Stockholders' Equity

3 Months Ended

Mar. 31, 2021

NOTE 9. STOCKHOLDERS’ EQUITY

Equity Plans

At March 31, 2020, in total, we had three active equity compensation plans: the 2010 Equity Incentive Plan (“2010 Plan”), the 2010 Outside Director Equity Incentive Plan (“2010 Director Plan”) and the 2010 Employee Stock Purchase Plan (“ESPP”). Our 2010 Plan and 2010 Director Plan expired on July 29, 2020.

On August 4, 2020, stockholders approved our new 2020 Equity Incentive Plan (the “2020 Plan”) and reserved 11,000,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the 2020 Plan.

On December 2, 2020, the Board of Directors (the “Board”) adopted the 2020 Inducement Equity Incentive Plan (the “Inducement Plan”) and reserved 2,500,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Plan. On April 18, 2021, the Board amended the Inducement Plan to reserve an additional 750,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Plan.

Stock Options

The following table summarizes stock option activity for all our stock option plans for the three months ended March 31, 2021 (in thousands, except per share amounts):



	Stock Options Outstanding
				Weighted
	Number			average
	of shares	Exercise price		exercise price
Balances, December 31, 2020	14,638	$	1.16 – 20.90	$	5.53
Options granted	1,697		31.18 – 46.37		37.37
Options exercised	(3,558)		1.16 – 15.98		5.43
Options canceled	(445)		2.54 – 5.27		3.79
Balances, March 31, 2021	12,332	$	1.16 – 46.37	$	10.00

For the three months ended March 31, 2021, we recognized stock-based compensation expense of $2.5 million related to options.

RSUs

Time-based RSUs

The following table summarizes the time-based RSUs activity for the three months ended March 31, 2021 (in thousands, except per share amounts):


		Weighted average
	Number	grant date
	of shares	fair value
RSUs outstanding at December 31, 2020	5,919	$	5.25
RSUs granted	2,123		42.39
RSUs released	(1,412)		4.45
RSUs forfeited	(103)		12.10
Unvested RSUs outstanding at March 31, 2021	6,527	$	17.40

For the three months ended March 31, 2021, we recognized stock-based compensation expense of $5.0 million related to time-based RSUs.

Performance-based RSUs

The following table summarizes the performance-based RSUs (“PSUs”) activity for the three months ended March 31, 2021 (in thousands, except per share amounts):


		Weighted average
	Number	grant date
	of shares	fair value
PSUs outstanding at December 31, 2020	94	$	2.63
PSUs granted	—		—
PSUs released	—		—
PSUs forfeited	(94)		2.63
Unvested PSUs outstanding at March 31, 2021	—	$	—

For the three months ended March 31, 2021, we recognized stock-based compensation expense of $0 related to the performance-based RSUs.

As of March 31, 2021, we had a total of 6.7 million shares of common stock available for future issuance under the 2020 Plan and the Inducement Plan.

ESPP shares

Shares issued under our ESPP were 983,180 and none during the three months ended March 31, 2021 and 2020, respectively. In January 2021, an additional 3.8 million shares were reserved under the ESPP. As of March 31, 2021, 8,741,461 shares of our common stock remain available for issuance under our ESPP.

For the three months ended March 31, 2021, we recognized stock-based compensation expense of $2.5 million related to the ESPP shares.

Stock-Based Compensation

The following table summarizes the stock-based compensation expense for the three months ended March 31, 2021 and 2020, respectively (in thousands):



	Three Months Ended March 31,
	2021		2020
Cost of revenue	$	992	$	527
Research and development		3,048		1,759
Sales, general and administrative		6,125		1,746
Total stock-based compensation expense	$	10,165	$	4,032

We estimated the fair value of employee stock options on the grant date using the Black-Scholes option pricing model. The estimated fair value of employee stock options is amortized on a straight-line basis over the requisite service period of the awards.

The fair value of shares to be purchased under our stock options was estimated using the following assumptions:



	Three Months Ended March 31,
Stock Option	2021	2020
Expected term in years	4.6	5.1
Expected volatility	68%	57%
Risk-free interest rate	0.50%	1.20%
Dividend yield	—	—

We estimate the value of employee stock purchase rights on the grant date using the Black-Scholes option pricing model. The fair value of shares to be purchased under our ESPP was estimated using the following assumptions:



	Three Months Ended March 31,
ESPP	2021	2020
Expected term in years	0.5 - 2.0	0.5 - 2.0
Expected volatility	68%	57%
Risk-free interest rate	0.07% - 0.13%	0.8% - 1.0%
Dividend yield	—	—