The Company’s 2017 Equity Incentive Plan (the “2017 Plan”) was approved in June 2017 by the Company’s stockholders. The 2017 plan covers employees, consultants, and nonemployee directors of the Company and provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock awards, performance cash awards, and other stock awards to purchase shares of the Company’s common stock. Options to date have been granted to employees at 100% of the fair value at the date of the grant. The fair value, vesting

period, and expiration dates of the options granted are determined by the Board of Directors at the time of grant. The maximum term of options granted under the 2017 Plan is 10 years from the date of grant. Options generally vest over a period of time, typically not more than 5 years. The plan’s reserve is automatically increased by 4% of the total number of shares outstanding at the prior year end for a period of ten years. Shares subject to awards granted under the 2017 Plan which expire, are repurchased, or are canceled or forfeited will again become available for issuance under the 2017 Plan. The shares available will not be reduced by awards settled in cash or by shares withheld to satisfy tax withholding obligations. Only the net number of shares issued upon the exercise of stock appreciation rights or options exercised by means of a net exercise will be deducted from the shares available under the 2017 Plan.

A summary of the stock option activity under the Company’s 2017 Plan and Prior Plans (collectively, the “Equity Plans”) as of December 31, 2022 is presented below.


	Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding, December 31, 2021	3,482,883	$5.04	8.0 years	$12,307
Options granted	921,063	$4.29
Options exercised	(233,931)	$3.54
Options forfeited	(140,458)	$4.59
Options outstanding, vested and expected to vest, December 31, 2022	4,029,557	$4.97	7.6 years	$20,386
Options exercisable	2,165,916	$4.88	6.7 years	$11,280

The fair value for options under the Equity Plans was estimated at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model requires estimating dividend yield, volatility, risk-free rate of return during the service period and the expected term of the award. The expected dividend yield assumption is based on the Company’s expectation of zero future dividend payouts. The volatility assumption is based on the historical volatilities of the Company’s common stock and of comparable public companies. The risk free rate of return assumption utilizes yields on U.S. treasury zero-coupon bonds with maturity that is commensurate with the expected term for awards issued to employees and the contractual term for awards issued to non-employees. The expected term is derived using the simplified method and represents the weighted average period that the stock awards are expected to remain outstanding.

The fair value of stock option grants has been estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions for the years ended December 31:


	2022	2021
Risk free interest rate	3.3%	1.0%
Expected dividend yield	—%	—%
Estimated volatility	82.8%	81.1%
Expected life	6.0 years	6.1 years

Additional information regarding options is as follows:


	2022	2021
Stock-based compensation cost	$6,783	$6,386
Weighted-average grant date fair value of options granted during the period	$3.07	$4.40
Aggregate intrinsic value of options exercised during the period	$964	$3,494

The aggregate intrinsic value in the table above represents the total pre-tax value of the options shown, calculated as the difference between the Company’s closing stock price on December 31, 2022 and the exercise prices of the options shown,

multiplied by the number of in-the money options. This is the aggregate amount that would have been received by the option holders if they had all exercised their options on December 31, 2022 and sold the shares thereby received at the closing price of the Company’s stock on that date. This amount changes based on the closing price of the Company’s stock.

Unrecognized compensation expense related to unvested options was approximately $5,874 at December 31, 2022, with a weighted-average remaining amortization period of less than 2.5 years.

A summary of the restricted stock unit activity, including performance-based stock units, under the Company’s Equity Plans as of December 31, 2022 is presented below:


	Units	Weighted Average Grant Date Fair Value	Aggregate Intrinsic Value
Restricted stock units outstanding, December 31, 2021	1,194,432	$5.67	$10,069
Restricted stock units granted	1,587,540	$5.32
Restricted stock units released	(414,803)	$5.48
Restricted stock units forfeited	(128,601)	$4.48
Restricted stock units outstanding, December 31, 2022	2,238,568	$5.52	$22,319

In March 2021, the Company awarded 707,278 performance-based restricted stock units to the Company’s chief executive officer in connection with the commencement of his employment. The performance-based restricted stock units vest in four equal tranches upon the achievement of revenue for the trailing four quarters equal to $50,000, $65,000, $80,000, and $95,000. The revenue milestone for the first and second tranche was achieved as of June 30, 2021 and March 31, 2022, respectively.

In August 2021, the Company awarded 80,000 time-based restricted stock units and 120,000 performance-based restricted stock units to the Company’s chief financial officer in connection with the commencement of his employment. The time-based restricted stock units vest in four equal tranches upon completion of each year of employment. The performance-based restricted stock units vest in three equal tranches upon the achievement of revenue for the trailing four quarters equal to $70,000, $90,000, and $110,000. The revenue milestone for the first tranche was achieved as of September 30, 2022.

In May 2022, shares of performance-based restricted stock units for the Company’s chief executive officer that vested were subject to statutory tax withholdings and the compensation committee of the Company’s board of directors authorized the Company to withhold share of common stock to settle the tax obligation, which resulted in a forfeiture of 66,553 shares of performance-based restricted stock units and 110,267 net shares of performance-based restricted stock units being issued during the year ended December 31, 2022.

In August 2022, shares of time-based restricted stock units for the Company’s chief financial officer that vested were subject to statutory tax withholdings and the compensation committee of the Company’s board of directors authorized the Company to withhold shares of common stock to settle the tax obligation, which resulted in a forfeiture of 6,190 shares of time-based restricted stock units and 13,810 net shares of time-based restricted stock units being issued during the year ended December 31, 2022.

In November 2022, shares of performance-based restricted stock units for the Company’s chief financial officer that vested were subject to statutory tax withholdings and the compensation committee of the Company’s board of directors authorized the Company to withhold share of common stock to settle the tax obligation, which resulted in a forfeiture of 15,060 shares of performance-based restricted stock units and 24,940 net shares of performance-based restricted stock units being issued during the year ended December 31, 2022.

Unrecognized compensation expense related to unvested restricted stock units and performance-based stock units was approximately $7,474 and $657, respectively, at December 31, 2022, with a remaining weighted-average amortization period of 2.9 years.