In 2010, the Company adopted the 2010 Equity Incentive Plan and later amended it in 2014, 2017 and 2018 (the Amended 2010 Plan). The Amended 2010 Plan was terminated in August 2019 and remains in effect as to outstanding equity awards granted prior to the date of expiration. No new awards may be made under the Amended 2010 Plan.

In August 2019, the Company’s stockholders approved the 2019 Stock Incentive Plan (the 2019 Plan), and it replaced the Amended 2010 Plan. The 2019 Plan authorizes the board of directors or the compensation committee of the board of directors to grant a broad range of awards including stock options, stock appreciation rights, restricted stock, performance-based awards, and restricted stock units. Under the 2019 Plan, 182,500 shares were initially reserved for issuance.

In November 2021, in connection with the approval of the Arrangement, the Company’s stockholders approved an amendment increasing the number of shares reserved for issuance under the 2019 Plan by 3,106,937 shares.

Under the 2019 Plan, the term of all incentive stock options granted to a person who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of the Company’s stock may not exceed five years. The exercise price of stock options granted under the 2019 Plan must be at least equal to the fair market value of the shares on the date of grant. Generally, awards under the 2019 Plan will vest over a three to four-year period, and options will have a term of 10 years from the date of grant. In addition, the 2019 Plan provides for automatic acceleration of vesting for options granted to non-employee directors upon a change of control of the Company.

In connection with the Arrangement, the Company assumed the Peraso Technologies Inc. 2009 Share Option Plan (the 2009 Plan) and all outstanding options granted pursuant to the terms of the 2009 Plan. Each outstanding, unexercised and unexpired option under the 2009 Plan, whether vested or unvested, was assumed by the Company and converted into options to purchase shares of the Company’s common stock and became exercisable by the holder of such option in accordance with its terms, with (i) the number of shares of common stock subject to each option multiplied by the Exchange Ratio and (ii) the per share exercise price upon the exercise of each option divided by the Exchange Ratio. In connection with the Arrangement, no further awards will be made under the 2009 Plan

The 2009 Plan, the Amended 2010 Plan and the 2019 Plan are referred to collectively as the “Plans.”

At December 31, 2021, the unamortized compensation cost was approximately $12.2 million related to stock options and is expected to be recognized as expense over a weighted average period of approximately 3.5 years. The unamortized compensation cost, at December 31, 2021, was $0.1 million related to restricted stock units and is expected to be recognized as expense over a weighted average period of approximately 1.8 years. For the years ended December 31, 2021 and 2020, the fair value of options and awards vested was approximately $1.0 million and $0.3 million, respectively.

The fair value of the Company’s share-based payment awards for the years ended December 31, 2021 and 2020 was estimated on the grant dates using the Black-Scholes model with the following assumptions:

The risk-free interest rate was derived from the Daily Treasury Yield Curve Rates as published by the U.S. Department of the Treasury as of the grant date for terms equal to the expected terms of the options. The expected volatility was based on the historical volatility of the Company’s stock price over the expected term of the options. The expected term of options granted was derived from historical data based on employee exercises and post-vesting employment termination behavior. A dividend yield of zero is applied because the Company has never paid dividends and has no intention to pay dividends in the near future.

In accordance with ASU No. 2016-09, the Company accounts for forfeitures as they occur.

A summary of stock option activity under the Plans is presented below (in thousands, except exercise price):

	Options outstanding
				Weighted
				Average
	Number of			Exercise
	Shares			Prices
Balance as of January 1, 2020		467		$	8.20
Options granted		845		$	2.65
Options cancelled and returned to the Plans		(254	)	$	6.85
Options exercised		(5	)	$	1.77
Balance as of December 31, 2020		1,053		$	2.54
Options granted		409		$	3.00
Options exercised		(42	)	$	2.72
Options cancelled and returned to the Plans		(20	)	$	1.72
Effect of business combination		158		$	10.35
Balance as of December 31, 2021		1,558		$	3.49

As of December 31, 2021, the Company had approximately 3.0 million shares available for grant.

A summary of RSU activity under the Plans is presented below (in thousands, except fair value):

				Weighted
				Average
	Number of			Grant-Date
	Shares			Fair Value
Non-vested shares as of December 31, 2020		—		$	0.00
Granted		30		$	5.07
Vested		(10	)	$	4.21
Effect of business combination		68		$	4.21
Non-vested shares as of December 31, 2021		88		$	4.50

The following table summarizes significant ranges of outstanding and exercisable options at December 31, 2021 (in thousands, except contractual life and exercise price):

	Options Outstanding						Options Exercisable
			Weighted
			Average
			Remaining		Weighted				Weighted
			Contractual		Average				Average		Aggregate
	Number		Life		Exercise		Number		Exercise		Intrinsic
Range of Exercise Price	Outstanding		(in Years)		Price		Exercisable		Price		value
$1.57 - $14.99		1,542		6.64	$	2.67		552	$	2.55	$	908
$15.00 - $25.59		8		1.78	$	15.00		8	$	15.00	$	—
$25.60 - $143.99		2		3.62	$	40.15		2	$	41.81	$	—
$144.00 - $409.99		5		4.69	$	144.00		5	$	144.00	$	—
$410.00 - $924.00		1		3.05	$	410.00		1	$	430.64	$	—
$1.57 - $924.00		1,558			$	3.49		568	$	4.71	$	908

There were approximately 20,000 and 5,000 options exercised during the years ended December 31, 2021 and 2020, respectively.