Stock-based compensation is recorded in the consolidated statements of operations as follows (in thousands):


	For the Years Ended December 31,
	2024		2023
Cost of goods sold	$	311	$	107
Research and development		1,379		1,062
Sales and marketing		379		373
General and administrative		2,566		2,139
Total stock-based compensation expense	$	4,635	$	3,681

The vesting period for stock options granted to employees is generally one to four years. All stock options granted under the 2016 Plan have a maximum contractual term of ten years.

Commencing in 2019, each non-employee member of the board of directors will receive an annual award on the first trading day in February a number of stock options having a value of $30,000 (with the award to the chairperson of the board of directors having a value of $45,000), (calculated as of the date of grant in accordance with the Black-Scholes option pricing model).

The grant-date fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. The weighted average assumptions for grants during the years ended December 31, 2024 and 2023 are provided in the following table:


	For the Years Ended December 31,
	2024			2023
Expected dividend yield		0	%		0	%
Expected volatility		68.7	%		61.0	%
Expected term (years)		4.1			4.3
Risk-free interest rate		4.2	%		4.0	%

A summary of the Company’s stock option activity is as follows (shares in thousands):


				Weighted Average
	Number of stock options			Exercise price		Remaining contractual term (years)		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2023		2,104		$	10.20		6.2	$	329
Granted		425		$	5.23
Exercised		(26	)	$	4.98			$	18
Expired/Forfeited		(127	)	$	14.95
Balance at December 31, 2024		2,376		$	9.12		5.9	$	2,357

Vested and exercisable at December 31, 2024		1,677		$	10.60		4.7	$	1,049
Vested and expected to vest at December 31, 2024		2,376		$	9.12		5.9	$	2,357

During the years ended December 31, 2024 and 2023, the Company received proceeds of $127,000 and $28,000 respectively from the exercise of options.

The weighted average grant-date fair values of options granted during the years ended December 31, 2024 and 2023 were $2.90 and $2.53 per share, respectively. The grant-date fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. The grant date fair value of shares vested during the years ended December 31, 2024 and 2023 was $1.4 million and $1.9 million, respectively. For stock options vested and expected to vest, the aggregate intrinsic value as of December 31, 2024 and 2023 was $2.4 million and $0.3 million, respectively.

At December 31, 2024, there was $1.6 million of unrecognized compensation cost related to unvested stock options granted under the Company’s equity plans that is expected to be recognized over the next 2.1 years.

The following table summarizes the Company’s restricted stock unit activity (shares in thousands):


	Restricted stock units			Weighted average grant date fair value
Balance at December 31, 2023		706		$	6.97
Grants		507		$	5.30
Vested and released		(253	)	$	7.41
Forfeited		(125	)	$	6.09
Balance at December 31, 2024		835		$	5.95

Commencing in 2019, each non-employee member of the board of directors receives, on the first trading day in February of each year, such number of restricted stock units as is determined by dividing $30,000 (with the award to the chairperson of the board of directors having a value of $45,000) by the 30 trade days trailing average share price.

During the year ended December 31, 2024, 54,500 restricted stock units with an average fair value of $4.45 per share were granted to the members of the Company’s board of directors of which fully vest on the one year anniversary of the grant date. Employees and consultants were granted 429,300 restricted stock units with an average fair value of $5.50 per share, which vest on grant date or vest equally after each of the annual anniversaries over a four year period. During the year ended December 31, 2023, 28,000 restricted stock units with a fair value of $8.00 per share were granted to members of the Company’s board of directors of which fully vest on the first anniversary of the grant date, and 698,200 restricted stock units with a fair value of $4.82 per share were issued to employees which vest equally after each of the annual anniversaries over a four-year period.

As of December 31, 2024, there was $3.0 million of total unrecognized stock-based compensation expense related to non-vested restricted stock units which is expected to be recognized over a remaining weighted-average vesting period of 2.3 years.

The Company currently uses authorized and unissued shares to satisfy share award exercises.

The following table summarizes the Company's PSU activity during the period indicated (shares in thousands):


	Performance stock units		Weighted average grant date fair value
Balance at December 31, 2023		110	$	1.79
Grants		—	$	—
Vested and released		—	$	—
Forfeited		—	$	—
Balance at December 31, 2024		110	$	1.79

Service as well as market and performance conditions determine the number of PSUs that the holder will earn from 0% to 150% of the target number of shares. The percentage received is based on the Company common stock price targets over a three-year service period. Additionally, the Company must achieve or exceed 75% of the year to date revenue target measured at the end of the quarter in which the price target is achieved. The market conditions have not currently been met. As of December 31, 2024, there was $4,000 of total unrecognized compensation cost related to unvested PSUs having a weighted average remaining contractual term of 0.3 years.

We estimate the fair value of PSUs with a market condition using a Monte Carlo simulation model as of the date of grant to forecast performance achievement of market price. Key inputs in the valuation include cost of equity, market price volatility and discount rate.

Share-settled compensation to the Board of Directors and consultants were incurred and recognized as stock-based compensation expense and recorded in accrued expense. Within ninety days after the calendar year-end, the liabilities are settled in RSU grants and vest on the grant date. The share-settled obligations were $0.8 million and $0.1 million as of December 31, 2024 and 2023, respectively.

The Company maintains the 2016 Employee Stock Purchase Plan (ESPP) that provides employees an opportunity to purchase common stock through payroll deductions. The ESPP is implemented through consecutive 6-month offering periods commencing on March 1 and September 1 of each year. The purchase price is set at 85% of the fair market value of the Company's common stock on either the first or last trading day of the offering period, whichever is lower. Annual contributions are limited to the lower of 20% of an employee's eligible compensation or such other limits as apply under Section 423 of the Internal Revenue Code. The ESPP is intended to qualify as an employee stock purchase plan for purposes of Section 423 of the Internal Revenue Code.

Based on the 15% discount and the fair value of the option feature of the ESPP, it is considered compensatory. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. The Company currently uses authorized and unissued shares to satisfy share award exercises.

During the year ended December 31, 2024, the Company received $0.2 million from the issuance of 45,809 shares and during the year ended December 31, 2023, the Company received $0.2 million from the issuance of 38,401 shares under the ESPP.