Note 11. Equity Incentive Plans and Stock-Based Compensation

As of June 30, 2024, the Company had a remaining allocated reserve of 789,655 shares of its common stock for issuance under its 2021 Equity Incentive Plan (the “2021 EIP”), which provides for the granting of stock options, restricted stock units (“RSUs”) and stock appreciation rights to employees, directors, and consultants of the Company. As of June 30, 2024, the Company had an allocated reserve of 284,440 shares of its common stock for issuance under its 2021 Employee Stock Purchase Plan (“2021 ESPP”). As of June 30, 2024, the Company had not begun any offering periods for the 2021 ESPP.

Stock options

The aggregate intrinsic value of options outstanding was $2.0 million and $2.3 million, respectively, as of June 30, 2024 and December 31, 2023.

As of June 30, 2024, total unrecognized compensation cost related to options was immaterial and is expected to be recognized over a weighted-average period of 0.7 years.

For the six months ended June 30, 2024, there were no options granted.

Restricted Stock Units

The fair value of RSUs under the Company’s 2021 EIP is estimated using the value of the Company’s common stock on the date of grant.

The aggregate intrinsic value of outstanding RSUs is calculated based on the closing price of the Company’s common stock as of the date outstanding. As of June 30, 2024, there was $24.6 million of unrecognized compensation cost, which is expected to be recognized over a weighted average period of approximately 2.7 years. As of June 30, 2023, there was $37.3 million of unrecognized compensation cost, which is expected to be recognized over a weighted average period of approximately 2.7 years.

Earnout Shares––Employees

The Earnout Shares issuable to holders of employee stock options are accounted as stock-based compensation expense as they are subject to forfeiture based on the satisfaction of certain employment conditions. The estimated fair values of the Earnout Shares associated with vested stock options are recognized as an expense and determined by the Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the five-year earnout period. The portion of the Earnout Shares associated with unvested stock options are recognized as an expense and considers the vesting continuing employment requirements.

Stock-based Compensation Expense