Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Stockholders' Equity

10. Stockholders’ Equity

Preferred stock

The Amended and Restated Certificate of Incorporation authorizes the Company to issue up to 15,000,000 shares of $0.001 par value preferred stock.

Common stock

The Amended and Restated Certificate of Incorporation authorizes the Company to issue up to 300,000,000 shares of $0.001 par value common stock.

Private Placement

On December 27, 2022, the Company entered into a Purchase Agreement and agreed to sell an aggregate of 146,627,565 shares of the Company’s common stock. On February 9, 2023, the Private Placement closed and the Company issued the shares.

Common stock warrants

As of March 31, 2023, the Company`s outstanding warrants to purchase shares of common stock, consisted of the following:

Issuance Date	Number of Shares of Common Stock Issuable		Exercise Price		Classification	Expiration Date
May 9, 2017		33,964	$	11.31	Equity	May 8, 2027
July 19, 2019		43,878	$	11.31	Equity	July 18, 2029
		77,842

Shares reserved for future issuance

The Company has shares of common stock reserved for future issuances as follows:

	March 31,	December 31,
	2023	2022
Warrants to purchase common stock	77,842	77,842
Common stock options issued and outstanding	27,056,747	2,290,596
Common stock available for future grants	13,557,722	374,099
Restricted stock units issued and outstanding	871,792	1,247,059
Common stock available for ESPP	3,541,141	62

2008 Stock Plan and 2021 Equity Incentive Plan, as amended (the 2021 and 2008 Plan)

A summary of stock option activity is set forth below (in thousands, except share and per share data):

	Number of Shares Underlying Outstanding Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding, December 31, 2022	2,290,596	$	8.33	8.0	$	1
Options granted	24,921,277	$	0.28
Options exercised	(6)	$	0.61
Options forfeited or cancelled	(155,120)	$	7.32
Outstanding, March 31, 2023	27,056,747	$	0.92	9.7	$	1
Shares exercisable March 31, 2023	1,506,339	$	8.86	6.0	$	-
Vested and expected to vest, March 31, 2023	27,056,747	$	0.92	9.7	$	1

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock for stock options that were in-the-money as of March 31, 2023 and December 31, 2021. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2023 and 2022 was de minimis.

The total fair value of options that vested during the three months ended March 31, 2023 and 2022 was $0.8 million and $1.0 million, respectively. The options granted during the three months ended March 31, 2023 and 2022 had a weighted-average per share grant-date fair value of $0.20 per share and $3.50 per share, respectively. As of March 31, 2023, the total unrecognized stock-based compensation expense related to unvested stock options was $8.6 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.3 years.

Early exercise of stock options

The terms of the 2008 Plan permit the exercise of certain options granted under the 2008 Plan prior to vesting, subject to required approvals. The shares are subject to the Company’s lapsing repurchase right upon termination of employment at the original purchase price. The proceeds initially are recorded in accrued current liabilities from the early exercise of stock options and are reclassified to additional paid-in capital as the Company’s repurchase right lapses. During the three months ended March 31, 2023 and 2022, the Company had no repurchases of common stock. As of March 31, 2023 and December 31, 2022, there were 140,413 shares and 188,025 shares that were subject to repurchase, respectively. The aggregate exercise prices of early exercised shares as of March 31, 2023 and December 31, 2022 were $0.1 million and $0.1 million, respectively, which were recorded in other current liabilities on the balance sheets.

Restricted Stock Units

A summary of RSU activity is set forth below:

	Number of Shares Underlying Outstanding Restricted Stock			Weighted Average Grant Date Fair Value
Unvested, December 31, 2022		1,247,059		$	2.58
Released		(356,487	)	$	2.58
Forfeited or cancelled		(18,780	)	$	2.63
Unvested, March 31, 2023		871,792		$	2.58

As of March 31, 2023, the total unrecognized stock-based compensation expense related to unvested restricted stock units was $1.7 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.8 years.

2021 Employee Stock Purchase Plan, as amended (ESPP)

The fair value of the predicted share purchase rights granted under the ESPP upon the commencement of the offering period was estimated on the date of grant using the Black-Scholes option pricing model applying the following assumptions as of December 1, 2022, the current offering period's commencement date: (i) risk-free interest rate 4.61%, (ii) dividend rate 0%, (iii) expected terms 0.5 year and 1.0 year, and (iv) volatility 77.21% and 76.29%, for the two tranches, respectively.

Compensation expense of less than $0.1 million was recorded into the condensed statement of operations for the three-months ended March 31, 2023.

As of March 31, 2023, the total unrecognized compensation cost related to the ESPP tranches was immaterial, which will be amortized for the two tranches over weighted-average periods of approximately 0.5 years.

Stock-based compensation associated with awards to employees and non-employees

Total stock-based compensation expense recognized was as follows (in thousands):

	Three Months Ended March 31,
	2023		2022
Cost of goods sold	$	43	$	69
Sales and marketing		645		591
Research and development		8		14
General and administrative		578		849
Total	$	1,274	$	1,523

The above stock-based compensation expense related to the following equity-based awards (in thousands):

	Three Months Ended March 31,
	2023		2022
Stock options	$	825	$	1,026
RSU		425		497
ESPP		24		—
Total	$	1,274	$	1,523

The Company estimated the fair value of stock options using the Black-Scholes option-pricing model. The fair value of stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of stock options was estimated using the following weighted-average assumptions:

	Three Months Ended March 31,
	2023		2022
Expected dividends		0%		0%
Expected volatility		77.8		70.8%
Risk-free interest rate		4.2%		1.9%
Expected term		6 years		6 years