STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2022

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 Equity Incentive Plan (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. A total of 21,062,853 shares of our Class A common stock have been reserved for issuance under the 2021 Plan. 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. Additionally, to the extent that any stock options outstanding under the 2015 Plan expire, terminate prior to exercise, are not issued because the award is settled in cash, are forfeited because of the failure to vest, or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price, if any, the shares of Class B common stock reserved for issuance pursuant to such equity awards will become available for issuance as shares of Class A common stock under the 2021 Plan. 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 4,402,757 shares of our Class A common stock have been reserved for 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 our 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 ended on May 2, 2022. The second offering period began on May 3, 2022 and will end on November 2, 2022.

A summary of the status of the 2015 Plan and 2021 Plan as of December 31, 2021 and March 31, 2022, and changes during the three month period ended March 31, 2022, 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, 2021	16,370,673	$	4.23	7.70	$	177,593
Granted	283,608	10.92
Exercised	(1,346,038)	1.09			8,629
Forfeited	(208,288)	4.69
Cancelled	(11,478)	3.37
Outstanding at March 31, 2022	15,088,477	4.63		7.11	31,231
Vested and exercisable at March 31, 2022	7,407,011	2.92		5.67	23,316
Unvested at March 31, 2022	7,681,466	$	6.28	7.91	$	31,231

Stock-based compensation expense, included in selling, general, and administrative expense in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021, was comprised of the following:


	Three Months Ended March 31,
(in thousands)	2022		2021
Stock-based compensation expense, net of amounts capitalized	$	3,560	$	1,684
Capitalized stock-based compensation expense	261		—
Total stock-based compensation expense	$	3,821	$	1,684

As of March 31, 2022, there was approximately $24.3 million of total unrecognized compensation cost related to unvested stock options granted under both equity incentive plans. The remaining unrecognized compensation cost is expected to be recognized over the weighted-average remaining vesting period of approximately 2.25 years.

The weighted-average fair value of options granted during the three months ended March 31, 2022 and 2021 was $0.46 and $2.23 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 three months ended March 31, 2022 and 2021, for employees and non-employees:

Employees and Non-employees—


	Three Months Ended March 31,
	2022			2021
Risk-free interest rate	1.98		%	0.89		%
Dividend yield	—			—
Volatility	47.14		%	52.04		%
Expected lives (years)	6.1			5.9
Fair value of common stock	$	10.92		$	4.58

2021 ESPP

The following table summarizes the weighted-average assumptions used in estimating the fair value of the 2021 ESPP grants for the offering period beginning on November 3, 2021, using the Black Scholes option-pricing model:


	March 31, 2022
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, we 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 three months ended March 31, 2022 was as follows:


	Number of Shares	Weighted-Average Grant Date Fair Value per Share
Unvested at December 31, 2021	160,227	$	22.33
Granted	628,991	7.70
Vested	—	—
Forfeited	(3,085)	19.64
Cancelled	—	—
Unvested at March 31, 2022	786,133	$	10.63

As of March 31, 2022, there was approximately $7.7 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 3.30 years.