Stock Option Plan

9 Months Ended

Sep. 30, 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 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 September 30, 2021, 1,139,831 shares of common stock 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 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 September 30, 2021, 327,516 shares of common stock 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	229,850	$	16.79
Exercised	(11,188)	$	7.13
Forfeited	(122,435)	$	14.49
Expired	(4,931)	$	21.50
Outstanding, September 30, 2021	2,067,057	$	12.20	8.14	$	6,956
Vested and expected to vest, September 30, 2021	2,067,057	$	12.20	8.14	$	6,956
Options exercisable, September 30, 2021	979,111	$	10.30	7.77	$	4,794

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 September 30, 2021, total unrecognized compensation cost related to option awards was $7.7 million, which is expected to be recognized over a remaining weighted-average vesting period of 2.2 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	422,150	$	16.81
Awards released	—	$	—
Awards canceled	(19,050)	$	16.28
Outstanding, September 30, 2021	403,100	$	16.84	$	5,482

As of September 30, 2021, all of the outstanding restricted stock units are unvested. As of September 30, 2021, total unrecognized compensation cost related to restricted stock units was $5.9 million, which is expected to be recognized over a remaining weighted-average vesting period of 3.5 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 September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Expected volatility	86%	52%	83%-86%	47%-52%
Risk-free interest rate	0.9%	0.4%	0.8%-1.1%	0.4%-1.7%
Dividend yield	—	—	—	—
Expected term (in years)	5.77	6.08	5.50-6.08	5.50-6.08

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 September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Expected volatility	45%	83%	45%-60%	58%-83%
Risk-free interest rate	0.1%	0.1%	0.1%	0.1%-1.1%
Dividend yield	—	—	—	—
Expected term (in years)	0.50	0.50	0.50	0.50

Stock-based compensation expense for the ESPP was immaterial for the three and nine months ended September 30, 2021 and 2020. As of September 30, 2021, total unrecognized compensation cost related to stock purchase rights granted under the ESPP was an immaterial amount, 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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of revenue	$	64	$	9	$	136	$	21
Selling, general and administrative	1,115		710		2,955		1,696
Research and development	175		80		460		160
Total	$	1,354	$	799	$	3,551	$	1,877