Stock-Based Awards

12 Months Ended

Dec. 31, 2024

Stock-Based Awards

Stock-Based Awards

13. Stock-Based Awards

For the years ended December 31, 2024 and 2023, the Company had three stock-based compensation plans under which it was able to grant stock-based awards, the 2021 Stock Incentive Plan, as amended (the “2021 Plan”), the 2019 Inducement Stock Incentive Plan, as amended (the “2019 Inducement Plan”), and the 2014 Employee Stock Purchase Plan (the “ESPP”) (collectively the “Stock Plans”). Certain inducement awards made prior to inception of the 2019 Inducement Plan were issued outside of the Stock Plans. The purpose of the Stock Plans is to provide incentives to employees, directors, and nonemployee consultants. The 2021 Plan and the 2019 Inducement Plan provide for the grant of non-statutory stock options, restricted stock awards, restricted stock units (“RSUs”), stock appreciation rights and other stock-based awards. The 2021 Plan also provides for the grant of incentive stock options.

As of December 31, 2024 and 2023, respectively, the Company had a number of vested stock awards outstanding that were granted under the Company’s 2014 Stock Incentive Plan (the “2014 Plan”). Effective as of the adoption of the 2021 Plan on June 18, 2021 by the Company’s stockholders, no new awards have been granted under the 2014 Plan. However, as of December 31, 2024, all then-outstanding awards under the 2014 Plan remained in effect and continued to be governed by the terms of the 2014 Plan. As of December 31, 2024 and 2023, respectively, the Company had an

immaterial number of vested stock awards outstanding that were granted under the Company’s 2006 Stock Incentive Plan (the “2006 Plan”). Effective as of the adoption of the 2014 Plan by the Company’s stockholders in 2014, no new awards have been granted under the 2006 Plan. As of December 31, 2024, all then outstanding awards under the 2006 Plan remained in effect and continued to be governed by the terms of the 2006 Plan.

2021 Plan - The number of shares initially reserved for issuance under the 2021 Plan was 6,000,000 shares of common stock; plus 456,334 shares remaining available for grant under the 2014 Plan as of immediately prior to the effective date of the 2021 Plan and 9,766,336 shares subject to awards granted under the 2014 Plan or the 2006 Plan, which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right (subject to certain limitations). On June 16, 2022, the Company’s stockholders approved an amendment (“Amendment No. 1”) to the Company’s 2021 Plan. Amendment No. 1 increased the number of shares of common stock that is reserved for issuance under the 2021 Plan by 3,600,000. On June 14, 2023, the Company’s stockholders approved an amendment (“Amendment No. 2”) to the Company’s 2021 Plan. Amendment No. 2 increased the number of shares of common stock that is reserved for issuance under the 2021 Plan by 3,900,000. On June 12, 2024, the Company’s stockholders approved an amendment (“Amendment No. 3”) to the Company’s 2021 Plan. Amendment No. 3 increased the number of shares of common stock that is reserved for issuance under the 2021 Plan by 7,000,000. As of December 31, 2024, 8,019,151 shares remained available for issuance under the 2021 Plan.

2019 Inducement Plan - Awards under the 2019 Inducement Plan may only be granted to persons who (a) were not previously an employee or director of the Company or (b) are commencing employment with the Company following a bona fide period of non-employment, in either case as an inducement material to the individual’s entering into employment with the Company and in accordance with the requirements of Nasdaq Stock Market Rule 5635(c)(4). For the avoidance of doubt, neither consultants nor advisors shall be eligible to participate in the 2019 Inducement Plan. Each person who is granted an Award under the 2019 Inducement Plan is deemed a “Participant”. On December 10, 2020, the board of directors of the Company amended the 2019 Inducement Plan to increase the aggregate number of shares issuable by 554,000 shares of common stock to 1,054,000. On February 20, 2024, the Company’s board of directors amended the 2019 Inducement Plan to increase the aggregate number of shares issuable thereunder from 1,054,000 to 3,804,000 shares of common stock. On April 16, 2024, the board of directors of the Company further amended the 2019 Inducement Plan to increase the aggregate number of shares issuable thereunder from 3,804,000 to 4,804,000 shares of common stock. On October 4, 2024, the board of directors of the Company further amended the 2019 Inducement Plan to increase the aggregate number of shares issuable thereunder from 4,804,000 to 6,054,000 shares of common stock. As of December 31, 2024, 848,373 shares remained available for issuance under the 2019 Inducement Plan.

ESPP – The number of shares initially reserved for issuance under the ESPP was 207,402 shares of common stock. The number of shares of common stock that may be issued under the ESPP will automatically increase on the first day of each fiscal year, commencing on January 1, 2015 and ending on December 31, 2024, in an amount equal to the least of 207,402 shares of the Company’s common stock, 0.5% of the number of shares of the Company’s common stock outstanding on the first day of the applicable fiscal year, and an amount determined by the Company’s board of directors. On January 1, 2023, the number of shares available for issuance under the ESPP increased by 207,402. On January 1, 2024, the number of shares available for issuance under the ESPP increased from 398,784 to 606,186. As of December 31, 2024, 393,055 shares of common stock remained available for issuance.

Stock options granted pursuant to the Stock Plans, excluding awards under the ESPP, are granted at exercise prices not to be less than the fair value of common shares as of the date of grant. They generally require a service period of 4 years and generally vest monthly, or 1/4 on the first anniversary of the grant date, with the remainder vesting monthly over the remaining three years. Stock Options granted under the 2019 Inducement Plan may in addition be subject to performance-based vesting. The maximum contractual term of Stock Options granted under the Stock Plans is generally 10 years. RSUs granted pursuant to the Stock Plans generally require a service period of 3 years and generally vest 1/3 on each anniversary of the grant date. Certain RSUs granted to certain newly hired executive and senior-level employees in the year ended December 31, 2024 require a service period of 3 years and vest quarterly. An immaterial number of RSUs granted to employees in the year ended December 31, 2024 vest fully on the first anniversary of the grant and are, in addition, subject to performance conditions.

Valuation of Awards

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The expected life of the options was calculated using the simplified method. The simplified method defines the life as the average of the contractual term of the options and the weighted-average vesting period for all option tranches. The Company utilizes the simplified method because the Company does not have sufficient historical exercise data over the life of awards to provide a reasonable basis upon which to estimate expected term. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The Company uses its historical volatility to estimate expected volatility.

The assumptions that the Company used to determine the fair value of the stock options granted to employees and directors are as follows, presented on a weighted average basis:

	Year Ended
	December 31,
	2024		2023		2022
Risk-free interest rate	4.11	%	3.72	%	2.10	%
Expected term (in years)	6.0		6.0		6.0
Expected volatility	80.12	%	77.32	%	81.14	%
Expected dividend yield	0.0	%	0.0	%	0.0	%

For RSUs, the grant date fair value is the closing price of the Company’s stock on the grant date.

Stock Options

The following table summarizes the Company’s stock option activity:

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Shares Issuable	Exercise		Contractual	Intrinsic
	Under Options	Price		Term	Value
				(In years)
Outstanding as of December 31, 2023	16,136,791	$	7.51	6.10	$	3,364
Granted	9,207,383		7.62
Exercised	(3,112,976)		4.74
Cancelled/forfeited	(2,343,515)		8.07
Outstanding as of December 31, 2024	19,887,683	$	7.93	6.05	$	41,570
Options vested and expected to vest as of December 31, 2024	18,406,424	$	8.10	5.89	$	37,139
Options exercisable as of December 31, 2024	11,419,466	$	8.26	3.90	$	27,814

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The aggregate intrinsic value of stock options exercised was $11,102, $275 and $186 during the years ended December 31, 2024, 2023 and 2022, respectively.

The weighted average grant date fair value of stock options granted during the years ended December 31, 2024, 2023 and 2022 was $5.59, $2.74 and $4.95 per share, respectively.

RSUs

The following table summarizes the Company’s activity of unvested RSUs:

		Weighted
		average
		grant date
	RSU's	fair value
Unvested balance at December 31, 2023	1,627,341	$	4.40
Granted	3,628,824		7.89
Released	(1,277,398)		5.84
Cancelled/forfeited	(589,163)		4.79
Unvested balance at December 31, 2024	3,389,604	$	7.52

Each RSU is equivalent to one share of common stock upon vesting. Holders of RSUs are not entitled to vote on any matters and are not entitled to dividends.

Stock-based Compensation

The Company recorded stock-based compensation expense in the following expense categories of its statements of operations and comprehensive loss:

	Year Ended December 31,
	2024		2023		2022
Research and development	$	9,276	$	4,508	$	4,166
Selling and marketing		3,071		3,682		4,684
General and administrative		20,762		9,635		8,114
	$	33,109	$	17,825	$	16,964

As of December 31, 2024, the Company had an aggregate of $53,813 of unrecognized stock-based compensation cost, which is expected to be recognized over a weighted average period of 2.8 years.