Stock Option Plan

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

2019 Incentive Award Plan

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, which expires in September 2029, 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. 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. As of March 31, 2021, 1,391,215 shares remained available for future awards.

2019 Employee Stock Purchase Plan

In September 2019, the Board of Directors adopted, and the Company's stockholders approved, the Employee Stock Purchase Plan (the ESPP). The ESPP became effective on the day the ESPP was adopted by the Company's Board of Directors. The ESPP permits participants to purchase common stock through payroll deductions of up to 20% of their eligible compensation. As of March 31, 2021, 345,493 shares remained available for issuance under the ESPP.

Stock Options

Stock option activity under the Company's 2019 Plan is set forth below:


	Number of Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding, December 31, 2020	1,975,761	$	11.81	8.71	$	6,750
Granted	88,750	$	18.20
Exercised	(3,381)	$	12.94
Forfeited	(17,197)	$	12.16
Expired	(2,353)	$	29.08
Outstanding, March 31, 2021	2,041,580	$	12.06	8.54	$	13,247
Vested and expected to vest, March 31, 2021	2,041,580	$	12.06	8.54	$	13,247
Options exercisable, March 31, 2021	665,878	$	9.52	8.06	$	6,013

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. As of March 31, 2021, total unrecognized compensation cost related to option awards was $8.8 million, which is expected to be recognized over a remaining weighted-average vesting period of 2.6 years.

Restricted Stock Units

Restricted stock unit activity under the Company's 2019 Plan is set forth below:


	Number of Shares	Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding, December 31, 2020	—	$	—	$	—
Awards granted	185,000	$	18.20
Awards released	—	$	—
Awards canceled	—	$	—
Outstanding, March 31, 2021	185,000	$	18.20	$	3,238

During the quarter ended March 31, 2021, the Company awarded 185,000 RSUs at a weighted-average grant date fair value per share of $18.20 to certain employees, all of which are outstanding and unvested as of March 31, 2021. As of March 31, 2021, total unrecognized compensation cost related to restricted stock units was $3.3 million, which is expected to be recognized over a remaining weighted-average vesting period of 3.9 years.

Stock-Based Compensation Expense

Stock Options

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,
	2021	2020
Expected volatility	84%	47%-50%
Risk-free interest rate	0.8%	0.6%-1.7%
Dividend yield	—	—
Expected term (in years)	6.08	6.08

Employee Stock Purchase Plan

The following assumptions were used to calculate the stock-based compensation for each stock purchase right granted under the ESPP:


	Three Months Ended March 31,
	2021	2020
Expected volatility	60%	58%
Risk-free interest rate	0.1%	1.1%
Dividend yield	—	—
Expected term (in years)	0.50	0.50

Stock-based compensation expense for the ESPP was immaterial for the three months ended March 31, 2021 and 2020. As of March 31, 2021, total unrecognized compensation cost related to stock purchase rights granted under the ESPP $0.1 million, which is expected to be recognized over a remaining weighted-average vesting period of 0.4 years.

Total non-cash stock-based compensation expense recorded related to options granted, restricted stock units granted and stock purchase rights granted under the ESPP in the condensed statement of operations is as follows (in thousands):


	Three Months Ended March 31,
	2021		2020
Cost of revenue	$	11	$	6
Selling, general and administrative	791		422
Research and development	110		3
Total	$	912	$	431