Total estimated stock-based compensation expense for employees and non-employees, related to all of the Company’s stock-based awards, was as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in thousands)
Cost of revenue	$	130	$	146	$	467	$	268
Selling and marketing		564		581		1,464		1,518
Research and development		326		395		1,006		1,068
General and administrative		605		1,086		5,617		2,921
Total stock-based compensation	$	1,625	$	2,208	$	8,554	$	5,775

On May 1, 2023, the Company announced that the Company and Juergen Stark, Chairman, Chief Executive Officer and President of the Company, have agreed that Mr. Stark would not continue as Chief Executive Officer and President of the Company, with his employment to terminate effective as of the close of business on June 30, 2023. On May 2, 2023, the Company entered into a separation agreement with Mr. Stark, resulting in an acceleration of the total stock-based compensation associated with equity awards granted to him. During the nine months ended September 30, 2023, the Company recorded a total of $4.0 million in stock-based compensation expenses and related payroll that would not have been recognized if Mr. Stark had not announced his retirement.

The following table presents the stock activity and the total number of shares available for grant as of September 30, 2023:


	(in thousands)
Balance at December 31, 2022		550
Plan Amendment		1,049
Options Cancelled		20
Restricted Stock Granted		(504	)
Restricted Stock Forfeited		21
Performance Shares Unearned		94
Performance Shares Granted		(163	)
Balance at September 30, 2023		1,067

On July 6, 2023, the Company’s stockholders approved an amendment to the plan to, among other things, (i) change the name to Turtle Beach Corporation 2023 Stock-Based Incentive Compensation Plan, and (ii) increase the number of shares of the Company’s common stock, par value $0.001 per share, authorized for issuance by 1,049,000.


	Options Outstanding
	Number of Shares Underlying Outstanding Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)
Outstanding at December 31, 2022		1,577,545		$	7.66		5.81	$	2,465,015
Options Granted		-			-
Options Exercised		(419,233	)		4.10
Options Forfeited		(19,676	)		15.78
Outstanding at September 30, 2023		1,138,636		$	8.83		4.37	$	2,363,338
Vested and expected to vest at September 30, 2023		1,138,899		$	8.94		4.36	$	2,361,278
Exercisable at September 30, 2023		1,043,268		$	8.97		4.16	$	2,182,154

Stock options are time-based and the majority are exercisable within 10 years of the date of grant, but only to the extent they have vested. The options generally vest as specified in the option agreements subject to acceleration in certain circumstances. In the event participants in the plan cease to be employed or engaged by the Company, all vested options would be forfeited if they are not exercised within 90 days. Forfeitures on option grants are estimated at 10% for non-executives and 0% for executives based on evaluation of historical and expected future turnover. Stock-based compensation expense was recorded net of estimated forfeitures, such that expense was recorded only for those stock-based awards expected to vest. The Company reviews this assumption periodically and will adjust it if it is not representative of future forfeiture data and trends within employee types (executive vs. non-executive).

Aggregate intrinsic value represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. The aggregate intrinsic value of options exercised was $2.8 million for the nine months ended September 30, 2023.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted as of the grant date. There were no new options granted during the nine months ended September 30, 2023. The total estimated fair value of employee options vested during the nine months ended September 30, 2023 was $0.8 million. As of September 30, 2023, total unrecognized compensation cost related to non-vested stock options granted to employees was $0.4 million, which is expected to be recognized over a remaining weighted average vesting period of 0.6 years.


	Shares			Weighted Average Grant Date Fair Value Per Share
Nonvested restricted stock at December 31, 2022		865,446		$	18.75
Granted		504,092			9.97
Vested		(565,581	)		16.44
Shares forfeited		(21,208	)		17.64
Nonvested restricted stock at September 30, 2023		782,749		$	14.80

As of September 30, 2023, total unrecognized compensation costs related to the nonvested restricted stock awards was $9.6 million, which will be recognized over a remaining weighted average vesting period of 2.5 years.

As of September 30, 2023, the Company had 162,672 performance-based restricted share units outstanding. The vesting of performance-based restricted share units is determined over a three-year period based on (i) the amount by which revenue growth exceeds a defined baseline market growth each year and (ii) the achievement of specified tiers of adjusted EBITDA as a percentage of net revenue each year, with the ability to earn and vest into such units ranging from 0% to 200%. As of September 30, 2023, achievement of the performance conditions associated with the 2023, 2022 and 2021 performance shares was deemed not probable.