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Stock-Benefit Plans and Equity Transactions | 3 Months Ended
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Mar. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Benefit Plans and Equity Transactions | 9. Stock-Benefit Plans and Equity Transactions Stock-Based Compensation The Company has stock-based compensation plans under which it grants stock options, restricted stock units ("RSUs"), and performance restricted stock units ("PRSUs") to officers, directors and third parties. Total stock-based compensation for the periods presented are as follows (in thousands):
|  | Three Months Ended |
|  | March 31, |
|  | 2023 |  |  | 2022 |
Cost of sales |  | $ | 6,006 |  |  | $ | 256 |
Research and development |  |  | 1,317 |  |  |  | 972 |
Sales, general and administrative |  |  | 9,139 |  |  |  | 8,956 |
Total |  | $ | 16,462 |  |  | $ | 10,184 |
As of March 31, 2023, there was $35.1 million of unrecognized compensation expense for RSUs and PRSUs to be recognized over a weighted average period of 1.38 years. Restricted Stock Units and Performance Based Restricted Stock Units Awards The Company issued approximately 1,967,000 and 1,225,000 shares of common stock, before net share settlement, upon vesting of RSUs and PRSUs during the three months ended March 31, 2023 and 2022, respectively. Employee Stock Purchase Plan Employees are eligible to participate in the Employee Stock Purchase Plan ("ESPP") approved by its shareholders. During the three months ended March 31, 2023 and 2022, there were no shares issued under the ESPP. The Company estimates the fair value of shares issued to employees under the ESPP using the Black-Scholes option-pricing model. The assumptions used to estimate the fair value of stock options granted and stock purchase rights under the ESPP are as follows:
|  | Three Months Ended |
|  | March 31, |
|  | 2023 |  |  | 2022 |
Risk-free interest rate |  |  | 4.54 | % |  |  | 0.07 | %
Expected dividend yield |  |  | — |  |  |  | — |
Expected term (years) |  |  | 0.60 |  |  |  | 0.50 |
Volatility |  |  | 62.77 | % |  |  | 50.29 | %
Warrants Outstanding 2018 PIPE Warrants The 2018 common stock warrants (the “2018 PIPE Warrants”) have a five-year life and are exercisable by cash or cashless exercise. During the three months ended March 31, 2023 and 2022, there were approximately 5,681,000 and 126,000 2018 PIPE Warrant exercises, respectively, for total cash proceeds of $0.4 million in both periods presented. As of March 31, 2023, approximately 630,000 2018 PIPE Warrants remained outstanding. SafeOp Surgical Merger Warrants The SafeOp common stock warrants (the “SafeOp Warrants”), have a five-year life and are exercisable by cash or cashless exercise. During the three months ended March 31, 2023, there were 159,000 cashless SafeOp Warrant exercises. There were no exercises during the three months ended March 31, 2022. As of March 31, 2023, approximately 778,000 SafeOp Warrants remained outstanding. Squadron Medical Warrants In connection with debt financing entered into with Squadron Medical in 2018, and amended in 2019 and 2020, the Company issued common stock warrants to Squadron Medical and a participant lender (the “Squadron Medical Warrants”). The Squadron Medical Warrants expire in May 2027 and are exercisable by cash exercise. No Squadron Medical Warrants have been exercised as of March 31, 2023. Executive Warrants The Company issued warrants to Mr. Patrick S. Miles, the Company’s Chairman and Chief Executive Officer (the “Executive Warrants”). The Executive Warrants had a five-year term and are exercisable by cash or cashless exercise. In October 2022, the term was extended to seven years. No Executive Warrants have been exercised as of March 31, 2023. A summary of all outstanding warrants for common stock as of March 31, 2023, are as follows (in thousands, except for strike price data):
|  | Number of Warrants |  |  | Strike Price |  | Expiration
2018 PIPE Warrants |  |  | 630 |  |  | $ | 3.50 |  | May 2023
SafeOp Surgical Merger Warrants |  |  | 778 |  |  | $ | 3.50 |  | May 2023
2018 Squadron Medical Warrants |  |  | 845 |  |  | $ | 3.15 |  | May 2027
2019 Squadron Medical Warrants |  |  | 4,839 |  |  | $ | 2.17 |  | May 2027
2020 Squadron Medical Warrants |  |  | 1,076 |  |  | $ | 4.88 |  | May 2027
Executive Warrants |  |  | 1,327 |  |  | $ | 5.00 |  | December 2024
Other(1) |  |  | 159 |  |  | $ | 7.20 |  | Various through February 2026
Total |  |  | 9,654 |  |  |  |  |
(1) Weighted-average strike price. All outstanding warrants were deemed to qualify for equity classification under authoritative accounting guidance.

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