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Stock-Based Compensation | 9 Months Ended
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Sep. 30, 2021
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation Equity Incentive Plans On December 17, 2013, the Company adopted the Long-Term Incentive Plan (“2013 Plan”). The 2013 Plan was terminated in July 2021 in connection with the adoption of the 2021 Equity Incentive Plan (“2021 Plan”), which became effective on July 20, 2021, and no further awards will be granted under the 2013 Plan. The 2021 Plan provides for the grant of incentive stock options, or ISOs, within the meaning of Section 422 of the Code to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options, or NSOs, stock appreciation rights, restricted stock awards, or RSAs, restricted stock units, or RSUs, awards, performance awards and other forms of awards to the Company’s employees, directors and consultants, including employees and consultants of the Company’s affiliates. No shares were issued under the 2013 Plan or 2021 Plan during the three months ended September 30, 2021. As of September 30, 2021, 5.5 million shares remained available for future issuance under the 2021 Plan. Stock Options Options under the 2021 Plan are granted at the estimated fair value of the shares on the date of grant. The maximum term of options granted under the plan is ten years from the date of grant. Options normally vest according to a four-year vesting schedule, with 25% of the shares vesting on the one-year anniversary and equal monthly vesting installments thereafter. The following table summarizes the stock option activity under the 2013 Plan and 2021 Plan (in thousands except for per share amounts and years):
| Number of shares |  | Weighted- average exercise price per share |  | Weighted- average remaining contractual life (years) |  | Aggregate intrinsic value
Options outstanding as of December 31, 2020 | 3,305 |  |  | $ | 3.86 |  |  | 7.21 |  | 22,952 |
Granted | 537 |  |  | 18.70 |  |  |  |  |
Exercised | (641) |  |  | 2.50 |  |  |  |  |
Forfeited and cancelled | (232) |  |  | 7.04 |  |  |  |  |
Options outstanding as of September 30, 2021 | 2,969 |  |  | $ | 6.59 |  |  | 6.94 |  | 122,763 |
Options vested and exercisable at September 30, 2021 | 1,886 |  |  | $ | 3.08 |  |  | 5.97 |  | 84,618 |
Aggregate intrinsic value represents the difference between the Company’s estimated fair value of its common stock and the exercise price of outstanding options. The aggregate intrinsic value of stock options exercised was $17.4 million and $0.8 million during the nine months ended September 30, 2021 and 2020, respectively. The Company recognized total stock-based compensation cost related to equity incentive awards of $2.5 million and $1.5 million for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, unrecognized stock-based compensation cost related to outstanding unvested stock options that are expected to vest was $6.3 million, which is expected to be recognized over a weighted-average period of 2.45 years. Restricted Stock Awards The fair value of restricted stock awards (“RSAs”) are determined using the fair value of the Company’s common stock on the date of grant. During the nine months ended September 30, 2021, the Company granted 0.2 million RSAs. No RSAs were granted for the nine months ended September 30, 2020. During the nine months ended September 30, 2021 and 2020, 38,836 and 37,500 RSAs vested and were released from the Company’s right to repurchase, respectively, and no RSAs were cancelled. The weighted average estimated fair value of RSAs granted for the nine months ended September 30, 2021 was $18.70 per share. As of September 30, 2021, the Company had $4.0 million of unrecognized stock-based compensation related to RSAs with a weighted average remaining requisite service period of 2.82 years. Valuation Assumptions The Company grants stock options with an exercise price equal to the stock’s fair value at the date of grant. The fair value of a stock option is estimated on the grant date using the Black-Scholes option-pricing model. Stock-based compensation expense is recognized, net of forfeitures, over the requisite service periods of the awards. Stock option awards generally have 10-year terms and vest and become exercisable at a rate of 25% on the first anniversary of the vesting commencement date and 1/48th each month thereafter. The Black-Scholes assumptions used to value the employee options during the nine months ended September 30, 2021 are as follows:
Stock options: |  |  |  |  |  |
Risk-free interest rate |  |  |  |  | 0.8% |
Weighted-average expected term of the options |  |  |  |  | 6.25 years |
Expected dividend rate |  |  |  |  | — % |
Expected volatility |  |  |  |  | 53.8% |
Fair value of common stock |  |  |  |  | $18.70 |
These assumptions and estimates were determined as follows: •Fair Value of Common Stoc k. The Company’s board of directors determined the fair value of its common stock using various valuation methodologies, including external valuation analyses. •Risk-Free Interest Rate. The risk-free interest rate for the expected term of the options was based on the U.S. Treasury yield curve in effect at the time of the grant. •Weighted-Average Expected Term. The expected term was estimated using the simplified approach, in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award, as the Company does not have sufficient historical data relating to stock-option exercises. •Expected Dividend Yield. The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. As a result, an expected dividend yield of zero was used. •Expected Volatility. As there was no public market for the Company’s common stock, the Company has limited information on the volatility of its common stock. Accordingly, the expected volatility for the Company was estimated by taking the average historic price volatility for industry peers, consisting of several public companies in the Company’s industry which are either similar in size, stage of life cycle, or financial leverage, over a period equivalent to the expected term of the awards.

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