The Company’s Amended and Restated Certificate of Incorporation authorizes the Company to issue 210,000,000 shares of common and preferred stock, consisting of 200,000,000 shares of common stock with $0.01 par value and 10,000,000 shares of preferred stock with $0.01 par value. As of December 31, 2021, the Company had no preferred stock issued or outstanding.

In April 2007, the Company adopted the 2007 Equity Incentive Plan, or 2007 Plan. The 2007 Plan provides for the granting of stock options to employees, directors and consultants of the Company. Options granted under the 2007 Plan may either be incentive stock options or nonstatutory stock options. Incentive stock options, or ISOs, may be granted only to Company employees. Nonstatutory stock options, or NSOs, may be granted to all eligible recipients. A total of 1,690,448 shares of the Company’s common stock were reserved for issuance under the 2007 Plan.

As of December 31, 2021, pursuant to the 2007 Plan, there were 114,120 options outstanding and no shares of common stock available for future grants.

The Company’s board of directors adopted the 2014 Equity Incentive Plan, or 2014 Plan, in July 2014, and the stockholders approved the 2014 Plan in October 2014. The 2014 Plan became effective upon completion of the IPO on November 3, 2014, at which time the Company ceased granting awards under the 2007 Plan. Under the 2014 Plan, the Company may issue ISOs, NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards and other forms of stock awards, or collectively, stock awards, all of which may be granted to employees, including officers, non-employee directors and consultants of the Company and their affiliates. ISOs may be granted only to employees. A total of 1,027,500 shares of common stock were initially reserved for issuance under the 2014 Plan, subject to certain annual increases.

As of December 31, 2021, pursuant to the 2014 Plan, there were 8,717,856 shares of common stock reserved and 2,190,272 shares of common stock available for future grants.

Pursuant to a board-approved Inducement Plan, the Company may issue NSOs and restricted stock unit awards which may only be granted to new employees of the Company and their affiliates in accordance with NASDAQ Stock Market Rule 5635(c)(4) as an inducement material to such individuals entering into employment with the Company. As of December 31, 2021, inducement grants for 1,983,411 shares of common stock have been awarded, and 606,112 shares of common stock were reserved for future issuance under the Inducement Plan.

Options under the 2007 Plan and the 2014 Plan may be granted for periods of up to ten years as determined by the Company’s board of directors, provided, however, that (i) the exercise price of an ISO shall not be less than 100% of the estimated fair value of the shares on the date of grant, and (ii) the exercise price of an ISO granted to a more than 10% shareholder shall not be less than 110% of the estimated fair value of the shares on the date of grant. An NSO has no such exercise price limitations. NSOs under the Inducement Plan may be granted for periods of up to ten years as determined by the board of directors, provided, the exercise price will be not less than 100% of the estimated fair value of the shares on the date of grant. Options generally vest with 25% of the grant vesting on the first anniversary and the balance vesting monthly on a straight-lined basis over the requisite service period of three additional years for the award. Additionally, options have been granted to certain key executives that vest upon achievement of performance conditions based on performance targets as defined by the board of directors, which have included net sales targets and defined corporate objectives over the performance period with possible payout ranging from 0% to 100% of the target award. Compensation expense is recognized on a straight-lined basis over the vesting term of one year based upon the probable performance target that will be met. The vesting provisions of individual options may vary but provide for vesting of at least 25% per year.

The following summarizes all option activity under the 2007 Plan, 2014 Plan and Inducement Plan:


				Weighted		Weighted average
				average		remaining
	Option			exercise		contractual
	Shares			price		term (year)
Balances at December 31, 2019		1,880,846		$	7.42		5.48
Granted		600,000			3.58
Exercised		(9,817	)		2.89
Forfeited		(511,528	)		8.87
Balances at December 31, 2020		1,959,501		$	4.79		5.92
Exercised		(72,726	)		3.99
Forfeited		(182,812	)		5.49
Balances at December 31, 2021		1,703,963		$	4.75		5.41
Vested and expected to vest at December 31, 2021		1,703,963
Vested and exercisable at December 31, 2021		1,266,428					7.27

There were no stock options granted during the years ended December 31, 2021 and 2019. The weighted average grant date fair value of stock options granted to employees and directors during the year ended December 31, 2020 was $3.58 per share. Stock-based compensation expense for stock options for the years ended December 31, 2021, 2020 and 2019 was $0.5 million, $0.1 million and $0.6 million, respectively. Tax benefits arising from the disposition of certain shares issued upon exercise of stock options within two years of the date of grant or within one year of the date of exercise by the option holder, or Disqualifying Dispositions, provide the Company with a tax deduction equal to the difference between the exercise price and the fair market value of the stock on the date of exercise. As of December 31, 2021 there was $1.5 million of unrecognized compensation cost related to stock options granted under the plans. The expense is recorded within the operating expense components in the consolidated statement of operations based on the employees receiving the awards.

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 $208,000, $14,000, and $0.6 million during the years ended December 31, 2021, 2020 and 2019, respectively.

The following table presents the weighted‑average assumptions used to estimate the fair value of options granted during the periods presented:


	Year Ended December 31,
Stock Options	2021	2020	2019
Expected term (in years)	—	6.50	—
Expected volatility	—	82.65%	—
Risk-free interest rate	—	0.27%	—
Dividend yield	—	—	—

The expected term of employee stock options, risk‑free interest rate and volatility represents the weighted average, based on grant date period which the stock options are expected to remain outstanding. The Company utilizes the simplified method to estimate the expected term of the options pursuant to ASC Subtopic 718‑10 for all option grants to employees. The Company estimates its expected stock volatility based on company-specific historical and implied volatility information of its stock. The risk‑free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for periods corresponding with the expected term of the option. The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The Company has never declared or paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the foreseeable future. The Company records forfeitures when they occur.

For purposes of financial accounting for stock‑based compensation, the Company has determined the fair values of its options based in part on the work of a third‑party valuation specialist. The determination of stock‑based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If the Company had made different assumptions, its stock‑based compensation expense, and its net loss could have been significantly different.

The Company has issued restricted stock unit awards, or RSUs, to employees and non-employees under the 2014 Plan and Inducement Plan. The RSUs issued to employees generally vest on a straight-line basis annually over a 3-year requisite service period. The RSUs issued to non-employees are generally for consulting services and generally vest either monthly or annually over the service term.

Activity related to RSUs is set forth below:


				Weighted average
	Number			grant date
	of shares			fair value
Balances at December 31, 2019		2,232,956		$	11.99
Granted		3,070,430			4.77
Vested		(1,150,707	)		10.06
Forfeited		(1,058,889	)		7.82
Balances at December 31, 2020		3,093,790		$	6.97
Granted		1,636,969			7.06
Vested		(1,452,893	)		6.42
Forfeited		(478,314	)		2.31
Balances at December 31, 2021		2,799,552		$	8.11

The weighted average grant date fair value of RSUs granted to employees and directors during the years ended December 31, 2021, 2020 and 2019 was $7.06, $4.77, and $8.02 per share, respectively. Stock-based compensation expense for RSUs for the years ended December 31, 2021, 2020 and 2019 was $9.3 million, $7.5 million and $11.2 million, respectively. As of December 31, 2021, there was $9.8 million total unrecognized compensation cost related to non-vested RSU awards. The cost is expected to be recognized over a weighted average period of 2.03 years.

The Company’s board of directors adopted the 2014 Employee Stock Purchase Plan, or ESPP, in July 2014, and the stockholders approved the ESPP in October 2014. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The ESPP provides offering periods not to exceed 27 months, and each offering period will include purchase periods, which will be the approximately six-month period commencing with one exercise date and ending with the next exercise date, except that the first offering period commenced on the first trading day following the effective date of the Company’s registration statement. Employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the exercise date. A total of 255,500 shares of common stock were initially reserved for issuance under the ESPP. The number of shares available for sale under the ESPP will be increased annually on the first day of each fiscal year, equal to the lesser of i) 1% of the total outstanding shares of the Company’s common stock as of the last day of the immediately preceding fiscal year; ii) 3,000,000 shares of common stock, or iii) such lesser amount as determined by the board of directors.

As of December 31, 2021, the number of shares of common stock reserved for issuance under the ESPP was 2,252,652. During the year ended December 31, 2021, employees purchased 199,071 shares under the ESPP at a weighted average exercise price of $3.38 per share. During the year ended December 31, 2020, employees purchased 203,728 shares under the ESPP at a weighted average exercise price of $4.11 per share. As of December 31, 2021, the number of shares of common stock available for future issuance under the ESPP was 1,253,615. Stock-based compensation related to the ESPP for the years ended December 31, 2021, 2020 and 2019 was $0.6 million, $0.6 million, and $0.8 million, respectively.

The following table presents the weighted-average assumptions used to estimate the fair value of the stock purchase rights granted under the employee stock purchase plan:


	Year Ended December 31,
ESPP	2021					2020					2019
Expected term (in years)	0.50		to	2.00		0.50		to	2.00		0.50		to	2.00
Expected volatility	64	%	to	101	%	68	%	to	139	%	69	%	to	77	%
Risk-free interest rate	0.06	%	to	0.20	%	0.14	%	to	1.57	%	1.87	%	to	2.06	%
Dividend yield	—					—					—

There were no material modifications of equity awards during the years ended December 31, 2021, 2020, and 2019.