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


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Cost of goods sold	$	39	$	65	$	112	$	123
Research and development		161		400		431		728
Sales and marketing		88		75		161		155
General and administrative		315		667		806		1,247
Total stock-based compensation expense	$	603	$	1,207	$	1,510	$	2,253

The following table summarizes the outstanding stock option activity during the period indicated (shares in thousands):


				Weighted average
	Number of stock options			Exercise price		Remaining contractual term (in years)		Aggregate intrinsic value (in thousands)
Balance at December 31, 2024		2,376		$	9.12		5.9	$	2,357
Granted		309		$	4.56
Exercised		(111	)	$	1.66			$	236
Expired/Forfeited		(21	)	$	11.57
Balance at June 30, 2025		2,553		$	8.87		6.1	$	227

Vested and exercisable at June 30, 2025		1,815		$	10.41		5.0	$	111
Vested and expected to vest at June 30, 2025		2,553		$	8.87		6.1	$	227

The weighted average grant date fair value of options granted during the six months ended June 30, 2025 was $2.50. The grant-date fair value of each option award is estimated on the date of grant, using the Black-Scholes-Merton option-pricing model.

As of June 30, 2025, there was $1.8 million of unrecognized stock-based compensation costs related to unvested stock options granted under the Company’s equity plans are expected to be recognized over the next 2.5 years.

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


	Restricted stock units			Weighted average grant date fair value
Balance at December 31, 2024		835		$	5.95
Grants		342		$	4.53
Vested and released		(282	)	$	6.37
Forfeited		(53	)	$	5.41
Balance at June 30, 2025		842		$	5.27

As of June 30, 2025, there was $3.1 million of unrecognized stock-based compensation costs related to non-vested RSUs, which is expected to be recognized over a remaining weighted-average vesting period of 2.4 years.

The following table summarizes the Company’s performance stock unit (PSU) activity during the period indicated (shares in thousands):


	Performance stock units			Weighted average grant date fair value
Balance at December 31, 2024		110		$	1.79
Grants		—		$	—
Vested and released		—		$	—
Forfeited		(110	)	$	1.79
Balance at June 30, 2025		—		$	—

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. 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. As of June 30, 2025, there were no PSU grants outstanding.

Share-settled compensation to non-employees 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 $20,000 and $0.8 million as of June 30, 2025 and December 31, 2024, 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 three months ended June 30, 2025, the Company did not issue shares under the ESPP. During the six months ended June 30, 2025, the Company received $0.1 million from the issuance of 25,000 shares under the ESPP.