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Stock-Based Compensation
3 Months Ended
Mar. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation

Note 7. Stock-Based Compensation

On December 4, 2014, the Company’s stockholders approved the 2014 Stock Plan (“2014 Plan”) and amended the 2014 Plan on April 25, 2019.  The 2014 Plan was amended, restated and re-named the 2019 Equity Incentive Plan (the “2019 Plan”), which became effective as of May 7, 2019, the day prior to the effectiveness of the registration statement filed in connection with the IPO. The remaining shares available for issuance under the 2014 Plan were added to the shares reserved for issuance under the 2019 Plan.

The 2019 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, RSUs, performance units, and performance shares to the Company’s employees, directors, and consultants.  The maximum aggregate number of shares that may be issued under the 2019 Plan is 5,131,549 shares of the Company’s common stock. In addition, the number of shares available for issuance under the 2019 Plan will be increased annually on the first day of each of its fiscal years beginning with fiscal 2020, by an amount equal to the least of (i) 2,146,354 shares of common stock; (ii) 4% of the outstanding shares of its common stock as of the last day of its immediately preceding fiscal year; and (iii) such other amount as the Companys Board of Directors may determine.

The 2019 Plan may be amended, suspended or terminated by the Company’s Board of Directors at any time, provided such action does not impair the existing rights of any participant, subject to stockholder approval of any amendment to the 2019 Plan as required by applicable law or listing requirements. Unless sooner terminated by the Company’s Board of Directors, the 2019 Plan will automatically terminate on April 23, 2029.

As of March 31, 2020, the Company had 2,602,312 shares available for future issuance under the 2019 Plan.

For the three months ended March 31, 2020 and 2019, the Company recognized $1,955,000 and $190,000 of stock-based compensation expense, respectively related to options granted to employees and non-employees. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the statements of operations for stock-based compensation arrangements.

 

 

 

Number of

Options and

Unvested

Shares

 

 

Weighted

Average

Exercise Price

 

 

Weighted

average

remaining

contractual

life (years)

 

 

Aggregate

intrinsic

value

 

Balance at December 31, 2019

 

 

2,393,934

 

 

 

5.35

 

 

 

8.62

 

 

$

121,592,682

 

Options granted

 

 

915,000

 

 

 

54.85

 

 

 

 

 

 

 

 

 

Options exercised

 

 

(35,127

)

 

 

5.44

 

 

 

 

 

 

 

 

 

Options cancelled

 

 

(2,757

)

 

 

6.91

 

 

 

 

 

 

 

 

 

Balance at March 31, 2020

 

 

3,271,050

 

 

 

19.19

 

 

 

8.78

 

 

 

94,866,669

 

Options vested and expected to vest as of

   March 31, 2020

 

 

3,271,050

 

 

 

19.19

 

 

 

8.78

 

 

 

94,866,669

 

Options exercisable as of March 31, 2020

 

 

982,101

 

 

 

4.29

 

 

 

7.94

 

 

 

40,746,899

 

 

Future stock-based compensation for unvested employee and non-employee options granted and outstanding as of March 31, 2020 is $40.7 million with a weighted average remaining expense life of 1.9 years.

The following table summarizes employee and non-employee stock-based compensation expense for the three months ended March 31, 2020 and 2019 and the allocation within the statements of operations and comprehensive loss (in thousands):

 

 

 

March 31

 

 

 

2020

 

 

2019

 

General and administrative expense

 

 

$

1,038

 

 

 

$

99

 

Research and development expense

 

 

 

917

 

 

 

 

91

 

Total stock-based compensation

 

 

$

1,955

 

 

 

$

190

 

 

Employee Stock Purchase Plan

On April 24, 2019, the Company’s Board of Directors adopted its 2019 Employee Stock Purchase Plan (“2019 ESPP”), which was subsequently approved by the Company’s stockholders and became effective on May 7, 2019, the day immediately prior to the effectiveness of the registration statement filed in connection with the IPO. The 2019 ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code (the “Code”) for U.S. employees. In addition, the 2019 ESPP authorizes grants of purchase rights that do not comply with Section 423 of the Code under a separate non-423 component for non-U.S. employees and certain non-U.S. service providers. The Company has reserved 536,989 shares of common stock for issuance under the 2019 ESPP. In addition, the number of shares reserved for issuance under the 2019 ESPP will be increased automatically on the first day of each fiscal year for a period of up to ten years, starting with the 2020 fiscal year, by a number equal to the least of: (i) 536,589 shares; (ii) 1% of the shares of common stock outstanding on the last day of the prior fiscal year; or (iii) such lesser number of shares determined by the Company’s Board of Directors. The 2019 ESPP is expected to be implemented through a series of offerings under which participants are granted purchase rights to purchase shares of the Company’s common stock on specified dates during such offerings. The Company has not yet approved an offering under the 2019 ESPP.