Share-based compensation expense is recognized in cost of services, product and technology expense, and selling, general, and administrative expense, in the accompanying condensed consolidated statements of operations and comprehensive income as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Share-based compensation expense
Cost of services	$	275	$	274
Product and technology expense		457		204
Selling, general, and administrative expense		1,326		1,381
Total share-based compensation expense	$	2,058	$	1,859

Prior to the Company’s Initial Public Offering (“IPO”), all share-based awards were issued by Fastball Holdco, L.P., the Company’s previous parent company, under individual grant agreements and the partnership agreement of such parent company (collectively the “2020 Equity Plan”). Awards issued under the 2020 Equity Plan consist of options. No awards were issued under the plan during the period from January 1, 2023 through March 31, 2023.

A summary of the option and profits interests activity for the three months ended March 31, 2023 is as follows


		Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
December 31, 2022	Grants outstanding		2,843,342		$	6.66
	Grants exercised		(85,760	)	$	6.68
	Grants cancelled/forfeited		(250,856	)	$	6.69
March 31, 2023	Grants outstanding		2,506,726		$	6.66	6.8 Years	$18.3 million
March 31, 2023	Grants vested		806,379		$	6.64	6.6 Years	$5.9 million
March 31, 2023	Grants unvested		1,700,347		$	6.67

The 2021 Equity Plan is intended to provide a means through which to attract and retain key personnel and to provide a means whereby our directors, officers, employees, consultants, and advisors can acquire and maintain an equity interest in us, or be paid incentive compensation, including incentive compensation measured by reference to the value of our common stock, thereby strengthening their commitment to our welfare and aligning their interests with those of our stockholders. The 2021 Equity Plan provides for the grant of awards of stock options, stock appreciation rights, restricted shares, restricted stock units, and other equity-based or cash-based awards as determined by the Company’s Compensation Committee. The 2021 Equity Plan initially had a total of 17,525,000 shares of common stock reserved. The number of reserved shares automatically increases on the first day of each calendar year commencing on January 1, 2022 and ending on January 1, 2030, in an amount equal to the lesser of (x) 2.5% of the total number of shares of common stock outstanding on the last day of the immediately preceding calendar year and (y) a number of shares as determined by the Board of Directors. As of March 31, 2023, 17,204,287 shares were available for issuance under the 2021 Equity Plan.

A summary of the option activity for the three months ended March 31, 2023 is as follows:


		Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
December 31, 2022	Grants outstanding		4,311,662	$	15.24
	Grants issued		71,099	$	13.70
March 31, 2023	Grants outstanding		4,382,761	$	15.21	8.4 Years	$0.0 million
March 31, 2023	Grants vested		1,392,123	$	15.16	8.3 Years		—
March 31, 2023	Grants unvested		2,990,638	$	15.23

The fair value for stock options granted for the three months ended March 31, 2023 was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:


	Options
Expected stock price volatility		35.48	%
Risk-free interest rate		4.22	%
Expected term (in years)		6.25
Fair-value of the underlying unit	$	13.70

A summary of the restricted stock units (“RSU”) activity for the three months ended March 31, 2023 is as follows:


		Shares			Weighted Average Grant Date Fair Value
December 31, 2022	Nonvested RSUs		472,332		$	16.00
	Granted		21,202		$	13.70
	Vested		(5,077	)	$	16.33
March 31, 2023	Nonvested RSUs		488,457		$	15.90

A summary of the restricted stock activity for the three months ended March 31, 2023 is as follows:


		Shares			Weighted Average Grant Date Fair Value
December 31, 2022	Nonvested restricted stock		2,281,300		$	3.85
	Vested		(326,670	)	$	3.85
March 31, 2023	Nonvested restricted stock		1,954,630		$	3.85

As of March 31, 2023, the Company had approximately $33.2 million of unrecognized pre-tax non-cash compensation expense, comprised of approximately $7.3 million related to restricted stock, $6.1 million related to RSUs, and approximately $19.8 million related to stock options, which the Company expects to recognize over a weighted average period of 2.7 years.

The Company adopted the First Advantage Corporation 2021 Employee Stock Purchase Plan (“ESPP”) that allows eligible employees to voluntarily make after-tax contributions of up to 15% of such employee’s cash compensation to acquire Company stock during designated offering periods. During each offering period, there is one six-month purchase period. During the holding period, ESPP purchased shares are not eligible for sale or broker transfer. The Company recorded an associated expense of approximately $0.2 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively.