Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

Note 10. Stock-Based Compensation

Shares of common stock reserved for issuance under the Company’s equity incentive plans were as follows:

	March 31, 2024
Outstanding stock awards		9,261,193
Reserved for future award grants		5,528,052
Reserved for future ESPP		583,756
Total common stock reserved for stock awards		15,373,001

Service-Based Stock Option Activity

A summary of the Company’s service-based stock option activity (excluding performance-based stock option activity, which is presented separately below) for the three months ended March 31, 2024 is as follows:

	Outstanding Service-Based Options
(in thousands, except share and per share data)	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Balance—December 31, 2023		5,805,586		$	7.40		6.90	$	64
Options granted		2,400,500			1.59
Options exercised		—			—
Options forfeited or expired		(256,904	)		7.60
Balance—March 31, 2024		7,949,182		$	5.64		7.85	$	46
Options vested and exercisable as of March 31, 2024		3,321,228		$	9.62		5.72	$	—

The weighted-average grant date fair value of options granted was $1.61 and $1.91 per share for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the unrecognized stock-based compensation cost of unvested options was $7.9 million, which is expected to be recognized over a weighted-average period of 2.3 years.

Valuation of Service-Based Stock Options

The Company estimated the fair value of service-based stock options using the Black-Scholes option-pricing model. Fair value of stock options is recognized as compensation expense on a straight-line basis over the requisite service periods of the awards. Fair value of stock options was estimated using the following range of assumptions:

	Three Months Ended March 31,
	2024	2023
Expected term (in years)	5.50 - 6.08	5.77
Volatility	72.63 - 80.28%	78.98%
Risk-free interest rate	3.88 - 4.33%	3.58%
Dividend yield	–%	–%

Performance-Based Stock Option Activity

During 2024, the Company granted performance-based stock options ("PSOs") to the executive leadership team. Vesting of the PSOs is based upon attainment of certain Medicare reimbursement coverages by the end of 2025 and subject to continuous service by the executives. Fair value was estimated using the Black-Scholes option-pricing model. Total grant-date fair value of the PSOs was $0.3 million.

A summary of the Company's performance-based stock option activity for the three months ended March 31, 2024 is as follows:

	Outstanding Performance-Based Options
(in thousands, except share and per share data)	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Balance—December 31, 2023		—	$	—		—	$	—
Options granted		264,500		1.61
Balance—March 31, 2024		264,500	$	1.61		9.96	$	—
Options vested and exercisable as of March 31, 2024		—

Restricted Stock Units ("RSU") Activity and Valuation

A summary of the Company’s RSU activity for the three months ended March 31, 2024 is as follows:

	Unvested Restricted Stock Units
(in thousands, except share and per share data)	Number of Shares			Weighted- Average Grant Date Fair Value		Aggregate Fair Value
Balance—December 31, 2023		1,253,826		$	8.99	$	2,633
RSUs granted		—			—
RSUs vested		(33,505	)		26.87		49
RSUs forfeited		(172,810	)		9.45
Balance—March 31, 2024		1,047,511		$	8.34	$	1,561

As of March 31, 2024, the unrecognized stock-based compensation cost of unvested RSUs was $6.4 million, which is expected to be recognized over a weighted-average period of 1.6 years.

ESPP Activity and Valuation

During the three months ended March 31, 2024 and 2023, no shares of common stock were purchased under the Employee Stock Purchase Plan ("ESPP"). Additionally, no stock purchase rights were granted during either period.

Stock-Based Compensation Expense

The following is a summary of stock-based compensation expense by award type (in thousands):

	Three Months Ended March 31,
	2024		2023
Service-based stock options	$	1,215	$	1,343
Performance-based stock options		6		—
RSUs		1,408		2,123
ESPP		58		229
Total stock-based compensation expense	$	2,687	$	3,695

The following is a summary of stock-based compensation expense by function (in thousands):

	Three Months Ended March 31,
	2024		2023
Cost of revenue	$	154	$	490
Research and development		947		1,245
Selling, general and administrative		1,586		1,960
Total stock-based compensation expense	$	2,687	$	3,695