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STOCK-BASED COMPENSATION | 3 Months Ended
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Mar. 31, 2024
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 (the "CHCC") of the Board of Directors, to make grants of restricted stock and restricted stock unit awards to employees, consultants, and directors. Stockholders have subsequently approved amendments to the 2017 Plan increasing the shares available to grant thereunder, including most recently at the Company's annual meeting of stockholders held on June 1, 2023, when stockholders approved an amendment to the 2017 Plan to increase the aggregate number of shares of common stock available thereunder for the granting of awards by an additional 4.8 million shares. As of March 31, 2024, the Company had 2.5 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. The number of shares, terms, and vesting periods are generally determined by the Company’s Board of Directors or the CHCC on an award-by-award basis. RSUs granted to employees generally vest either ratably over three or four years or as 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 performance-based RSUs ("PSUs") awarded to certain employees may be increased or 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 on August 13, 2027. The performance and market conditions associated with PSU awards granted during the three months ended March 31, 2024 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 the relative total stockholder return metric is January 1, 2024 through December 31, 2026, and the revenue and adjusted earnings per share metrics will be measured based on fiscal year 2026 results. The Company estimates the likelihood of achievement of performance conditions for all PSU awards at the end of each period. To the extent those awards or portions thereof are considered probable of being achieved, such awards or portions thereof are expensed over the performance 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. Stock Options A summary of the stock option activity for the three months ended March 31, 2024 is as follows:
(number of shares in millions) | Number of Shares |  | Weighted Average Exercise Price
Options outstanding at December 31, 2023 | 0.7 |  |  | $ | 13.38 |
Options outstanding at March 31, 2024 | 0.7 |  |  | 13.38 |
Options exercisable at March 31, 2024 | 0.5 |  |  | $ | 13.38 |
As of March 31, 2024, there was $0.3 million of total unrecognized stock-based compensation expense related to stock options that will be recognized over a weighted-average period of 0.4 years. There were no options granted during the three months ended March 31, 2024. Restricted Stock Units A summary of the RSU awards activity under the Company’s equity plan and inducement awards, including PSU awards, for the three months ended March 31, 2024 is as follows:
(number of shares in millions) | Number of Shares |  | Weighted Average Grant Date Fair Value
RSUs unvested and outstanding at December 31, 2023 | 4.4 |  |  | $ | 24.37 |
RSUs granted | 2.3 |  |  | 22.29 |
Less: |  |  |
RSUs vested | (1.0) |  |  | 25.18 |
RSUs canceled | (0.1) |  |  | 26.55 |
RSUs unvested and outstanding at March 31, 2024 | 5.6 |  |  | $ | 23.36 |
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. The first offering period of 2024 started on December 1, 2023 and will end on May 31, 2024. The second offering period of 2024 will begin on June 1, 2024 and will end on November 30, 2024. As of March 31, 2024, 1.3 million shares of common stock were available for issuance under the Amended and Restated 2012 Purchase Plan. Shares purchased under, and compensation expense associated with, the Amended and Restated 2012 Purchase Plan for the three months ended March 31, 2024 and 2023 are as follows:
| Three months ended March 31, |
(in millions) | 2024 |  | 2023 |  |  |  |
Shares purchased under the plan | — |  |  | — |  |  |  |  |
Plan compensation expense | $ | 0.5 |  |  | $ | 0.5 |  |  |  |  |
Stock-Based Compensation Expense Stock-based compensation expense recognized and included in the Condensed Consolidated Statements of Operations and Comprehensive Loss was allocated as follows:
| Three months ended March 31, |  |
(in millions) | 2024 |  |  | 2023 |  |  |  |  |
Cost of testing revenue | $ | 0.3 |  |  |  | $ | 0.3 |  |  |  |  |  |
Research and development expense | 1.2 |  |  |  | 0.6 |  |  |  |  |  |
Selling, general, and administrative expense | 10.5 |  |  |  | 6.6 |  |  |  |  |  |
Total stock-based compensation expense | $ | 12.0 |  |  |  | $ | 7.5 |  |  |  |  |  |
As of March 31, 2024, there was $104.2 million of total unrecognized stock-based compensation expense related to RSUs that is expected to be recognized over a weighted-average period of 2.5 years. The Company recognizes forfeitures as they occur. In the event that a PSU is determined to be improbable of vesting, the Company records an adjustment to reverse all previously recognized expense associated with the equity award in the current period.

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