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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
2015 Equity Incentive Plan
As of September 30, 2023, approximately 12.9 million shares were available for future grants under the 2015 Plan.
Stock-Based Compensation
The following table presents stock-based compensation included in the condensed consolidated statements of operations (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
(Unaudited) (Unaudited)
Stock-based compensation expense:   
Stock options$3,408 $3,790 $10,496 $9,554 
RSUs11,041 6,840 25,893 21,275 
$14,449 $10,630 $36,389 $30,829 
Stock-based compensation expense in operating expenses:
Research and development$5,218 $3,915 $12,725 $10,116 
Selling, general and administrative9,231 6,715 23,664 20,713 
$14,449 $10,630 $36,389 $30,829 
Stock Options
The following table summarizes stock option activity and related information for the nine months ended September 30, 2023:
 
Number of
Options
Weighted-
Average
Exercise
Price
Aggregate
Intrinsic
Value
(in thousands)
Weighted-
Average
Remaining
Contractual
Life
(in years)
Outstanding at December 31, 2022
9,262,926 $9.87 $4,848 7.2
Granted949,578 $2.99 
Exercised(183,236)$1.60 
Forfeited/expired(167,592)$5.48 
Outstanding at September 30, 2023
9,861,676 $9.44 $105 6.9
Vested and exercisable at September 30, 2023
5,877,381 $11.53 $105 5.6
As of September 30, 2023, the unrecognized compensation cost related to outstanding stock options was $11.9 million, which is expected to be recognized over a remaining weighted-average period of 1.2 years.
The total intrinsic value of stock options exercised during the nine months ended September 30, 2023 was $0.3 million. Cash proceeds received from stock option exercises during the nine months ended September 30, 2023 and 2022 totaled $0.3 million and $0.1 million, respectively.
As of December 31, 2022, a total of 3,445,499 vested and exercisable shares were outstanding.
Restricted Stock Units
The following table summarizes RSU activity during the nine months ended September 30, 2023:
Number of
Units
Weighted-
Average
Grant Date
Fair Value
Nonvested balance at December 31, 2022
6,551,388 $18.27 
Granted6,277,569 $1.66 
Vested(3,490,089)$3.65 
Forfeited/canceled(735,052)$8.34 
Nonvested balance at September 30, 2023
8,603,816 $12.94 
As of September 30, 2023, there was $48.2 million of unrecognized stock-based compensation expense related to RSUs that is expected to be recognized over a weighted-average period of 2.1 years. The total intrinsic value of RSUs vested during the nine months ended September 30, 2023 was $6.0 million.
Effective as of August 25, 2023, the Compensation Committee of the Board of Directors granted 5,727,159 RSUs to eligible employees of the company, with the intention of retaining such employees (the “retention award”). The retention award vests according to the following schedule: ½ (one-half) was to vest and vested on September 1, 2023 and ½ (one-half) will vest on January 31, 2024, subject to the recipients continuing to be a “service provider” as defined in the 2015 Plan through each applicable vesting date. With respect to RSUs granted, compensation cost was measured using the grant date fair value of $1.65 per share, the closing price of the company’s common stock on August 25, 2023.
RSUs awarded to employees and consultants of affiliated companies are accounted for as stock-based compensation in accordance with ASU 2018-07, Compensation—Stock Compensation (Topic 718), as the compensation was in exchange for continued support or services expected to be provided to the company over the vesting periods under the NantWorks shared services agreement discussed in Note 10, Related-Party Agreements. We have evaluated the associated benefit of these awards to the affiliated companies under common control and determined that the benefit is limited to the retention of their employees. We estimated such benefit at the grant date fair value of $4.0 million on March 4, 2021 and recorded $0.3 million of deemed dividends during the nine months ended September 30, 2023 and 2022 in additional paid-in capital, on the condensed consolidated balance sheets, with a corresponding credit to stock-based compensation expense.
Related-Party Warrants
In connection with the March 2021 merger between NantKwest and NantCell, warrants issued to NantWorks, a related party, in connection with NantCell’s acquisition of Altor were assumed by the company. A total of 1,638,000 warrants with an exercise price of $3.24 per share were outstanding as of September 30, 2023. The fair value of $18.0 million assigned to the warrants will be recognized in equity upon achievement of a performance-based vesting condition pertaining to building manufacturing capacity to support supply requirements for one of our product candidates.