Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

(11) Stock-Based Compensation

2015 Incentive Plan

The Company is authorized to grant shares of restricted stock, restricted stock units (“RSUs”), stock appreciation rights, cash incentive awards and options to purchase shares of Common Stock to employees and non-employee directors pursuant to its 2015 Incentive Plan (the “2015 Plan”). The 2015 Plan also designates measures that may be used for performance awards and market-based awards. The vesting period for awards granted under the 2015 Plan is generally determined by the Board of Directors at the date of the grant. Generally, the awards vest one third each year, over 3 years.

Systemic Bio Phantom Unit Plan

During the year ended December 31, 2023, we began granting phantom unit awards ("Phantom Units") under a new compensation plan designed for employees and non-employees performing services for Systemic Bio, a wholly-owned subsidiary of 3D Systems Corporation. All awards granted under the plan are subsidiary-level awards. During the three months ended March 31, 2024, we granted 88 Phantom Units under the Systemic Bio Phantom Unit Plan and recognized $67 of expense related to all granted awards. No compensation expense was recognized for the three months ended March 31, 2023, as no Phantom Units had been issued as of such date.

Other Compensation Arrangements that Include Share Settlement

Regenerative Medicine Earnout Payments and Performance-Based Stock Units

Volumetric Acquisition Earnout Payments

On December 1, 2021, the Company acquired Volumetric Biotechnologies, Inc. (“Volumetric”). Pursuant to the terms of the related acquisition agreement, the Company was potentially subject to aggregate earnout payments of up to $355,000 (i.e., incremental to the previously paid acquisition purchase price). These earnout payments would be triggered by (1) the achievement of seven discrete non-financial milestones, each of which required attainment prior to either December 31, 2030 or December 31, 2035, and (2) the continued employment of certain key individuals from Volumetric. Each potential milestone-based payment was deemed to be compensation expense that the Company would recognize ratably from the point in time when a milestone was deemed probable of achievement through the estimated time of achievement. Each milestone payment, if earned, would be expected to be settled approximately half in cash and half in shares of the Company’s Common Stock and, accordingly, expense recognized for the portion of this earnout that is expected to be settled with the Company’s Common Stock would be reflected in the disclosure of stock-based compensation included herein, if and when accrued.

In February 2024, the Company informed the former owners of Volumetric, to whom the acquisition-related earnout payments of up to $355,000 could have potentially become payable, that four of the seven milestone-related earnout payments, each of which was related to kidney and liver research, were terminated. These four milestone-based earnout payments were terminated in accordance with the terms of the Volumetric merger agreement, based upon a determination that achievement was no longer financially viable due to the loss of the funding required from the Company's key strategic partner for the related research and development efforts. Upon termination of the four milestone-based earnout payments, the Company's maximum liability for earnout payments attributable to the 2021 acquisition of Volumetric was reduced to $175,000, which would be payable if (1) each of the three remaining non-financial, science-based milestones is achieved within the timeframes set forth in the Volumetric acquisition agreement and (2) the certain key individuals from Volumetric continue to be employed. Refer to Note 19 for details regarding the resignation of the certain key individuals from Volumetric subsequent to March 31, 2024, the resulting cancellation of the remaining three milestone-based earnout payments subsequent to March 31, 2024, and all related actions occurring thereafter.

Regenerative Medicine Performance-Based Stock Units

The Company has granted certain performance-based stock units (“PSUs” or "the RegMed Awards") with vesting terms that are based upon four individually-measured, science-based (i.e., non-financial) milestones to other employees who work on advancements in regenerative medicine related to lungs and tissue organs. The compensation expense associated with each individual milestone attributable to a RegMed Award is required to be recognized over the period commencing on the date that the respective milestone is deemed probable of being met through the anticipated date of achievement.

Earnout and PSU Compensation Expense

During the three months ended March 31, 2023, the Company recognized $2,267 of compensation expense based upon the assumed achievement of (1) one of the Volumetric milestones for which the potential earnout payment due to the sellers would be $65,000 and (2) one RegMed Award milestone for which the aggregate grant date fair value of the outstanding and unvested awards was $4,679. During the three months ended September 30, 2023, the Company decided to reduce its budgeted funding for the research and development related to the respective Volumetric earnout and RegMed Award milestones, which resulted in (A) the Company concluding that it was no longer probable that these milestones would be achieved by the end of the term of the Volumetric earnout arrangement or prior to the expiration of the RegMed Awards and (B) the reversal of all previously recognized Volumetric earnout and RegMed Award compensation expense. As a result, the liability recognized related to these awards was $0 as of December 31, 2023. As of March 31, 2024, none of the remaining three Volumetric milestones or the four RegMed Award milestones were deemed probable of being achieved. Accordingly, the Company recognized $0 of compensation expense related to the Volumetric earnout and RegMed Awards during the three months ended March 31, 2024, and no liability related to the Volumetric earnout was recognized on our balance sheets as of March 31, 2024 and December 31, 2023.

dp polar Earnout

In connection with the Company's October 4, 2022 acquisition of dp polar GmbH ("dp polar"), the Company may be required to pay $2,229 incremental to the acquisition purchase price and contingent upon certain service conditions of a key individual from dp polar through December 31, 2024, which amount will be settled via the issuance of 250 shares of the Company’s Common Stock. The Company includes the compensation expense related to this arrangement within stock-based compensation reported herein. Refer to Note 19 for additional changes to the grant subsequent March 31, 2024.

Stock-Based Compensation Activity and Expense

During the three months ended March 31, 2024, the Company granted 60 shares of restricted stock which had a weighted-average grant date fair value of $5.75 per share. The restricted stock awards generally vest ratably over three years.

The following table shows the stock-based compensation expense recognized during the three months ended March 31, 2024 and 2023:


	Three Months Ended
(in thousands)	March 31, 2024		March 31, 2023
Stock-based compensation expense	$	8,252	$	10,292

Included in stock-based compensation expense recognized for the three months ended March 31, 2024 and 2023 are $1,594 and $658, respectively, of accrued expense pertaining to annual incentive compensation for which settlement would ultimately occur using shares of the Company’s Common Stock. Also included in stock-based compensation expense for the three months ended March 31, 2024 and 2023 are $0 and $2,267, respectively, which relate to the RegMed Awards and the portion of the recognized Volumetric earnout expense expected to be settled using the Company’s Common Stock. Finally, stock-based compensation expense for the three months ended March 31, 2024 and 2023 includes $243 and $274, respectively, of expense related to the dp polar earnout arrangement that is required to be settled in shares of the Company's Common Stock.

As of March 31, 2024, there was $34,001 of unrecognized stock-based compensation expense related to all unvested share-based payment awards that the Company expects to recognize over a weighted-average period of 1.8 years.