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Stock-Based Compensation
3 Months Ended
Mar. 31, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation

12. Stock-Based Compensation

In February 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan is the successor to and continuation of the Second Amended and Restated 2012 Stock Plan (the “2012 Plan”) and the 2015 Consultant Stock Plan (the “2015 Plan”) and is administered with either stock options or restricted stock units. The Board of Directors administers the plans. Upon adoption of the 2018 Plan, no new stock options or awards are issuable under the 2012 Plan, as amended, or the 2015 Plan. The 2018 Plan also provides for other types of equity to issue awards, which at this time the Company does not plan to utilize. The 2018 Plan was amended in March 2019 with 1.1 million shares available for future grant.

In December 2019, the Company adopted the Second Amended and Restated 2018 Equity Incentive Plan, which increased the number of shares available for future grant to 2.7 million shares. On March 4, 2020, the Board of Directors adopted the Third Amended and Restated 2018 Equity Incentive Plan (the “2018 Third Amended Plan”), which increased the number of shares available for future grant to a total of 7,615,733 shares and was approved by stockholders on March 5, 2020. As of March 31, 2021, the number of shares available for grant under the 2018 Third Amended Plan was 5,970,439. The 2018 Third Amended Plan provides for automatic annual increase in the number of shares of common stock reserved for issuance, which resulted in an additional 4,537,676 shares reserved for future issuance effective January 1, 2021.

Stock Options

The following table summarizes stock option activity under the 2012 Plan, the 2015 Plan, and the 2018 Third Amended Plan during the three months ended March 31, 2021(in thousands, except share and per share data):

 

 

 

Stock Options

Outstanding

 

 

Weighted-

Average

Exercise Price

 

 

Weighted-

Average

Remaining

Contractual

Term

(in years)

 

 

Aggregate

Intrinsic

Value

 

Balance at December 31, 2020

 

 

4,268,945

 

 

$

8.14

 

 

 

 

 

 

 

 

 

Options granted

 

 

1,563,980

 

 

 

4.75

 

 

 

 

 

 

 

 

 

Options exercised

 

 

(71,284

)

 

 

1.23

 

 

 

 

 

 

 

 

 

Options forfeited/cancelled

 

 

(30,434

)

 

 

8.10

 

 

 

 

 

 

 

 

 

Options expired

 

 

(158,566

)

 

 

10.64

 

 

 

 

 

 

 

 

 

Balance at March 31, 2021

 

 

5,572,641

 

 

$

7.21

 

 

 

8.38

 

 

$

1,641,876

 

Vested and expected to vest at March 31, 2021

 

 

5,572,641

 

 

$

7.21

 

 

 

8.38

 

 

$

1,641,876

 

Vested and exercisable at March 31, 2021

 

 

1,745,153

 

 

$

8.42

 

 

 

6.22

 

 

$

1,218,907

 

 

 

As of March 31, 2021, the number of shares available for grant under the 2018 Third Amended Plan was 5,970,439.

The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date. The following table sets forth the assumptions used to determine the fair value of stock options granted during the three months ended March 31, 2021:

 

 

 

Three Months Ended

March 31, 2021

 

Risk-free interest rate

 

0.6% - 1.1%

 

Expected volatility

 

67.8% - 69.9%

 

Expected dividend yield

 

 

 

Expected life (years)

 

3.0 - 6.3 years

 

 

Restricted Stock Units

The following table summarizes restricted stock unit activity for the three months ended March 31, 2021:

 

 

 

Number of Shares

 

 

Weighted-

Average Grant

Date Fair Value

 

Balance at December 31, 2020

 

 

1,468,765

 

 

$

8.73

 

Granted

 

 

97,219

 

 

4.93

 

Vested

 

 

(174,730

)

 

 

10.70

 

Forfeited/cancelled

 

 

(16,775

)

 

8.24

 

Balance at March 31, 2021

 

 

1,374,479

 

 

$

8.22

 

 

2020 Employee Stock Purchase Plan

In June 2020, the Company’s board of directors adopted the ESPP. At December 31, 2020, 510,000 shares of common stock were reserved for future issuance under the ESPP. The ESPP also provides for automatic annual increases in the number of shares of common stock reserved for issuance, which resulted in an additional 557,723 shares reserved for future issuance effective January 1, 2021 and 1,067,723 total shares of common stock reserved for future issuance at March 31, 2021. The Company commenced a series of offerings under the ESPP on December 1, 2020. The initial offering began December 1, 2020, ends on November 30, 2022 (unless terminated earlier, as described below) and consists of four purchase periods. The purchase periods end on the last trading day of May and November of each year. Eligible employees who enroll in the initial offering or any subsequent offering will be able to purchase shares of the Company’s common stock at a discount through payroll deductions, subject to certain limitations. The purchase price of the shares of common stock will be the lesser of (i) 85% of the fair market value of such shares on the offering date and (ii) 85% of the fair market value of such shares on the purchase date. Following the commencement of the initial offering, a new 24-month offering with four six-month purchase periods will automatically begin approximately every six months thereafter over the term of the ESPP. Offerings will be concurrent, but in the event the fair market value of a share of common stock on the first day of any purchase period during an offering (the “New Offering”) is less than or equal to the fair market value of a share of common stock on the offering date for an ongoing offering (the “Ongoing Offering”), then the Ongoing Offering terminates immediately following the purchase of shares on the purchase date immediately preceding the New Offering and the participants in the terminated Ongoing Offering are automatically enrolled in the New Offering. Notwithstanding the above, the Company’s board of directors (or an authorized committee thereof) may modify the terms of or suspend any future offerings prior to their commencement. The Company issues new shares for purchases of stock made pursuant to the ESPP.

 

Stock-Based Compensation Expense

 

The following table presents total stock-based compensation expense included in each functional line item in the accompanying condensed consolidated statements of operations (in thousands):

 

 

 

Three Months Ended

March 31,

 

 

 

2021

 

 

2020

 

Cost of sales

 

$

142

 

 

$

228

 

Research and development

 

 

624

 

 

 

662

 

Selling and marketing

 

 

390

 

 

 

373

 

General and administrative

 

 

1,474

 

 

 

794

 

Total stock-based compensation expense

 

$

2,630

 

 

$

2,057

 

 

The weighted-average grant date fair value of options granted during the three months ended March 31, 2021 and 2020 was $2.95 per option and $6.29 per option, respectively. At March 31, 2021 and December 31, 2020, there was $15.6 million and $12.8 million, respectively, of compensation cost related to unvested stock options expected to be recognized over a remaining weighted average vesting period of 2.17 and 2.93 years, respectively.