The Company’s share-based compensation awards are issued under the 2020 Equity Incentive Plan (2020 Plan), the predecessor 2016 Equity Incentive Plan (2016 Plan) and 2006 Equity Incentive Plan (2006 Plan). Any awards that expire or are forfeited under the 2016 Plan or 2006 Plan become available for issuance under the 2020 Plan. As of September 30, 2023, 772,663 shares of common stock remained available for future issuance under the 2020 Plan.

On June 23, 2023, the Company commenced a voluntary offer to exchange certain eligible options held by eligible employees of the Company for new options (the Exchange Offer). The Exchange Offer expired on July 24, 2023. Pursuant to the Exchange Offer, 83 eligible holders elected to exchange, and the Company accepted for cancellation, eligible options to purchase an aggregate of 757,595 shares of the Company’s common stock, representing approximately 99% of the total shares of common stock underlying the eligible options. On July 24, 2023, immediately following the expiration of the Exchange Offer, the Company granted new options to purchase 156,868 shares of common stock, pursuant to the terms of the Exchange Offer and the Company’s 2020 Equity Incentive Plan. The exercise price of the new options granted pursuant to the Exchange Offer was $1.20 per share, which was the closing price of the common stock on the Nasdaq Global Market on the grant date of the new options. Each new option granted in exchange for the vested shares underlying an eligible option will fully vest on the first day of the month following the first anniversary of the month in which the Exchange Offer is completed. Each new option granted in exchange for the unvested shares underlying an eligible option will vest under an extended vesting schedule, with vesting commencing on the first day of the month following the first anniversary of the month in which the Exchange Offer is completed, and occurring in a series of equal monthly installments over the number of months that were remaining in the surrendered eligible option’s vesting schedule immediately prior to the Exchange Offer. Each new option has a maximum term of ten years.

The exchange of stock options was treated as a modification for accounting purposes. The incremental expense was immaterial for the new options and was calculated using the Black-Scholes option pricing model. The incremental expense and the unamortized expense remaining on the exchanged options as of the modification date will be recognized over the new vesting schedule.

Share-based compensation expense reported in the Company’s condensed statements of operations was (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Direct costs and expenses	$	17	$	20	$	41	$	48
Research and development		68		30		249		310
Sales, marketing, general and administrative		869		1,120		4,002		3,526
Total	$	954	$	1,170	$	4,292	$	3,884

The unrecognized remaining share-based compensation expense for options and RSUs was approximately $6.6 million as of September 30, 2023 and is expected to be amortized to expense over the next 2.7 years.

Stock option activity during the nine months ended September 30, 2023, excluding the Bonus Option Program described below, was (in thousands, except weighted average exercise price and weighted average contractual life):


	Number of Options			Weighted Average Exercise Price		Weighted Average Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding - January 1, 2023		2,541		$	8.40		7.4	$	1,489
Granted		427			1.85		—		—
Forfeited/canceled		(313	)		8.88		—		—
Exercised		(122	)		0.74		—		—
Cancelled under the Option Exchange		(589	)		20.43		—		—
Granted under the Option Exchange		123			1.20		—		—
Outstanding ‑ September 30, 2023		2,067		$	3.57		7.2	$	772
Exercisable ‑ September 30, 2023		1,256		$	4.36		6.1	$	600

Restricted stock unit activity during the nine months ended September 30, 2023 was (in thousands, except weighted average grant date fair value per share):


	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Outstanding ‑ January 1, 2023		1,211		$	2.36
Granted		2,474			1.92
Forfeited/canceled		(228	)		2.57
Released		(688	)		2.44
Outstanding ‑ September 30, 2023		2,769		$	1.93

As part of the Bonus-to-Options Program (Bonus Option Program), the Company recorded the following activity during the nine months ended September 30, 2023 (in thousands, excepted weighted average exercise price and weighted average contractual life):


	Number of Options			Weighted Average Exercise Price		Weighted Average Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding ‑ January 1, 2023		526		$	10.69		7.6	$	2
Granted		876			2.00		—		—
Forfeited/canceled		(72	)		8.88		—		—
Exercised		—			—		—		—
Cancelled under the Option Exchange		(169	)		20.67		—		—
Granted under the Option Exchange		34			1.20		—		—
Outstanding ‑ September 30, 2023		1,195		$	2.75		8.7	$	15
Exercisable ‑ September 30, 2023		1,161		$	2.76		8.6	$	—

The Company recorded an insignificant amount and $0.2 million for the three and nine months ended September 30, 2023, respectively, compared to an insignificant amount and $0.7 million for the three and nine months ended September 30, 2022, respectively, related to the estimate of the Bonus Option Program. Options granted, if any, pertaining to the performance of the Bonus Option Program are typically approved and granted in first quarter of the year following completion of the fiscal year.

The ESPP provides for successive six-month offering periods beginning on September 1st and March 1st of each year. During the nine months ended September 30, 2023, 437,135 shares were issued under the ESPP leaving 309,012 shares reserved for future issuance.