(10) Stock compensation plan

2015 Equity Incentive Plan

The Company’s 2015 Equity Incentive Plan (the “2015 Plan”) was established for granting stock incentive awards to directors, officers, employees and consultants to the Company. The 2015 Plan provided for the grant of incentive and non-qualified stock options, stock appreciation rights, restricted stock and restricted stock units as determined by the board of directors. Under the 2015 Plan, stock options are generally granted with exercise prices equal to or greater than the fair value of the common stock as determined by the board of directors, expire no later than 10 years from the date of grant, and vest over various periods not exceeding four years.

Stock Options

During the three months ended March 31, 2021 and 2020, the Company granted options to employees with an aggregate fair value of $9,322 and $327, respectively, which are being amortized into compensation expense over the requisite service period. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options. The valuation model for stock compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation including the expected term (weighted-average period of time that the options granted are expected to be outstanding), volatility of the Company’s common stock and an assumed-risk-free interest rate.

The fair value of the shares of common stock underlying the stock options has historically been determined by the Board of Directors. Because there has been no public market for the Company’s common stock, the Board of Directors has determined fair value of the common stock at the time of grant of the option by considering a number of objective and subjective factors including valuation of comparable companies, sales of convertible preferred stock to unrelated third parties, operating and financial performance, the lack of liquidity of capital stock, and general and industry specific economic outlook, amongst other factors. In determining the fair value of the common stock, the methodologies used to estimate the enterprise value were performed using methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants Accounting Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. The fair value of the underlying common stock will be determined by the Board of Directors, after consideration of a third-party valuation report, until the Company’s common stock is listed on an established stock exchange or national market system.

Expected Volatility. Since the Company is a private entity with no historical data regarding the volatility of its common stock, the expected volatility used is based on volatility of a group of similar entities, referred to as “guideline” companies. In evaluating similarity, the Company considered factors such as industry, stage of life cycle and size.

Expected Term. The Company derived the expected term using the “simplified” method (the expected term is determined as the average of the time-to-vesting and the contractual life of the options), as the Company had limited historical information to develop expectations about future exercise patterns and post vesting employment termination behavior.

Risk-Free Interest Rate. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options.

Dividend Yield. The Company has never paid any dividends and does not plan to pay dividends in the foreseeable future, and, therefore, used an expected dividend yield of zero in the valuation model.

During the three months ended March 31, 2021, the Company granted options to purchase 1,343,700 shares of common stock at a weighted average fair value of $6.96 per share and a weighted average exercise price of $14.25 per share. During the three months ended March 31, 2020, the Company granted options to purchase 721,741 shares of common stock at a weighted average fair value of $0.47 per share and a weighted average exercise price of $0.53 per share. For the three months ended March 31, 2021 and 2020, the fair values were estimated using the Black-Scholes valuation model using the following weighted-average assumptions:


	Three months		Three months
	ended		ended
	March 31,		March 31,
	2021		2020

Weighted-average risk-free interest rate	1.0	%	1.1	%
Expected dividend yield	0	%	0	%
Expected volatility	51.0	%	45.1	%
Expected term	6.1 years		4.9 years

Stock-based compensation related to the Company’s stock-based awards was recorded as an expense and allocated as follows:


	Three months ended
	March 31,
	2021		2020
Cost of goods sold	$	16	$	2
Selling, general and administrative		183		231
Research and development		55		79
Total stock-based compensation	$	254	$	312

As of March 31, 2021 and 2020, there was $9,051 and $ 451, respectively, of total unrecognized compensation cost related to non-vested stock options granted to employees under the 2015 Plan. The Company expects to recognize that cost over a remaining weighted-average period of 3.9 and 2.9 years as of March 31, 2021 and 2020, respectively.

Stock incentive awards to nonemployees were determined to be immaterial as of March 31, 2021 and December 31, 2020.