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Stock-Based Compensation | 3 Months Ended
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Mar. 31, 2024
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stock-Based Compensation | Note 10. Stock-Based Compensation Shares of common stock reserved for issuance under the Company’s equity incentive plans were as follows:
|  | March 31, 2024 |
Outstanding stock awards |  |  | 9,261,193 |
Reserved for future award grants |  |  | 5,528,052 |
Reserved for future ESPP |  |  | 583,756 |
Total common stock reserved for stock awards |  |  | 15,373,001 |
Service-Based Stock Option Activity A summary of the Company’s service-based stock option activity (excluding performance-based stock option activity, which is presented separately below) for the three months ended March 31, 2024 is as follows:
|  | Outstanding Service-Based Options |
(in thousands, except share and per share data) |  | Number of Shares |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Contractual Term (in years) |  |  | Aggregate Intrinsic Value |
Balance—December 31, 2023 |  |  | 5,805,586 |  |  | $ | 7.40 |  |  |  | 6.90 |  |  | $ | 64 |
Options granted |  |  | 2,400,500 |  |  |  | 1.59 |  |  |  |  |  |  |
Options exercised |  |  | — |  |  |  | — |  |  |  |  |  |  |
Options forfeited or expired |  |  | (256,904 | ) |  |  | 7.60 |  |  |  |  |  |  |
Balance—March 31, 2024 |  |  | 7,949,182 |  |  | $ | 5.64 |  |  |  | 7.85 |  |  | $ | 46 |
Options vested and exercisable as of March 31, 2024 |  |  | 3,321,228 |  |  | $ | 9.62 |  |  |  | 5.72 |  |  | $ | — |
The weighted-average grant date fair value of options granted was $1.61 and $1.91 per share for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the unrecognized stock-based compensation cost of unvested options was $7.9 million, which is expected to be recognized over a weighted-average period of 2.3 years. Valuation of Service-Based Stock Options The Company estimated the fair value of service-based stock options using the Black-Scholes option-pricing model. Fair value of stock options is recognized as compensation expense on a straight-line basis over the requisite service periods of the awards. Fair value of stock options was estimated using the following range of assumptions:
|  | Three Months Ended March 31,
|  | 2024 |  | 2023
Expected term (in years) |  | 5.50 - 6.08 |  | 5.77
Volatility |  | 72.63 - 80.28% |  | 78.98%
Risk-free interest rate |  | 3.88 - 4.33% |  | 3.58%
Dividend yield |  | –% |  | –%
Performance-Based Stock Option Activity During 2024, the Company granted performance-based stock options ("PSOs") to the executive leadership team. Vesting of the PSOs is based upon attainment of certain Medicare reimbursement coverages by the end of 2025 and subject to continuous service by the executives. Fair value was estimated using the Black-Scholes option-pricing model. Total grant-date fair value of the PSOs was $0.3 million. A summary of the Company's performance-based stock option activity for the three months ended March 31, 2024 is as follows:
|  | Outstanding Performance-Based Options |
(in thousands, except share and per share data) |  | Number of Shares |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Contractual Term (in years) |  |  | Aggregate Intrinsic Value |
Balance—December 31, 2023 |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | — |
Options granted |  |  | 264,500 |  |  |  | 1.61 |  |  |  |  |  |  |
Balance—March 31, 2024 |  |  | 264,500 |  |  | $ | 1.61 |  |  |  | 9.96 |  |  | $ | — |
Options vested and exercisable as of March 31, 2024 |  |  | — |  |  |  |  |  |  |  |  |  |
Restricted Stock Units ("RSU") Activity and Valuation A summary of the Company’s RSU activity for the three months ended March 31, 2024 is as follows:
|  | Unvested Restricted Stock Units |
(in thousands, except share and per share data) |  | Number of Shares |  |  | Weighted- Average Grant Date Fair Value |  |  | Aggregate Fair Value |
Balance—December 31, 2023 |  |  | 1,253,826 |  |  | $ | 8.99 |  |  | $ | 2,633 |
RSUs granted |  |  | — |  |  |  | — |  |  |  |
RSUs vested |  |  | (33,505 | ) |  |  | 26.87 |  |  |  | 49 |
RSUs forfeited |  |  | (172,810 | ) |  |  | 9.45 |  |  |  |
Balance—March 31, 2024 |  |  | 1,047,511 |  |  | $ | 8.34 |  |  | $ | 1,561 |
As of March 31, 2024, the unrecognized stock-based compensation cost of unvested RSUs was $6.4 million, which is expected to be recognized over a weighted-average period of 1.6 years. ESPP Activity and Valuation During the three months ended March 31, 2024 and 2023, no shares of common stock were purchased under the Employee Stock Purchase Plan ("ESPP"). Additionally, no stock purchase rights were granted during either period. Stock-Based Compensation Expense The following is a summary of stock-based compensation expense by award type (in thousands):
|  | Three Months Ended March 31, |
|  | 2024 |  |  | 2023 |
Service-based stock options |  | $ | 1,215 |  |  | $ | 1,343 |
Performance-based stock options |  |  | 6 |  |  |  | — |
RSUs |  |  | 1,408 |  |  |  | 2,123 |
ESPP |  |  | 58 |  |  |  | 229 |
Total stock-based compensation expense |  | $ | 2,687 |  |  | $ | 3,695 |
The following is a summary of stock-based compensation expense by function (in thousands):
|  | Three Months Ended March 31, |
|  | 2024 |  |  | 2023 |
Cost of revenue |  | $ | 154 |  |  | $ | 490 |
Research and development |  |  | 947 |  |  |  | 1,245 |
Selling, general and administrative |  |  | 1,586 |  |  |  | 1,960 |
Total stock-based compensation expense |  | $ | 2,687 |  |  | $ | 3,695 |

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