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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION On November 30, 2017, the Company’s stockholders approved the adoption of the 2017 Employee, Director and Consultant Equity Incentive Plan (as amended, the “2017 Plan”). The 2017 Plan allows the Company, under the direction of the Compensation and Human Capital Committee of the Board of Directors, to make grants of restricted and unrestricted stock and stock unit awards to employees, consultants and directors. Stockholders have approved amendments to the 2017 Plan increasing the shares available to grant. As of December 31, 2022, the Company had 1.9 million shares of common stock available for grant under the 2017 Plan. If an RSU awarded under the 2017 Plan is cancelled or forfeited without the issuance of shares of common stock, the unissued or reacquired shares that were subject to the RSU will again be available for issuance pursuant to the 2017 Plan. To the extent that awards outstanding under the Company's prior equity plans expire or are cancelled without delivery of shares of common stock, the shares of common stock underlying these awards also will be available for issuance pursuant to the 2017 Plan. The number of shares, terms, and vesting periods are generally determined by the Company’s Board of Directors or a committee thereof on an award-by-award basis. RSUs granted to employees generally vest either ratably over four years or as a cliff vesting after three years either on the anniversary of the date on which the RSUs were granted or during the month in which such anniversary dates occur. The number of PSUs awarded to certain employees may be increased or may be reduced based on certain additional performance and market metrics. RSUs granted to non-employee directors vest in full upon the earlier of the completion of one year of service following the date of the grant or the date of the next annual meeting of stockholders following such grant. Options granted to the Company's President and Chief Executive Officer as an inducement to his employment expire seven years from the grant date. The performance and market conditions associated with PSU awards granted during the year ended December 31, 2022 include vesting that is based on revenue targets (34% weighting), adjusted earnings per share targets (33% weighting), and relative total stockholder return (33% weighting) measured against the Nasdaq Health Care Index (IXHC) using the 20-trading day averages at the beginning and end of the measurement period. The measurement period for these awards is January 1, 2022 through December 31, 2024. The Company estimates the likelihood of achievement of performance conditions at the end of each period. The portion of the awards pertaining to relative total stockholder return represent market conditions and, accordingly, the estimated fair value of such awards are recognized over the performance period. The Company has also assessed that as of December 31, 2022, the performance conditions for the remaining two performance targets (revenue and adjusted earnings per share) are considered probable of being achieved and, accordingly, these portions of the awards are also being expensed over the performance period. During the transition period ended December 31, 2020, the Company granted stock-based awards to the Company's President and Chief Executive Officer as an inducement material to his commencement of employment and entry into an employment agreement with the Company. The inducement awards are included in the tables presented below. Stock Options A summary of the stock option activity under the Company's equity plans, and inducement awards for the year ended December 31, 2022 is as follows:
(number of shares in millions) | Number of shares |  | Weighted average exercise price |  | Weighted average remaining contractual life (years)
Options outstanding at December 31, 2021 | 1.4 |  |  | $ | 20.38 |  |  |
Less: |  |  |  |  |
Options exercised | — |  |  | 26.22 |  |  |
Options canceled or expired | (0.7) |  |  | 26.99 |  |  |
Options outstanding at December 31, 2022 | 0.7 |  |  | 13.38 |  |  | 4.62
Options exercisable at December 31, 2022 | 0.4 |  |  | 13.38 |  |  | 4.62
Options vested and expected to vest | 0.7 |  |  | $ | 13.38 |  |  | 4.62
There were no options granted during the years ended December 31, 2022 and 2021 and June 30, 2020. During the transition period ended December 31, 2020, 0.7 million options were granted to the Company's President and Chief Executive Officer, with a weighted average grant fair value of $13.38 and as of December 31, 2022, these were the only options outstanding. Restricted Stock Units A summary of the RSU awards activity under the Company's equity plans and inducement awards, including PSU awards for the year ended December 31, 2022, is as follows:
| 2022
(number of shares in millions) | Number of shares |  | Weighted average grant date fair value
RSUs unvested and outstanding at December 31, 2021 | 3.1 |  |  | $ | 24.96 |
RSUs granted | 2.3 |  |  | 25.78 |
Less: |  |  |
RSUs vested | (1.2) |  |  | 25.32 |
RSUs canceled | (0.5) |  |  | 26.83 |
RSUs unvested and outstanding at December 31, 2022 | 3.7 |  |  | $ | 25.08 |
The weighted average grant-date fair value of RSUs granted during the years ended December 31, 2022 and 2021, the transition period ended December 31, 2020, and the fiscal year ended June 30, 2020 was $25.78, $29.83, $13.69 and $27.96, respectively. The fair value of RSUs that vested during the years ended December 31, 2022 and 2021, the transition period ended December 31, 2020, and the fiscal year ended June 30, 2020 was $31.0 million, $22.6 million, $29.1 million and $32.4 million, respectively. Stock-based compensation expense recognized and included in the Consolidated Statements of Operations was allocated as follows:
| Years Ended December 31, |  | Six-month Transition Period Ended December 31, |  | Year Ended June 30,
(in millions) | 2022 |  | 2021 |  | 2020 |  | 2020
Cost of testing revenue | $ | 1.7 |  |  | $ | 1.5 |  |  | $ | 0.6 |  |  | $ | 1.2 |
Cost of other revenue | — |  |  | 0.1 |  |  | 0.1 |  |  | 0.3 |
Research and development expense | 5.2 |  |  | 4.2 |  |  | 2.4 |  |  | 5.0 |
Selling, general, and administrative expense | 31.2 |  |  | 30.5 |  |  | 11.8 |  |  | 18.7 |
Total stock-based compensation expense | $ | 38.1 |  |  | $ | 36.3 |  |  | $ | 14.9 |  |  | $ | 25.2 |
As of December 31, 2022, there was $64.3 million of total unrecognized stock-based compensation expense that will be recognized over a weighted-average period of 2.0 years. The Company recognizes forfeitures as they occur. The aggregate intrinsic value of options outstanding, aggregate intrinsic value of options that are fully vested and aggregate intrinsic value of RSUs vested and expected to vest is as follows:
(in millions) | As of December 31, 2022
Aggregate intrinsic value of options outstanding | $ | 0.8 |
Aggregate intrinsic value of options fully vested | 0.4 |
Aggregate intrinsic value of RSUs outstanding | 54.0 |
The total intrinsic value of options exercised was as follows:
| Years Ended December 31, |  | Six-month Transition Period Ended December 31, |  | Year Ended June 30,
(in millions) | 2022 |  | 2021 |  | 2020 |  | 2020
Total intrinsic value of options exercised | $ | — |  |  | $ | 29.2 |  |  | $ | 0.5 |  |  | $ | 8.8 |
Employee Stock Purchase Plan The Company also has an Employee Stock Purchase Plan that was initially approved by stockholders in 2012 and was amended and approved by the Board of Directors of the Company on September 23, 2021 and the stockholders on June 2, 2022 (the “Amended and Restated 2012 Purchase Plan”), under which 4.0 million shares of common stock were authorized. Shares are issued under the Amended and Restated 2012 Purchase Plan twice yearly at the end of each offering period and the number of shares that may be purchased by any participant during an offering period is limited to 5,000 shares. As of December 31, 2022, 1.7 million shares of common stock were available for issuance under the Amended and Restated Purchase Plan. Shares purchased under, and compensation expense associated with, the Amended and Restated 2012 Purchase Plan for the periods reported are as follows:
| Years Ended December 31, |  | Six-month Transition Period Ended December 31, |  | Year Ended June 30,
(in millions) | 2022 |  | 2021 |  | 2020 |  | 2020
Shares purchased under the plans | 0.3 |  |  | 0.2 |  |  | 0.1 |  |  | 0.3 |
Plan compensation expense | $ | 1.9 |  |  | $ | 1.5 |  |  | $ | 0.6 |  |  | $ | 1.7 |
The fair value of shares issued under the Amended and Restated 2012 Purchase Plan that was in effect for each period reported was calculated using the Black‑Scholes option-pricing model using the weighted-average assumptions below. Each of these inputs is subjective and its determination generally requires significant judgment.
| Years Ended December 31, |  | Six-month Transition Period Ended December 31, |  | Year Ended June 30,
| 2022 |  | 2021 |  | 2020 |  | 2020
Risk-free interest rate | 1.4% |  | 0.1% |  | 0.2% |  | 1.8%
Expected dividend yield | —% |  | —% |  | —% |  | —%
Expected life (in years) | 0.5 |  | 0.5 |  | 0.5 |  | 0.5
Expected volatility | 53% |  | 60% |  | 94% |  | 99%

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