Stockholders' Deficit

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Stockholders' Deficit

11. Stockholders’ Deficit

Common stock

The Amended and Restated Certificate of Incorporation authorizes the Company to issue up to 144,406,928 shares of common stock.

In connection with the completion the IPO on October 21, 2021, the Company's certificate of incorporation was amended and restated to provide for 100,000,000 authorized shares of common stock with a par value of $0.001 per share and 5,000,000 authorized shares of preferred stock with a par value of $0.001 per share.

Shares reserved for future issuance

The Company has reserved shares of common stock for future issuances as follows:

	September, 30		December, 31
	2021		2020
Series A redeemable convertible preferred stock outstanding		450,692		450,692
Series B redeemable convertible preferred stock outstanding		675,397		675,397
Series C redeemable convertible preferred stock outstanding		2,223,888		2,223,888
Series D redeemable convertible preferred stock outstanding		9,047,861		9,047,861
Warrants to purchase Series D redeemable convertible preferred stock		77,842		77,842
Convertible notes*		—		—
Common stock options issued and outstanding		2,170,894		2,466,594
Common stock available for future grants		59,187		67,010

* At September 30, 2021 and December 31, 2020, the conversion of the convertible notes into redeemable convertible preferred stock was dependent on the outstanding loan balance including accrued interest and the conversion stock per share price at the date of qualified equity financing, non-qualified equity financing, or a change of control event. These factors were not estimable and the number of redeemable convertible preferred stock was not determinable. There were no conversions of convertible notes to preferred stock for the nine month period ended September 30, 2021 and twelve month period ended December 31, 2020.

2008 Stock Plan, as amended (the Plan)

Options

A summary of stock option activity is set forth below (in thousands, except share and per share data):

	Number of Shares Available for Grant			Number of Shares Underlying Outstanding Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding, January 1, 2021		67,010			2,466,594		$	0.61		5.21		—
Options authorized		1,653,955			—
Options granted		(1,784,086	)		1,784,086		$	11.25
Options exercised		—			(1,957,478	)	$	0.61
Options forfeited or cancelled		122,308			(122,308	)	$	1.48
Outstanding, September 30, 2021		59,187			2,170,894		$	9.31		8.86	$	8,283
Shares exercisable September 30, 2021					1,451,709		$	9.28		8.57	$	5,579
Vested and expected to vest, September 30, 2021					2,170,894		$	9.31		8.86	$	8,283

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock for stock options that were in-the-money at September 30, 2021.

During the three and nine months ended September 30, 2021, the aggregate intrinsic value of stock options exercised was $0.7 million and $1.5 million, respectively. The aggregate intrinsic value of stock options exercised was zero, for each of three and nine months ended September 30, 2020.

The total fair value of options that vested during the nine months ended September 30, 2021 and 2020 was $5.1 million and $0.5 million, respectively. The options granted during the nine months ended September 30, 2021 and 2020 had a weighted-average per share grant-date fair value of $7.07 and $0.36 per share, respectively. As of September 30, 2021, the total unrecognized stock-based compensation expense related to unvested stock options was $10.0 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.76 years.

Early exercise of stock options

The terms of the Plan permit the exercise of certain options granted under the Plan prior to vesting, subject to required approvals. The shares are subject to the Company’s lapsing repurchase right upon termination of employment at the original purchase price. The proceeds initially are recorded in accrued current liabilities from the early exercise of stock options and are reclassified to additional paid-in capital as the Company’s repurchase right lapses. During the nine months ended September 30, 2021 and September 30, 2020, the Company had no repurchases of common stock. As of September 30, 2020, there were no shares subject to repurchase. As of September 30, 2021 and December 31, 2020, there were 410,788 and 136,032 shares that were subject to repurchase, respectively. The

aggregate exercise prices of early exercised shares as of September 30, 2021 and December 31, 2020 was $0.3 million and $0.1 million, respectively, which were recorded in other current liabilities on the balance sheets.

Stock-based compensation associated with awards to employees and non-employees

On April 9, 2020, the Company’s Board of Directors approved the repricing of all outstanding stock options for employees, officers and consultants. The Company has treated the repricing as a modification of terms of the options outstanding. The fair value of the modification was determined as the difference in the fair value of each option immediately before and after the repricing using the Black-Scholes option pricing model.

The repricing resulted in an incremental compensation cost of less than $0.1 million and $0.3 million for the nine months ended September 2021 and 2020, respectively.

Total stock-based compensation expense recognized was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of goods sold	$	66	$	46	$	236	$	116
Sales and marketing		406		49		1,701		256
Research and development		8		1		127		7
General and administrative		595		109		3,620		375
Total	$	1,075	$	205	$	5,684	$	754

The Company estimated the fair value of stock options using the Black-Scholes option-pricing model. The fair value of stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of stock options was estimated using the following weighted-average assumptions:

	Nine Months Ended September 30,
	2021	2020
Expected volatility	72.9%-75.9%	61.6% - 75.2%
Risk-free interest rate	0.6%-1.1%	0.3%-0.7%
Dividend yield	0%	0%
Expected term	5-6.1 years	5-6.1 years