STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2022

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

5. Stock-Based Compensation

Stock-based compensation for the periods presented was as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Selling, general and administrative	$	2,739	$	2,053
Research and development		468		586
Total stock-based compensation expense	$	3,207	$	2,639

In March 2022, our Board of Directors approved to extend the exercise period of the stock option grants made to two members of our Board of Directors whose terms will expire in the next stockholders’ meeting in May 2022. As a result of this modification, we recorded an incremental stock-based compensation expense of approximately $0.8 million during the three months ended March 31, 2022. The amount was included within selling, general and administrative expense in the condensed statement of operations.

During the three months ended March 31, 2022, we granted stock options to purchase 4,470,747 shares of common stock with weighted-average grant-date fair value of $1.58 per share, and 420,521 stock options were exercised. As of March 31, 2022, there were 32,639,145 stock options outstanding, of which, 2,410,000 are outstanding performance-based stock options wherein the achievement of the corresponding corporate-based milestones were not considered probable as of March 31, 2022. Accordingly, none of the $4.7 million grant date fair value for these awards has been recognized as stock-based compensation expense through March 31, 2022.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The following table summarizes the weighted-average assumptions relating to options granted pursuant to our Equity Incentive Plans (2018 Equity Incentive Plan and Inducement Plan) for the periods presented:

	Three Months Ended March 31,
	2022		2021
Risk-free interest rate	1.7	%	1.0	%
Expected term (in years)	6.4		6.5
Dividend yield	0.0	%	0.0	%
Expected volatility	70.0	%	70.6	%

During the three months ended March 31, 2022, we granted 1,012,612 restricted stock units (RSUs) with a grant-date weighted-average fair value of $2.42 per share, and 22,500 RSUs were released. The RSUs granted generally vest over 4 years. As of March 31, 2022, there were 1,206,182 RSUs outstanding.

As of March 31, 2022, there was approximately $19.4 million of unrecognized stock-based compensation which is expected to be recognized over a remaining weighted-average period of 3.04 years related to time-based stock options, RSUs and performance-based stock options where achievement of the corresponding corporate-based milestones was considered probable as of March 31, 2022.

In September 2021 and January 2022, our Board of Directors approved increases of 469,000 shares and 610,000 shares, respectively, in common stock reserved for issuance under the Inducement Plan which became effective following the filing of a Registration Statement to register the additional shares available for issuance on March 1, 2022. As of March 31, 2022, there were 7,130,256 shares of common stock available for future grant under our Equity Incentive Plans.

In April 2022, our Board of Directors approved the increase of 626,000 shares of common stock reserved for issuance under the Inducement Plan.

Employee Stock Purchase Plan

Our Purchase Plan permits our eligible employees to purchase common stock at a discount through payroll deductions during the offering period. Our Purchase Plan provides for a twenty-four-month offering period comprised of four six-month purchase periods with a look-back option. A look-back option is a provision in our Purchase Plan under which eligible employees can purchase shares of our common stock at a price per share equal to the lesser of 85% of the fair market value on the first day of the offering period or 85% of the fair market value on the purchase date. Our Purchase Plan also includes a feature that provides for a new offering period to begin when the fair market value of our common stock on any purchase date during an offering period falls below the fair market value of our common stock on the first day of such offering period. This feature is called a “reset.” Participants are automatically enrolled in the new offering period.

Our existing twenty-four-month offering period under our Purchase Plan is from July 1, 2020 to June 30, 2022. As of March 31, 2022, the unrecognized stock-based compensation cost related to our Purchase Plan was $0.05 million, which is expected to be recognized over the remaining weighted average period of 0.24 years.

As of March 31, 2022, there were 4,584,484 shares reserved for future issuance under the Purchase Plan.