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 June 30, 2022 and December 31, 2021, the Company had no preferred stock issued or outstanding.

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.

As of June 30, 2022, a total of 1,866,579 shares of the Company’s common stock were available for issuance under the 2014 Plan. As of June 30, 2022, inducement grants for 2,342,893 shares of common stock have been awarded, and 312,943 shares of common stock were available for future issuance under the Inducement Plan.

Options under 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 not be 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, 2021		1,703,963		$	4.75		5.41
Granted		150,000
Forfeited		(73,637	)		5.10
Balances at June 30, 2022		1,780,326		$	4.34		5.51

For stock-based awards the Company recognizes compensation expense based on the grant date fair value using the Black-Scholes option valuation model. Stock-based compensation expense related to stock options for both the three and six months ended June 30, 2022 and 2021 were $0.2 million and $0.3 million, respectively. As of June 30, 2022, unrecognized compensation costs related to stock options was $1.5 million.

The Company has issued restricted stock unit awards, or RSUs, under the 2014 Plan and the Inducement Plan. The RSUs issued to employees generally vest on a straight-line basis annually over a 3-year requisite service period. RSUs issued to non-employees 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, 2021		2,799,552		$	8.11
Granted		3,333,797			2.22
Vested		(596,101	)		5.46
Forfeited		(167,383	)
Balances at June 30, 2022		5,369,865		$	5.00

Stock-based compensation expense for RSUs for the three months ended June 30, 2022 and 2021 was $1.8 million and $2.3 million, respectively. Stock-based compensation expense for RSUs for the six months ended June 30, 2022 and 2021 was $3.7 million and $5.2 million, respectively. As of June 30, 2022, there was $11.4 million of total unrecognized compensation costs related to non-vested RSU awards. The cost is expected to be recognized over a weighted average period of approximately 2.09 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 for 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. 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 purchase date. A total of 255,500 shares of common stock were initially reserved for issuance under the ESPP, subject to certain annual increases.

During the six months ended June 30, 2022, employees purchased 139,574 shares of common stock at a weighted average price of $2.36 per share. As of June 30, 2022, the number of shares of common stock available for future issuance for the ESPP was 1,735,734.

The Company estimated the fair value of employee stock purchase rights using the Black-Scholes model. Stock-based compensation expense related to the ESPP was $0.2 million for both the three months ended June 30, 2022 and 2021. Stock-based compensation expense related to the ESPP was $0.3 million for both the six months ended June 30, 2022 and 2021.