Stock-Based Compensation Plan

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock-based compensation plan

12.Stock-based compensation plan

The following table shows stock option activity during the periods indicated (in thousands except share and per share data):

	Number of options outstanding			Weighted-average exercise price		Weighted-average remaining contractual term (in years)		Aggregate intrinsic value
Balance as of December 31, 2020		6,174,778		$	0.67	7.79		$	11,405
Options granted		4,315,589			12.97
Options exercised		(1,265,730	)		0.50
Options forfeited		(294,726	)		2.58
Options expired		(5,375	)		1.32
Balance as of September 30, 2021		8,924,536		$	6.58		8.31	$	14,597
Options unvested as of September 30, 2021		6,001,978		$	9.55		9.31	$	82,765
Options exercisable as of September 30, 2021		2,922,558		$	0.47		6.25	$	66,832

The weighted-average grant date fair value of options granted during the three months ended September 30, 2021 and 2020 was $12.56 and $0.65 per share, respectively. The weighted-average grant date fair value of options granted during the nine months ended September 30, 2021 and 2020 was $10.43 and $0.62 per share, respectively.

The total fair value of options vested during each of the three months ended September 30, 2021 and 2020 was $323,000 and $191,000, respectively. The total fair value of options vested during each of the nine months ended September 30, 2021 and 2020 was $628,000 and $297,000, respectively.

There was $42.7 million and $1.3 million of unrecognized stock-based compensation expense related to unvested stock options as of September 30, 2021 and 2020, respectively. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 3.23 years and 2.64 years as of September 30, 2021 and 2020, respectively.

The Company currently uses authorized and unissued shares to satisfy option exercises.

The aggregate intrinsic value is calculated as the difference between the exercise price and the estimated fair value of the Company’s common stock as of September 30, 2021.

Stock-based compensation expense

The following table shows the allocation of stock-based compensation expense related to the Company’s stock-based awards (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Cost of sales	$	559	$	38	$	791	$	107
Research and development		698		28		1,002		67
Sales and marketing		478		38		781		105
General and administrative		720		22		1,004		61
Total stock-based compensation	$	2,455	$	126	$	3,578	$	340

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options. The valuation model for stock compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation including the expected term (weighted-average period of time that the options granted are expected to be outstanding), volatility of the Company’s common stock and an assumed-risk free interest rate. The following table shows the weighted-average valuation assumptions used in determining the fair value of employee stock options:

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Expected term (in years)		6.08			6.02			6.05			6.00
Expected volatility		89.83	%		85.20	%		90.07	%		80.54	%
Risk-free interest rate		0.88	%		0.36	%		0.95	%		0.75	%
Dividend yield	—			—			—			—