Prior to June 20, 2023, the Company had authorized the issuance of 5,900,000 shares of the Company's common stock under the 2016 Long-Term Incentive Plan (the 2016 Plan), of which 184,904 shares remained available for future grants.

At the Company’s Annual Meeting of Stockholders held on June 20, 2023, the Company’s stockholders approved the adoption of the 2023 Long Term Incentive Plan (the 2023 Plan) and authorized up to 3,500,000 shares of common stock reserved for issuance to participating employees plus the 184,904 shares that remained available for grant under the 2016 Plan upon adoption of the 2023 Plan plus any shares that would have otherwise have become available for grant under the Company's 2008 Plan or the 2016 Plan as a result of termination or forfeiture of awards under such plan. The 2023 Plan replaced the 2008 Plan and the 2016 Plan. At March 31, 2024, a total of approximately 176,000 shares were available for new awards under the 2023 Plan.

Starting March 2022, the Company granted non-statutory stock options to new employees as inducement awards to enter into employment with the Company. The grants were approved by the Compensation Committee of the board of directors and awarded in accordance with Nasdaq Listing Rule 5635(c)(4). Although not awarded under the 2023 Plan or the 2016 Plan, the grants are subject to and governed by the terms and conditions of the plan in effect at the time of the grant.

The following table provides a reconciliation of stock option activity under the Company’s equity incentive plan and for inducement awards for the three months ended March 31, 2024:


	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding at January 1, 2024		6,304,767		$	9.98
Granted		1,706,582			21.27
Exercised		(444,184	)		9.66
Forfeited		(136,148	)		7.31
Outstanding at March 31, 2024		7,431,017		$	12.64		7.95	$	64,740
Exercisable at March 31, 2024		2,976,446		$	12.73		6.35	$	27,295

The Company's stock options generally vest over four years with 25% vesting after one year of service followed by ratable monthly vesting over the remaining three years. Nonemployee awards are granted similar to the Company’s employee awards. All option grants have a 10-year term. Options to purchase a total of 1,086,001 shares of the Company’s common stock vested during the three months ended March 31, 2024.

The following table summarizes information about employee, non-executive director and external consultant stock options for the three months ended March 31, 2024 (in thousands except per share amount):


	Three Months
	Ended
	March 31, 2024
Weighted average grant date fair value per share	$	16.91
Total cash received from exercise of stock options	$	4,294
Total intrinsic value of stock options exercised	$	6,802

Time-vested restricted stock units (RSUs) issued to date under the 2016 Plan and the 2023 Plan generally vest on a ratable annual basis over 3 years. The related stock-based compensation expense is recorded over the requisite service period, which is the vesting period. The fair value of all time-vested RSUs is based on the closing share price of the Company’s common stock on the date of grant.

The following table provides a reconciliation of RSU activity under the 2016 Plan and the 2023 Plan for the three months ended March 31, 2024:


	Number of Restricted Stock Units			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2024		1,333,192		$	5.31
Granted		636,100			20.40
Vested		(533,688	)		6.23
Forfeited		(32,452	)		7.31
Nonvested at March 31, 2024		1,403,152		$	11.76

At March 31, 2024, the weighted average remaining vesting term of the RSUs was 1.74 years.

The Company’s Employee Stock Purchase Plan (the ESPP) allows qualified participants to purchase the Company’s common stock twice a year at 85% of the lesser of the average of the high and low sales price of the Company’s common stock on (i) the first trading day of the relevant offering period and (ii) the last trading day of the relevant offering period. The number of shares of the Company’s common stock each employee may purchase under this plan, when combined with all other employee stock purchase plans, is limited to the lower of an aggregate fair market value of $25,000 during each calendar year, or 5,000 shares of the Company’s common stock in any one offering period. The Company has maintained consecutive six-month offering periods since August 1, 2019. During the three months ended March 31, 2024, 25,015 shares of the Company’s common stock were issued pursuant to the ESPP.

The Company estimated the fair value of the option component of the ESPP shares at the date of grant using a Black-Scholes valuation model. During the three months ended March 31, 2024, the compensation expense from ESPP shares was $0.1 million. During the three months ended March 31, 2023, the compensation expense from ESPP shares was immaterial.

The Company’s consolidated statements of comprehensive loss included total compensation expense from stock-based payment awards as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Compensation expense included in:
Research and development	$	7,827	$	1,240
Sales and marketing		—		430
General and administrative		4,872		1,380
	$	12,699	$	3,050

During the three months ended March 31, 2024, the Company modified certain stock option and restricted stock awards in connection with the termination of two executives resulting in incremental compensation expense of $5.6 million.

At March 31, 2024, there was approximately $43.3 million of unrecognized compensation expense related to outstanding equity awards under the 2023 Plan, the 2016 Plan, the inducement awards and the ESPP that is expected to be recognized as expense over a weighted average period of approximately 1.8 years.