Stock Option Plan

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

In September 2019, the Company's Board of Directors adopted, and the Company's stockholders approved, the 2019 Incentive Award Plan (the 2019 Plan). Under the 2019 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, non-employee directors or consultants of the Company or its subsidiaries. A total of (i) 2,011,832 shares of common stock plus (ii) shares subject to awards granted under the 2013 Plan on or before the effective date of the 2019 Plan became available for issuance under the 2019 Plan and will initially be reserved for issuance under the 2019 Plan. The 2019 Plan contains an "evergreen provision" that allows annual increases in the number of shares available for issuance on the first day of each calendar year through January 1, 2029 in an amount equal to the lesser of: (i) 4% of the outstanding capital stock on each December 31st, or (ii) such lesser amount as determined by the Board of Directors. As of March 31, 2020, 1,488,919 shares remained available for future awards.

The options generally expire ten years after the date of grant and are exercisable to the extent vested. Vesting is established by the Board of Directors and is generally four years from the date of grant.

Activity under the Company's stock option plans is set forth below:


	Number of Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding, December 31, 2019	1,375,542	$	8.33	9.16	$	23,654
Granted	514,131	$	19.51
Exercised	(43,700)	$	0.26
Forfeited	(215,542)	$	9.73
Expired	(417)	$	19.04
Outstanding, March 31, 2020	1,630,014	$	11.88	9.22	$	9,324
Vested and expected to vest, March 31, 2020	1,630,014	$	11.88	9.22	$	9,324
Options exercisable, March 31, 2020	199,168	$	3.77	7.90	$	2,740

The intrinsic value is calculated as the difference between the fair value of the Company's common stock and the exercise price of the stock options.

Stock-Based Compensation Expense

The fair value of employee stock options was estimated using the following assumptions to determine the fair value of stock options granted:


	Three Months Ended March 31,
	2020	2019
Expected volatility	47%-50%	59%
Risk-free interest rate	0.6%-1.7%	2.6%
Dividend yield	—	—
Expected term (in years)	6.08	6.08

Total non-cash stock-based compensation expense recorded related to options granted in the condensed statement of operations is as follows (in thousands):


	Three Months Ended March 31,
	2020		2019
Cost of revenue	$	6	$	1
Selling, general and administrative	422		10
Research and development	3		1
Total	$	431	$	12

As of March 31, 2020, total unrecognized compensation cost was $8.7 million, which is expected to be recognized over a remaining weighted-average vesting period of 3.3 years.