flow statements. The liability o f $0.1 million for 202 3 Goals was recorded as accrued expenses and other current liabilities in the condensed consolidated balance sheet as of March 31, 2023. Actual payouts for 2022 Goals ranged from 44% to 89% of target, based on performance. In February 2023 and March 2023, the Compensation Committee of the Company approved PRSUs for the year 2023 with performance goals based on the achievement of revenue over a one year performance period (the “PRSU 2023 Goals”) and achievement of relative total stockholder return with a two year performance period (the "2023 TSR PRSU Goals"). The grant-date fair value of each 2023 TSR PRSU Goals was determined using Monte Carlo simulation model. The assumptions used in the Monte Carlo simulation included expected volatility of 84.0% and 83.8%, risk free rate of 4.67% and 4.05%, no expected dividend yield and expected term of 1.9 years and 1.8 years for the awards issued in February 2023 and March 2023 respectively. The Company recognizes the expense related to the PRSU 2023 Goals and 2023 TSR PRSU Goals on a graded-vesting method over the requisite performance period. These grants are included in the PRSU awards granted in the table above. In April 2022, the Company approved a bonus plan for certain employees. The target bonuses are granted based on a fixed dollar amount to be settled in RSUs in the quarter following the end of the performance period. Due to the fixed dollar amount targets, the awards have been classified as liability-based awards until settled. Once settled, these awards are reflected as RSU granted in the above table. Such expense is included in the non-cash adjustment within stock-based compensation expense on the condensed consolidated cash flow statements. The liabili ty of $0.8 million was reco rded as accrued expenses and other current liabilities in the condensed consolidated balance sheet as of March 31, 2023. In February 2022, the Compensation Committee of the Company approved and granted to certain of the Company’s executive officers MYPSUs with vesting based on achievement of stock price targets, which are measured based on the 60-trading day average per share closing price of the Company’s common stock on the Nasdaq Global Market during the performance periods of up to six years from the date of grant, subject to the continued service of the grantee through the vest date. The grant-date fair value of each MYPSU was determined using Monte Carlo simulation model. The assumptions used in the Monte Carlo simulation included expected volatility of 44.4%, risk free rate of 1.83%, no expected dividend yield, expected term of six years and possible future stock prices over the performance period based on historical stock and market prices. The Company recognizes the expense related to the MYPSUs on a graded-vesting method over the requisite service period. In December 2021, the Compensation Committee of the Company approved PRSUs with performance goals for the year 2022 (the “PRSU 2022 Goals”). The PRSU 2022 Goals were based on the achievement of a revenue goal. These grants were not earned and were cancelled in February 2023. Stock-Based Compensation The following table presents the detail of stock-based compensation expense amounts included in the condensed consolidated statement of operations for each of the periods presented:
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
|  | (in thousands) |
Equity based awards |  |  |  |  |  |
Cost of revenue |  | $ | 628 |  |  | $ | 638 |
Research and development |  |  | 7,505 |  |  |  | 5,374 |
Selling, general and administrative |  |  | 9,480 |  |  |  | 7,736 |
|  | $ | 17,613 |  |  | $ | 13,748 |
Liability based awards - to be settled in equity |  |  |  |  |  |
Cost of revenue |  | $ | 11 |  |  | $ | 19 |
Research and development |  |  | 526 |  |  |  | 220 |
Selling, general and administrative |  |  | 386 |  |  |  | 293 |
|  | $ | 923 |  |  | $ | 532 |
Total stock-based compensation - equity and liability based |  | $ | 18,536 |  |  | $ | 14,280 |
Stock-based compensation expense recorded to additional paid-in capital |  |  |  |  |  |
Equity based awards |  | $ | 17,613 |  |  | $ | 13,748 |
Liability based awards - settled in equity |  |  | 1,523 |  |  |  | 1,489 |
Total stock-based compensation expense recorded to additional paid-in capital |  | $ | 19,136 |  |  | $ | 15,237 |
The following table presents the unrecognized compensation costs and related weighted average period of recognition as of March 31, 2023:
|  | As of |
|  | March 31, 2023 |
|  | Unrecognized Compensation Costs (in millions) |  |  | Weighted Average Period of Recognition (in years) |
RSUs |  | $ | 141.3 |  |  |  | 2.2 |
PRSUs |  | $ | 13.7 |  |  |  | 1.6 |
MYPSUs |  | $ | 16.9 |  |  |  | 1.5 |
Liability-based awards |  | $ | 2.0 |  |  |  | 0.6 |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI https://asc.fasb.org/topic&trid=2208762 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 6 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008 + Details
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