Stock Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock Based Compensation

Stock-Based Compensation

Stock Options

The Company’s stock options generally vest on various terms based on continuous services over periods ranging from three to five years. The stock options are subject to time vesting requirements through 2033 and are nontransferable. Stock options granted have a maximum contractual term of 10 years. As of September 30, 2023, approximately 2.9 million employee stock options had vested.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Before the consummation of the Business Combination, management took the average of several publicly traded companies that were representative of the Company’s size and industry in order to estimate its expected stock volatility. The expected term of the options represented the period of time the instruments were expected to be outstanding. The Company based the risk-free interest rate on the rate payable on the U.S. Treasury securities corresponding to the expected term of the awards at the date of grant. Expected dividend yield was zero based on the fact that the Company had not historically paid and does not intend to pay a dividend in the foreseeable future.

The following assumptions were used to compute the fair value of the stock option grants during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
	2023		2022
Risk-free interest rate	4.10 - 4.87		0.07 - 2.80
Expected term (in years)	6.25		4
Volatility	52% - 62%		60% - 64%
Dividend yield	0	%

The following table summarizes the Company’s stock option activity under the Company’s 2021 Stock Incentive Plan for the nine months ended September 30, 2023:

	Options Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Balance as of December 31, 2022	11,571,308	$	7.11	9.05	$	39,389,063
Granted/vested during the year	1,115,874	8.92		—	—
Exercised during the year	(493,984)	3.63		—	—
Cancelled during the year	(551,665)	7.66		—	—
Balance as of September 30, 2023	11,641,533	7.42		8.47	49,268,644
Options vested and exercisable as of September 30, 2023	2,937,143	$	6.36	7.65	3,060,026

The aggregate intrinsic value in the above table is calculated as the difference between the fair value of the Common Stock price and the exercise price of the stock options. The weighted average grant date fair value per share for stock option grants during the nine months ended September 30, 2023 and the year ended December 31, 2022 was $8.92 and $7.04, respectively. On September 30, 2023 and December 31, 2022, the total unrecognized compensation related to unvested stock option awards granted was $30,994,529 and $41,666,564, respectively, which the Company expects to recognize over a weighted-average period of approximately 1.85 years.

Restricted Stock Units

The fair value of restricted stock units (“RSUs”) is determined on the date of grant. The Company records compensation expense in the unaudited Condensed Consolidated Statement of Operations and Comprehensive Income on a straight-line basis over the vesting period for RSUs. The vesting period for employees and members of the Board of Directors ranges from one to four years.

Activity under RSUs during the nine months ended September 30, 2023 was as follows:

	RSUs	Weighted- Average Grant Date Fair Value Per RSU
Balance as of December 31, 2022	305,587	$	8.35
Granted	253,796	8.39
Vested	(156,276)	8.90
Forfeited	—	—
Balance as of September 30, 2023	403,107	8.16
Vested and unissued as of September 30, 2023	212,518	8.25
Non-vested as of September 30, 2023	403,107	8.16

The total grant-date fair value of RSUs granted during the nine months ended September 30, 2023 was $2,130,040.

The Company recorded stock-based compensation expense related to RSUs of $25,000 and $1,416,338 for the three and nine months ended September 30, 2023, respectively,

As of September 30, 2023, the Company had $3,290,875 in unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted-average period of approximately 1.3 years.