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Employee Equity-Based Compensation
 9 Months Ended
Sep. 30, 2021
Share-based Payment Arrangement [Abstract]  
Employee Equity-Based Compensation
NOTE 12. EMPLOYEE EQUITY-BASED COMPENSATION

The following table summarizes option activity under the Company's equity-based compensation plans for the nine months ended September 30, 2021:

Number of SharesWeighted Average Exercise Price per Share
Options Outstanding January 1, 20218,045,461 $14.18 
Granted489,804 7.09 
Forfeited(269,712)14.66 
Exercised(391,362)3.72 
Expired(240,460)19.03 
Options Outstanding September 30, 20217,633,731 $14.09 

The table below summarizes the resulting weighted average inputs used to calculate the estimated fair value of options awarded for the three months ended September 30, 2021 and 2020:

Three Months Ended September 30,
20212020
Expected term (in years)0.006.14
Volatility— %62 %
Expected dividends— — 
Risk free interest rates— %0.42 %
Weighted average fair value$— $8.10 

The Company did not grant any stock option for the three months ended September 30, 2021.

The following table shows summary information for outstanding options and options that are exercisable (vested) as of September 30, 2021:

Options
Outstanding		Options
Exercisable
Number of options7,633,731 5,063,626 
Weighted average remaining contractual term (in years)5.924.87
Weighted average exercise price$14.09 $14.68 
Weighted average fair value$8.78 $9.11 
Aggregate intrinsic value (in thousands)$1,933 $1,929 
The following table summarizes RSU and performance-based award activity for the nine months ended September 30, 2021:

Number of SharesWeighted Average Grant Date Fair Value per Share
Outstanding January 1, 2021526,414 $11.17 
Granted2,678,948 11.28 
Forfeited(225,359)11.80 
Vested/released(659,539)12.23 
Outstanding September 30, 20212,320,464 $10.78 

The table below summarizes equity-based compensation expense for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Cost of sales$82 $119 $257 $249 
Research and development266 1,349 4,340 2,807 
Sales, general and administrative3,281 3,208 14,461 9,235 
$3,629 $4,676 $19,058 $12,291 

The table below summarizes share-based compensation cost capitalized to inventory or inventory transferred to property and equipment (also referred to as instruments) for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Cost capitalized to inventory
$77 $61 $319 $199 

As of September 30, 2021, unrecognized equity-based compensation expense related to unvested stock options and unvested RSUs was $7.2 million and $15.2 million, respectively. This is expected to be recognized over the years 2021 through 2026.

Included in the above-noted stock options outstanding and stock compensation expense are performance-based stock options which vest only upon the achievement of certain targets. Performance-based stock options are generally granted at-the-money, contingently vest over a period of 1 to 2 years, depending on the nature of the performance goal, and have contractual lives of 10 years. These options were valued in the same manner as the time-based options, with the assumption that performance goals will be achieved. The inputs for expected volatility, expected dividends, and risk-free rate used in estimating those options’ fair value are the same as the time-based options issued under the Company's 2012 Omnibus Equity Incentive Plan. The expected term for performance-based stock options is 5 to 7 years. However, the Company only recognizes stock compensation expense to the extent that the targets are determined to be probable of being achieved, which triggers the vesting of the performance options.

In 2020, the Company granted 105,000 performance-based stock options. 45,000 performance-based stock options vested in prior periods due to the performance obligations being achieved. During the nine months ended September 30, 2021, another 45,000 performance-based stock options vested due to the performance obligations being achieved. None of these options have been forfeited as of September 30, 2021.
The table below summarizes share-based compensation cost in connection with performance-based stock options for the nine months ended September 30, 2021 and 2020 (in thousands):

Nine Months Ended September 30,
20212020
Performance-based stock option expense
$230 $109 

Included in the above-noted RSU and performance-based award outstanding amounts are performance-based RSUs which vest only upon the achievement of certain targets. Performance-based RSUs contingently vest over a period of 1 to 3 years, depending on the nature of the performance goal, and have contractual lives of 10 years. These units were valued in the same manner as other RSUs, based on the published closing market price on the day before the grant date. However, the Company only recognizes stock compensation expense to the extent that the targets are determined to be probable of being achieved, which triggers the vesting of the performance options.

In 2020, the Company granted 364,338 performance-based RSUs. 81,000 performance-based RSUs were released in prior periods due to the performance obligations being achieved. 33,364 of these performance-based RSUs were forfeited due to the employees separating from the Company, of which 9,369 were forfeited during the nine months ended September 30, 2021. During the nine months ended September 30, 2021, 84,000 of these performance-based RSUs were released due to the performance obligations being achieved. At September 30, 2021 165,974 of these performance-based RSUs were outstanding. None of these performance-based RSUs have been forfeited due to performance obligations not being achieved.

In 2021, the Company granted 233,472 performance-based RSUs. During the nine months ended September 30, 2021, 10,755 of these performance-based RSUs were forfeited due to the employees separating from the Company. None of these performance-based RSUs have been released. At September 30, 2021, 222,717 of these performance-based RSUs were outstanding. None of these performance-based RSUs have been forfeited due to performance obligations not being achieved.

The table below summarizes share-based compensation cost in connection with performance-based RSUs for the nine months ended September 30, 2021, and 2020 (in thousands):

Nine Months Ended September 30,
20212020
Performance-based RSU expense
$818 $401