In 2011, the Company established its 2011 stock option plan (the “2011 Plan”) that provides for the granting of stock options to employees and nonemployees of the Company. Under the 2011 Plan, the Company had the ability to issue incentive stock options (ISOs), nonqualified stock options (NSOs), stock appreciation rights, dividend equivalent rights, restricted stock awards, and restricted stock unit awards. Options under the 2011 Plan may be granted for periods of up to 10 years. For incentive stock option granted to a grantee who, at the time the option is granted, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any parent or subsidiary of the Company, the term of the incentive stock option may be granted for periods of up to five years. The ISOs and NSOs will be granted at a price per share not less than the fair value at the date of grant. The exercise price of an ISO granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the shares on the date of grant, as determined by the board of directors. Options granted to new hires generally vest over a four-year period, with 25% vesting at the end of one year and the remaining vesting monthly thereafter; options granted as merit awards generally vest monthly over a four-year period.

At June 30, 2021 and December 31, 2020, there were 240,860 shares and 451,670 shares, respectively, of common stock available for issuance under the 2011 Plan.

The following tables summarize the Company’s stock option activity for the three months ended June 30, 2021:


				Options Outstanding
	Shares Available for Grant			Number of Options			Weighted-Average Exercise Price		Weighted-Average Contractual Term (in years)		Average Intrinsic Value (in thousands)
Balances as of December 31, 2020		451,670			3,137,776		$	0.94		6.8	$	18,656
Additional shares reserved		2,060,000
Options granted		(2,339,000	)		2,339,000			10.56
Options forfeited/cancelled		68,190			(68,190	)		2.21
Options exercised					(222,850	)		0.94
Balances as of June 30, 2021		240,860			5,185,736		$	5.26		7.8	$	39,934
Vested and exercisable as of June 30, 2021					1,841,606		$	0.75		5.0	$	18,337
Vested and expected to vest as of June 30, 2021					5,155,736		$	5.29		8.0	$	39,625

The weighted-average grant-date fair values of options granted during the six months ended June 30, 2021 and 2020 was $10.42 and $1.57 per share, respectively. The aggregate intrinsic value of options exercised were $3.3 million during the six months ended June 30, 2021. The aggregate intrinsic value was calculated as the difference between the exercise prices of the underlying options and the estimated fair value of the common stock on the date of exercise. As of June 30, 2021, the unrecognized stock-based compensation of unvested options was $25.6 million, which is expected to be recognized over a weighted-average period of 3.8 years.

The Company estimated the fair value of stock options using the Black-Scholes option-pricing model. The fair value of stock options is recognized on a straight-line basis over the requisite service periods of the awards. The fair value of stock options was estimated using the following weighted-average assumptions:


	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Expected term (in years)	5.74 – 6.18	5.85 – 6.08	4.99 – 6.18	5.85 – 6.08
Expected volatility	59.9% – 61.1%	53.9% – 54.7%	56.7% – 61.1%	48.3% – 54.7%
Risk-free interest rate	0.95% – 1.05%	0.33% – 0.56%	0.48% – 1.05%	0.33% – 1.77%
Dividend yield	–	–	–	–

The expected term is calculated using the simplified method, which is available if there is insufficient historical data about exercise patterns and post vesting employment termination behavior. The simplified method is based on the vesting period and the contractual term for each grant or for each vesting tranche for awards with graded vesting. The midpoint of the vesting date and the maximum contractual expiration date is used as the expected term under this method. For awards with multiple vesting tranches, the time from grant until the midpoints for each of the tranches may be averaged to provide an overall expected term.

The Company used an average historical stock price volatility of a peer group of publicly traded companies to be representative of its expected future stock price volatility, as the Company did not have any trading history for its common stock. For purposes of identifying these peer companies, the Company considered the industry, stage of development, size, and financial leverage of potential comparable companies. For each grant, the Company measured historical volatility over a period equivalent to the expected term.

The risk-free interest rate is based on the implied yield currently available on US Treasury zero-coupon issues with remaining terms equivalent to the expected term of a stock award.

The Company has not paid, and does not anticipate paying, any dividends in the near future. Accordingly, the Company has estimated the dividend yield to be 0%.

The following is a summary of stock-based compensation expense by function (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cost of goods sold	$	17	$	4	$	24	$	5
Research and development		101		14		138		23
Selling, general and administrative		813		47		1,046		98
Total stock-based compensation expense	$	931	$	65	$	1,208	$	126