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Stock-Based Compensation | 9 Months Ended
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Sep. 30, 2023
Stock-Based Compensation [Abstract] |
Stock-Based Compensation |
7. | Stock-based compensation
Summary of plans and activity In June 2001, the Company’s Board of Directors and stockholders established the 2001 Stock Incentive Award Plan (“2001 Plan”). Under the 2001 Plan, as amended, 2,674,749 shares of common stock had been reserved for the issuance of incentive stock options granted to employees, non-employee directors, consultants, or independent contractors. Options granted under the 2001 Plan have vesting terms that range from the date of grant to four years and expire within a maximum term of 10 years from the grant date. In 2021, the Company’s Board of Directors and stockholders established the 2021 Equity Incentive Plan (“2021 Plan”). The number of shares of common stock initially reserved for issuance under the 2021 Plan was 1,854,490 newly reserved shares in addition to the 600,737 shares that remained available for issuance under the 2001 Plan. The shares available for issuance under the 2021 Plan automatically increase on the first day of each year, commencing January 1, 2022, and ending on (and including) January 1, 2031, in an amount equal to 5% of the total number of shares of the Company’s common stock outstanding on the last day of the calendar month before the date of each automatic increase, or such lesser number of shares as determined by the Board of Directors. The annual increase resulted in an additional 1,033,186 shares being reserved for issuance under the 2021 Plan as of January 1, 2023. The 2021 Plan provides for the issuance of stock options, stock appreciation rights, restricted stock awards, stock unit awards and other stock-based awards and cash incentive awards to employees, consultants and non-employee directors of the Company and its subsidiaries. Awards granted under the 2021 Plan will have such vesting schedules and other terms as determined by the Compensation Committee and stock options and stock appreciation rights have a maximum term of 10 years from the grant date. No further awards can be made under the 2001 Plan following the adoption of the 2021 Plan. As of September 30, 2023, there were 1,724,683 shares available for future issuance under the 2021 Plan. Options are granted at exercise prices not less than the fair market value (as determined by the Board of Directors) of the Company’s common stock on the date of grant. During the years 2008 through the initial public offering (the “IPO”), the Board of Directors authorized the grant of stock options for the purchase of shares of common stock to the employers of certain non-employee directors. The options were not granted under the 2001 Plan or the 2021 Plan, but terms are substantially the same as the Company’s standard form of option agreement for non-employee directors as they have an exercise price not less than the fair market value on the grant date and vest over 48 months from the date of grant. The following is a summary of stock option activity:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Weighted |  | ​ | ​
​ | ​ | Number | ​ | Average | ​ | Aggregate
​ | ​ | of | ​ | Exercise | ​ | Intrinsic
​ | ​ | Options | ​ | Price | ​ | Value
​ | ​ | ​ | ​ | ​ | ​ |  | (in thousands)
Balance as of December 31, 2022 |  | 3,756,835 | ​ | $ | 8.28 |  | ​ | $ | 36,616
Granted |  | 1,086,876 | ​ |  | 14.06 |  | ​ | ​ |
Cancelled / Forfeited |  | (264,160) | ​ |  | 10.42 |  | ​ | ​ |
Exercised |  | (115,455) | ​ |  | 4.50 |  | ​ | ​ |
Balance as of September 30, 2023 |  | 4,464,096 | ​ | $ | 9.66 | ​ | ​ | $ | 37,331
Options exercisable as of September 30, 2023 |  | 2,311,211 | ​ | $ | 7.05 | ​ | ​ | $ | 25,374
​ As of September 30, 2023, stock options outstanding included 8,796 options that were not granted under the 2001 Plan or the 2021 Plan. For options outstanding as of September 30, 2023, the weighted average remaining contractual life was 7.5 years. For options exercisable as of September 30, 2023, the weighted average remaining contractual life was 6.4 years. The Company’s Board of Directors and stockholders also established an Employee Stock Purchase Plan (the “ESPP”). The number of shares of common stock initially reserved for issuance under the ESPP was 278,170. The shares available for issuance under the ESPP automatically increase on the first day of each year, commencing January 1, 2022, and ending on (and including) January 1, 2031, in an amount equal to 1% of the total number of shares of the Company’s common stock outstanding on the last day of the calendar month before the date of each automatic increase, or such lesser number of shares as determined by the Board of Directors. The annual increase resulted in an additional 206,637 shares being reserved for issuance under the ESPP as of January 1, 2023. The ESPP permits certain of the Company’s U.S. employees to purchase shares of the Company’s common stock at a price per share not less than 85% of the lower of (i) the closing market price per share of the Company’s common stock on the first day of the applicable purchase period or (ii) the closing market price per share of the Company’s common stock on the purchase date at the end of the applicable six-month purchase period. The first purchase date under the ESPP was September 30, 2022. For the nine months ended September 30, 2023, 34,421 shares of common stock were purchased under the ESPP for $0.5 million of employee contributions. As of September 30, 2023, there were 540,489 shares available for issuance under the ESPP. Stock-based compensation expense The Company uses the Black-Scholes option pricing model to determine the fair value of stock options and ESPP purchase rights on the grant date. The Company measures stock-based compensation expense based on the grant date fair value of the award and recognizes compensation expense over the requisite service period, which is generally the vesting period for stock options and the offering period for ESPP purchase rights. The amount of stock-based compensation expense recognized for stock option awards during a period is based on the portion of the awards that are ultimately expected to vest. The amount of stock-based compensation expense recognized for ESPP purchase rights during a period is based on the estimated purchase rights as of the grant date. The Company accounts for forfeitures as they occur. The following table provides the weighted average fair value of options granted to employees and the related assumptions used in the Black-Scholes option pricing model for the nine months ended September 30, 2023 and 2022:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, | ​
​ | ​ | ​ | 2023 |  | ​ | ​ | 2022 |
Weighted average fair value of options granted |  | $ | 10.59 | ​ | ​ | $ | 4.56 | ​
Expected term (in years) — non-officer employees |  | ​ | 5.5 to 6.1 | ​ | ​ | ​ | 5.5 to 6.1 | ​
Expected term (in years) — officer employees |  | ​ | 2.5 to 6.1 | ​ | ​ | ​ | 3.2 to 6.1 | ​
Expected volatility |  | ​ | 77.2% to 79.6 | % | ​ | ​ | 56.3% to 58.6 | %
Expected dividend yield |  | ​ | — | % | ​ | ​ | — | %
Risk-free interest rate |  | ​ | 3.40% to 4.61 | % | ​ | ​ | 1.75% to 3.97 | %
​ ​ The following table provides the weighted average fair value of ESPP purchase rights and the related assumptions used in the Black-Scholes option pricing model for the nine months ended September 30, 2023 and 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30, | ​
​ | ​ | ​ | 2023 |  | ​ | ​ | 2022 | ​
Weighted average fair value per ESPP purchase right |  | $ | 9.01 | ​ | ​ | $ | 2.85 | ​
Expected term (in years) |  | ​ | 0.5 | ​ | ​ | ​ | 0.5 | ​
Expected volatility |  | ​ | 76.2% to 84.6 | % | ​ | ​ | 51.3% to 62.9 | %
Expected dividend yield |  | ​ | — | % | ​ | ​ | — | %
Risk-free interest rate |  | ​ | 4.77% to 5.53 | % | ​ | ​ | 0.22% to 2.52 | %
​ The Company reviews these assumptions on a periodic basis and adjusts them, as necessary. The expected term of a stock option award was determined based on the Company’s analysis of historical exercise behavior while taking into consideration various participant demographics and option characteristics. The expected term of an ESPP purchase right is based on the offering period. We utilize the simplified method to develop the estimate of the expected term. The expected volatility is based upon observed volatility of comparable public companies. The expected dividend yield is assumed to be zero, as the Company has never paid dividends and has no current plans to do so. The risk-free interest rate is based on the yield on U.S. Treasury securities for a period approximating the expected term of the options being valued. The following table presents the components and classification of stock-based compensation expense for the periods indicated:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Nine months ended
​ |  | September 30, |  | September 30,
(in thousands) | ​ | 2023 | ​ | 2022 | ​ | 2023 | ​ | 2022
Stock options | ​ | $ | 1,419 | ​ | $ | 866 | ​ | $ | 4,403 | ​ | $ | 2,657
Employee Stock Purchase Plan | ​ | ​ | 113 | ​ | ​ | 63 | ​ | ​ | 310 | ​ | ​ | 165
Total stock-based compensation expense | ​ | $ | 1,532 | ​ | $ | 929 | ​ | $ | 4,713 | ​ | $ | 2,822
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Selling, general & administrative | ​ | $ | 1,290 | ​ | $ | 785 | ​ | $ | 3,728 | ​ | $ | 2,402
Research & development | ​ | ​ | 221 |  | ​ | 132 | ​ | ​ | 927 |  | ​ | 367
Cost of goods sold | ​ | ​ | 21 |  | ​ | 12 | ​ | ​ | 58 |  | ​ | 53
​ | ​ | $ | 1,532 | ​ | $ | 929 | ​ | $ | 4,713 | ​ | $ | 2,822
​ As of September 30, 2023, unrecognized compensation expense related to unvested stock-based compensation arrangements was $14.1 million. As of September 30, 2023, the related weighted average period over which the expense is expected to be recognized is approximately 2.5 years.

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