Stock Based Compensation

12 Months Ended

Dec. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Based Compensation

6. Stock Based Compensation

2017 and 2021 Incentive Plan

During 2017, the Company adopted a stock option plan (the “2017 Plan”) which replaced the Company’s 2007 stock option plan (the “2007 Plan”). Following the adoption of the 2017 Plan, no stock options were granted under the 2007 Plan. The exercise price of options granted under the 2017 Plan were set at fair market value at the date of the grant as estimated by the Company’s Board with an exercise price of no less than 100% of estimated fair market value on the date of grant.

In connection with its IPO, the Company adopted the 2021 Equity Incentive Plan (the "2021 Plan"). The types of awards that may be granted under the 2021 Plan include stock options, including incentive stock options and nonqualified stock options, restricted stock, dividend equivalents, restricted stock units (“RSUs”), stock appreciation

rights, and other stock or cash awards. Under the 2021 Plan, the vesting of stock awards is typically over four years. Following the adoption of the 2021 Plan, no further awards will be made under the 2017 Plan.

Stock-based Compensation Expenses

The following tables present the Company's stock-based compensation for equity-settled awards by type and financial statement lines included in the accompanying consolidated statement of operations and comprehensive loss for the years ended December 31:

	2021		2020
	(in thousands)
Options	$	2,258	$	1,644
RSUs	114			-
Total stock-based compensation expense	$	2,372	$	1,644
	2021		2020
	(in thousands)
Cost of sales	$	230	$	164
Selling, general and administrative		1,574		1,038
Research and development	568		442
Total stock-based compensation expense	$	2,372	$	1,644

Compensation cost related to unvested stock options and RSUs will generally be amortized on a straight-line basis over the remaining average service period. The following table presents the unamortized compensation cost and weighted average service period of all unvested outstanding awards as of December 31, 2021.

	Unamortized Compensation Costs		Weighted Average Service Period
	(in thousands)		(years)
Options	$	9,575	3.2
RSUs		2,672	3.8
Total unamortized compensation cost	$	12,247

Plan Activities

The following table summarizes stock option activity under the Company's incentive plans:

	Number of Shares			Weighted Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
						(in years)	(in thousands)
Options outstanding, December 31, 2019		1,861,712		$	3.98
Granted		907,997		$	7.01
Exercised		(11,104	)	$	3.82		$	35
Forfeited		(511,469	)	$	4.29
Options outstanding, December 31, 2020		2,247,136		$	5.13
Granted		1,130,249		$	11.98
Forfeited		(175,030	)	$	6.44
Exercised		(79,076	)	$	3.39		$	669
Expired		(3,286	)	$	0.73
Options outstanding, December 31, 2021		3,119,993		$	7.59	7.6	$	2,325
Options vested and exercisable, December 31, 2021		1,487,143		$	4.65	5.8	$	2,229
Vested and expected to vest after December 31, 2021		2,918,841		$	7.40	7.5	$	2,311

The weighted-average grant-date fair value of options granted during the years ended December 31, 2021 and 2020 was $8.34 per share and $4.57 per share respectively.

The following table summarizes the non-vested stock options as of December 31, 2021 and 2020:

	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested Options, December 31, 2020		1,112,206	$	4.21
Non-vested Options, December 31, 2021		1,632,852	$	7.09

The total fair value of shares vested during the years ended December 31, 2021 and 2020 was $2.0 million and $1.3 million respectively.

Certain stock option grants under the 2017 Plan allow the recipient to exercise the options prior to the options becoming fully vested. Under the 2017 Plan, the Company retains the right to repurchase common shares that have been issued upon early exercise of options at the original issue price. During the year ended December 31, 2021, the Company did not repurchase shares. There was no material amount of shares of common stock subject to repurchase as of December 31, 2021. Cash received for the early exercise of unvested stock options is initially recorded as a liability and are released to equity over the vesting period. During 2021 and 2020, early exercised stock options vested were immaterial.

The following table summarizes RSU activity under the Company's incentive plans:

	Number of Shares		Weighted Average Grant Date Fair Value
RSUs outstanding, December 31, 2020		—	$	—
Granted		338,149	$	9.37
RSUs outstanding, December 31, 2021		338,149	$	9.37

Fair Value Valuation Assumptions

The fair value of the Company's stock options awards is estimated at the date of grant using the Black-Scholes option-pricing model with the following input assumptions during the year ended December 31:

	2021		2020
	Range	Weighted Average	Range	Weighted Average
Expected volatility	80.49% - 83.14%	81.82%	74.49% - 82.26%	75.42%
Dividend yield	0.00%		0.00%
Risk-free interest rates	0.87% - 1.31%	1.19%	0.27% - 0.83%	0.73%
Expected term (in years)	5.49 - 6.64	6.05	5.00 - 6.60	6.00

The fair value of the Company's RSU awards is determined based upon the closing price of the Company's stock price on the date of grant.

Stock Reserved for Issuance

As of December 31, 2021, 6.5 million shares of common stock were reserved for issuance under the Company's incentive plans.