In January 2021, we adopted the Dynavax Technologies Corporation 2021 Inducement Award Plan (“2021 Inducement Plan”), pursuant to which we reserved 1,500,000 shares of common stock for issuance under the plan to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company.

As of March 31, 2021, the 2018 Equity Incentive Plan, as amended, (“Amended 2018 EIP”), the 2021 Inducement Plan and the Amended and Restated 2014 Employee Stock Purchase Plan are our active plans. Under the Amended 2018 EIP, the aggregate number of shares of our common stock that may be issued to employees and directors (subject to adjustment for certain changes in capitalization) is 22,517,869.

Under our stock-based compensation plans, option awards generally vest over a three or four-year period contingent upon continuous service, and expire seven to ten years from the date of grant (or earlier upon termination of continuous service). Option activity under our stock-based compensation plans during the three months ended March 31, 2021 was as follows (in thousands except per share amounts):

	Shares Underlying Outstanding Options			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Balance at December 31, 2020		8,505		$	11.57
Options granted		1,996			9.36
Options exercised		(119	)		4.16
Options cancelled:
Options forfeited (unvested)		(171	)		7.50
Options expired (vested)		(164	)		19.67
Balance at March 31, 2021		10,047		$	11.15		4.26	$	17,816
Vested and expected to vest at March 31, 2021		9,693		$	11.26		4.18	$	17,184
Exercisable at March 31, 2021		5,967		$	13.44		3.05	$	8,975

Restricted stock unit activity under our stock-based compensation plans during the three months ended March 31, 2021 was as follows (in thousands except per share amounts):

	Number of Shares (in thousands)			Weighted-Average Grant-Date Fair Value Per Share
Non-vested as of December 31, 2020		1,794		$	7.23
Granted		1,796			9.43
Vested		(533	)		8.88
Forfeited		(120	)		8.50
Non-vested as of March 31, 2021		2,937		$	8.22

We granted performance-based restricted stock unit (“PSU”) to certain executives in February 2021. These PSUs vest upon a specified market condition. The summary of PSU activities for the three months ended March 31, 2021 is as follows:

	Number of Shares (in thousands)			Weighted-Average Grant-Date Fair Value Per Share
Non-vested as of December 31, 2020		-		$	-
Granted		297			8.40
Forfeited		(30	)		8.40
Non-vested as of March 31, 2021		267		$	8.40

The fair value-based measurement of each option is estimated on the date of grant using the Black-Scholes option valuation model. The fair value of each RSU is determined at the date of grant using our closing stock price. The fair value of each PSU is estimated using the Monte Carlo simulation method on the date of grant. The weighted-average assumptions used in the calculations of these fair value measurements are as follows:

	Stock Options						Market-Based Performance Stock Unit (“PSUs”)
	Three Months Ended						Three Months Ended
	March 31,						March 31, 2021
	2021			2020
Weighted-average fair value per share	$	6.72		$	3.58		$	8.40
Risk-free interest rate		0.5	%		1.4	%	From 0.03% to 1.92%
Expected life (in years)		4.5			4.5			2.9
Volatility		1.0			0.9			0.9

The components of stock-based compensation expense were as follows (in thousands):

	Three Months Ended
	March 31,
	2021		2020
Research and development	$	872	$	(1,573	)
Selling, general and administrative		3,144		2,442
Cost of sales - product		170		136
Inventory		537		773
Total	$	4,723	$	1,778

Compensation expense is based on awards ultimately expected to vest and reflects estimated forfeitures. Stock-based compensation for the three months ended March 31, 2020 included reversal of expenses related to cancellation of certain equity grants in the first quarter of 2020.