STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

2015 Equity Incentive Plan

In 2015, we adopted the 2015 Equity Incentive Plan (the “2015 Plan”) that authorized the granting of options for shares of common stock. Our 2015 Plan provided for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, RSUs, and other stock awards. The 2015 Plan was terminated in connection with the adoption of the 2021 Equity Incentive Plan (the “2021 Plan”) in November 2021 in connection with the IPO, and we will not grant any additional awards under the 2015 Plan. However, the 2015 Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder.

2021 Equity Incentive Plan

In September 2021, our board of directors adopted, and our stockholders approved, the 2021 Plan, which became effective in connection with the IPO in November 2021. The 2021 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, RSU awards, performance awards, and other forms of equity compensation. Initially, the maximum number of shares of our Class A common stock that may be issued under the 2021 Plan will not exceed 32,349,192 shares. In addition, the number of shares of our Class A common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year for a period of 10 years, beginning on January 1, 2022 and continuing through (and including) January 1, 2031, in an amount equal to 4% of the total number of share of our common stock (both Class A and Class B) outstanding on December 31 of the immediately preceding year, except that, before the date of any such increase, our board of directors may determine that the increase for such year will be the lesser number of shares. The maximum number of shares of our Class A common stock that may be issued on the exercise of incentive stock options under the 2021 Plan will be 100,000,000 shares.

2021 Employee Stock Purchase Plan

In September 2021, our board of directors adopted, and our stockholders approved, the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective in connection with the IPO in November 2021. The 2021 ESPP authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees. A total of 2,932,232 shares of the Company’s Class A common stock have been reserved for future issuance under the 2021 ESPP.

The number of shares of our Class A common stock reserved for issuance will automatically increase on January 1 of each year for a period of 10 years, beginning on January 1, 2022 and continuing through (and including) January 1, 2031, by the lesser of (1) 1% of the total number of shares of our common stock (both Class A and Class B) outstanding on December 31 of the immediately preceding year and (2) 2,850,000 shares, except that, before the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth in clauses (1) and (2). The price at which Class A common stock is purchased under the 2021 ESPP is equal to 85% of the fair market value of a share of the Company’s Class A common stock on the first day of the offering period or the date of purchase, whichever is lower. Offering periods are six months long and begin on November 3 and May 3 of each year. The initial offering period began on November 3, 2021 and will end on May 2, 2022. The second offering period will begin on May 3, 2022 and will end on November 2, 2022.

A summary of the status of the 2015 Plan and the 2021 Plan as of December 31, 2021 and 2020, and changes during the years then ended is presented below:


	Options Outstanding
	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value (In Thousands)
Outstanding at December 31, 2020	15,611,571	$	2.75	7.74	$	26,879
Granted	5,037,018	7.18
Exercised	(3,274,745)	1.67			33,991
Forfeited	(898,899)	4.30
Cancelled	(104,272)	4.06
Outstanding at December 31, 2021	16,370,673	$	4.23	7.70	$	177,593
Vested and exercisable at December 31, 2021	7,607,376	2.35		6.61	97,271
Amount expected to vest at December 31, 2021	8,763,297	$	5.87	8.69	$	80,322

As of December 31, 2021, we had authorized the granting of equity awards underlying 14,495,829 shares of our Class A common stock under the 2021 Plan and 14,306,487 shares remained available for issuance under the 2021 Plan. As of December 31, 2020, we had authorized the granting of options for 26,918,466 shares of our common stock under the 2015 Plan and 4,455,401 shares remained available for issuance under the 2015 Plan. Options outstanding at December 31, 2020 have been adjusted from 15,612,071 shares, as previously reported, to 15,611,571 shares to correct a prior period error that was concluded to be immaterial to previously issued financial statements.

Stock-based compensation expense, included in selling, general, and administrative expense in the consolidated statements of operations and comprehensive loss, for the years ended December 31, 2021, 2020, and 2019, was comprised of the following:


(in thousands)	December 31, 2021		December 31, 2020		December 31, 2019
Employee and non-employee stock options	$	9,409	$	6,594	$	4,133
Restricted stock awards relating to founder shares	—		—		113
ESPP	128		—		—
RSUs	207		—		—
	$	9,744	$	6,594	$	4,246

For the years ended December 31, 2021, 2020, and 2019, the aggregate intrinsic value of stock options exercised under both equity incentive plans was $34.0 million, $1.7 million, and $5.5 million, respectively. Aggregate intrinsic value represents the difference between the exercise price of the options and the fair value of our common stock.

As of December 31, 2021, there was approximately $26.8 million of total unrecognized compensation cost related to outstanding unvested stock options under both equity incentive plans. The remaining unrecognized compensation cost is expected to be recognized over the weighted-average remaining vesting period of approximately 2.55 years.

The weighted-average fair value of options granted during the years ended December 31, 2021, 2020, and 2019 was $4.42, $4.80, and $5.64 per share, respectively. We calculated the fair value of each option using an expected volatility over the expected life of the option, which was estimated using the average volatility of comparable publicly traded companies. The expected life of options granted is based on the simplified method to estimate the expected life of the stock options, giving consideration to the contractual terms and vesting schedules. The following weighted average assumptions were used for issuances during the years ended December 31, 2021, 2020, and 2019, for employees and non-employees:

Employees and non-employees—


	December 31, 2021			December 31, 2020			December 31, 2019
Risk-free interest rate	0.98		%	0.97		%	1.69		%
Dividend yield	—			—			—
Volatility	51.43		%	49.49		%	46.63		%
Expected lives (years)	6.1			6.0			6.6
Fair value of common stock	$	7.95		$	4.98		$	5.17

2021 ESPP

The following table summarizes the weighted-average assumptions used in estimating the fair value of the 2021 ESPP grants for the initial offering period using the Black Scholes option-pricing model:


	December 31, 2021
Risk-free interest rate	1.63		%
Dividend yield	—
Volatility	63.00		%
Expected lives (years)	0.6
Fair value of common stock	$	21.04

RSUs

After completion of the IPO in November 2021, the Company began granting RSUs to certain employees. The RSUs granted had service-based vesting conditions. The service-based vesting condition for these awards is typically satisfied over four years, with a cliff vesting period of one year and continued vesting quarterly thereafter. RSUs and the related stock-based compensation are recognized on a straight-line basis over the requisite service period.

RSU activity during the year ended December 31, 2021 was as follows:


	Number of Shares	Weighted-Average Grant Date Fair Value per Share
Unvested at December 31, 2020	—	$	—
Granted	165,333	22.39
Vested	(204)	24.40
Forfeited	(4,902)	24.40
Cancelled	—	—
Unvested at December 31, 2021	160,227	$	22.33

As of December 31, 2021, there was approximately $3.4 million of total unrecognized compensation cost related to outstanding unvested RSUs under the 2021 Plan. The remaining unrecognized compensation cost is expected to be recognized over the weighted-average remaining vesting period of approximately 2.68 years.

Option Repricing—On June 27, 2020, we completed a repricing transaction for certain holders of outstanding options with an exercise price per share greater than $4.12, to an exercise price per share of $4.12. The repricing was accounted for as a modification under ASC 718. The repricing did not make any other changes to the terms of the option awards. We recognized $0.1 million of incremental stock-based compensation expense at the time of the transaction, which related to the vested portion of the shares. The stock-based compensation expense associated with unvested shares is recognized over time as the shares vest. The total incremental stock-based compensation recognized relating to the repricing was $0.3 million and $0.3 million as of December 31, 2021 and 2020.