12. Stock-Based Compensation

We recognize stock-based compensation expense associated with stock options and restricted stock units ("RSUs"), and stock purchase rights. Stock options and RSUs are granted under the 2014 Stock Option Plan of Hotshine Holdings, Inc. (the “2014 Plan”) and 2021 Incentive Award Plan (the “2021 Plan”) while stock purchase rights are granted under the 2021 Employee Stock Purchase Plan (“2021 ESPP”).

Refer to our 2023 Form 10-K for additional details on employee stock incentive plans.

Share-Based Payment Valuation

The grant date fair value of Time Vesting Options granted is determined using the Black-Scholes option-pricing model. The grant date fair value of Performance Vesting Options is determined using a Monte Carlo simulation model and a barrier-adjusted Black-Scholes option-pricing model. The grant date fair value of stock purchase rights granted under the 2021 ESPP is determined using the Black-Scholes option-pricing model.

2021 ESPP

Time Vesting Options

Stock Options

We granted 1,621,444 Time Vesting Options with a grant date fair value of $4,945 during the six months ended June 30, 2024. There were no Performance Vesting Options granted during the six months ended June 30, 2024.

The fair value of shares attributable to stock options that vested during the six months ended June 30, 2024 was $8,470.

As of June 30, 2024, the weighted-average remaining contractual life of outstanding stock options was approximately 5.53 years.

Restricted Stock Units

A summary of our RSU activity during the period presented is as follows:

We granted 2,996,219 RSUs with a grant date fair value of $21,054 during the six months ended June 30, 2024.

The fair value of shares attributable to RSUs that vested during the six months ended June 30, 2024 was $8,908.

As of June 30, 2024, the weighted-average remaining contractual life of outstanding RSUs was approximately 9.35 years.

Stock-Based Compensation Expense

We estimated a forfeiture rate of 10.03% for awards with service-based vesting conditions based on historical experience and future expectations of the vesting of these share-based payments. We used this rate as an assumption in calculating stock-based compensation expense for Time Vesting Options, RSUs, and stock purchase rights granted under the 2021 ESPP.

As of June 30, 2024, total unrecognized compensation expense related to unvested Time Vesting Options was $8,276, which is expected to be recognized over a weighted-average period of 2.35 years.

As of June 30, 2024, there was no unrecognized compensation expense related to unvested Performance Vesting Options as the completion of the IPO satisfied the performance condition and as a result, all outstanding Performance Vesting Options vested.

As of June 30, 2024, total unrecognized compensation expense related to unvested RSUs was $25,738, which is expected to be recognized over a weighted-average period of 2.52 years.

As of June 30, 2024, total unrecognized compensation expense related to unvested stock purchase rights under the 2021 ESPP was $298, which is expected to be recognized over a weighted-average period of 0.38 years.