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Stock-based Compensation | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-based Compensation | 11. Stock-based Compensation Equity Compensation Plans 2011 Equity Incentive Plan In January 2011, the Company's board of directors adopted the 2011 Equity Incentive Plan (2011 Plan) under which incentive stock options, non-statutory stock options, RSUs, stock appreciation rights, PSUs, and performance shares may be granted to its employees, directors, and consultants. 2022 Inducement Equity Incentive Plan In April 2022, the Company's board of directors adopted the 2022 Inducement Plan and reserved 9.5 million shares of common stock for the issuance of equity-based awards, including non-statutory stock options, RSUs, restricted stock, stock appreciation rights, performance shares and PSUs. In accordance with Nasdaq listing rules, equity awards issued under the 2022 Inducement Plan are restricted to individuals who are not already employees or directors of the Company. The terms and conditions of the 2022 Inducement Plan are substantially similar to those of the 2011 Plan. The Company's board of directors sets the terms, conditions, and restrictions related to the grant of stock options, RSUs and performance-based awards under its stock-based plans, as well as employee participation in the 2017 Employee Stock Purchase Plan (ESPP). The Company's board of directors determines the number of awards to grant and also sets vesting criteria. In general, RSUs vest on a quarterly basis over a period of four years from the date of grant at a rate of 25% on the first anniversary of the grant date and ratably each quarter over the remaining 12 quarters, or ratably over 16 quarters, subject to the employees’ continued employment. The Company may grant RSUs with different vesting terms from time to time. Stock options granted under the Company's 2022 Inducement Plan and 2011 Plan have a term of no more than ten years from the date of grant and an exercise price of at least 100% of the fair market value of the underlying common stock on the date of grant. Generally, options vest at a rate of either 25% on the first anniversary of the option grant date and ratably each month over the remaining period of 36 months, or ratably each month over 48 months. The Company may grant options with different vesting terms from time to time. For performance-based share awards, the Company's board of directors sets the performance objectives and other vesting provisions in determining the number of shares or value of performance units and performance shares that will be paid out. Such payout will be a function of the extent to which performance objectives or other vesting provisions have been achieved. Restricted Stock Units
|  | Number of Units (in thousands) |  |  | Weighted-Average Grant Date Fair Value per Unit |
Balance at December 31, 2022 |  |  | 7,120 |  |  | $ | 2.58 |
RSU granted |  |  | 3,728 |  |  | $ | 2.32 |
RSU released |  |  | (2,970 | ) |  | $ | 2.68 |
RSU forfeited |  |  | (945 | ) |  | $ | 2.17 |
Balance at December 31, 2023 |  |  | 6,933 |  |  | $ | 2.46 |
As of December 31, 2023, the unrecognized compensation costs related to outstanding unvested RSUs under the Company’s equity incentive plans were $13.9 million. The Company expects to recognize those costs over a weighted-average period of 2.5 years. Stock Options
|  | Number of Options (in thousands) |  |  | Weighted-Average Exercise Price per Option |  |  | Weighted- Average Remaining Contractual Life (in years) |  |  | Aggregate Intrinsic Value (1) (in thousands) |
Balance at December 31, 2022 |  |  | 7,882 |  |  | $ | 4.43 |  |  |  | 7.9 |  |  | $ | — |
Options granted |  |  | 2,609 |  |  | $ | 2.57 |  |  |  |  |  |  |
Options exercised |  |  | (44 | ) |  | $ | 1.84 |  |  |  |  |  |  |
Options cancelled |  |  | (1,153 | ) |  | $ | 6.84 |  |  |  |  |  |  |
Balance at December 31, 2023 |  |  | 9,294 |  |  | $ | 3.62 |  |  |  | 8.5 |  |  | $ | 439 |
Vested at December 31, 2023 |  |  | 3,497 |  |  | $ | 3.98 |  |  |  | 8.2 |  |  | $ | 78 |
Unvested awards at December 31, 2023 |  |  | 5,797 |  |  | $ | 3.40 |  |  |  | 8.7 |  |  | $ | 361 |
Aggregate intrinsic value as of December 31, 2023 was calculated as the difference between the closing price per share of the Company’s common stock on the last trading day of December, which was $2.21, and the exercise price of the options, multiplied by the number of in-the-money options. The total intrinsic value of options exercised during the years ended December 31, 2023 and 2022 was immaterial. The total intrinsic value of options vested during the years ended December 31, 2023 and 2022 was $0.1 million and zero, respectively. As of December 31, 2023, the unrecognized compensation costs related to outstanding unvested options under the Company’s equity incentive plans were $12.4 million. The Company expects to recognize those costs over a weighted-average period of 2.3 years. The weighted average assumptions used to estimate the fair value of options granted were as follows:
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |
Stock options |  |  |  |  |  |
Weighted average expected volatility |  |  | 97.1 | % |  |  | 91.8 | %
Weighted average expected term |  | 4.7 years |  |  | 4.3 years |
Weighted average risk-free interest rate |  |  | 3.9 | % |  |  | 2.6 | %
Dividend yield |  |  | — |  |  |  | — |
Weighted-average fair value per share |  | $ | 1.49 |  |  | $ | 2.21 |
Expected Term—The expected term of options granted represents the period of time that the options are expected to be outstanding and is derived by analyzing historical exercise behavior. Expected Volatility—The estimated volatility was based on the historical volatility of the common stock of the Company. Risk-Free Interest Rate—The risk-free interest rate is the implied yield in effect at the time of the option grant based on U.S. Treasury securities with contract maturities similar to the expected term of the Company’s stock options. Dividend Rate—The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used. Performance-based Awards The Company previously granted PSUs to certain executive officers and senior-level employees with the number of PSUs ultimately earned under these awards being calculated by comparing the Total Shareholder Return (TSR) of the Company’s common stock over the applicable three-year period against the TSR of a defined group of peer companies. The Company’s relative performance against its peer group determined the payout, which could range from 0% to 200% of the base awards. As these awards required continuous service in order to vest and these officers and senior level employees are no longer with the Company, they were canceled as of June 30, 2023. In July 2023, the Company granted performance-based restricted stock units to certain executive officers that will vest in the first quarter of 2024 based upon the achievement of specified revenue and EBITDA targets for the twelve months ended December 31, 2023, and the executive’s continued employment with the Company. Stock-based compensation expense is being recognized over the requisite service period, as it is deemed probable the Company will satisfy the performance measures. Activity under the performance-based awards was as follows:
|  | Number of Units (in thousands) |  |  | Weighted-Average Grant Date Fair Value per Unit |
Balance at December 31, 2022 |  |  | 453 |  |  | $ | 4.81 |
PSU granted |  |  | 309 |  |  | $ | 2.42 |
PSU released |  |  | (52 | ) |  | $ | 9.60 |
Performance adjustment for 2020 awards |  |  | (401 | ) |  | $ | 4.19 |
Balance at December 31, 2023 |  |  | 309 |  |  | $ | 2.42 |
Stock-based Compensation Expense Stock-based compensation expense is reported in the Company's consolidated statement of operations as follows (in thousands):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |
Cost of product revenue |  | $ | 811 |  |  | $ | 592 |
Research and development expense |  |  | 1,671 |  |  |  | 2,481 |
Selling, general and administrative expense |  |  | 10,641 |  |  |  | 11,807 |
Total stock-based compensation expense |  | $ | 13,123 |  |  | $ | 14,880 |

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