In 2017, the Company adopted the 2017 Stock Incentive Plan (2017 Plan), which provided for the granting of awards to employees, directors, and consultants of the Company. Awards issuable under the 2017 Plan included incentive stock options (ISOs), nonqualified stock options (NSOs), and restricted stock awards. In 2020, the Company adopted the 2020 RSU Equity Incentive Plan (2020 RSU Plan), which provided for the granting of RSUs to employees and consultants of the Company and any parent or subsidiary of the Company and members of our board of directors.

In 2020, the Company adopted the 2020 Equity Incentive Plan (2020 Plan), which became effective in connection with the IPO. Awards issuable under the 2020 Plan include ISOs, NSOs, restricted stock awards, RSUs, stock appreciation rights and performance awards, to employees and consultants of the Company or any parent or subsidiary of the Company and members of our board of directors. The Company’s 2017 Plan and 2020 RSU Plan were terminated in connection with the IPO and no further grants will be made under the 2017 Plan and 2020 RSU Plan from the date that the 2020 Plan became effective.

Stock options to purchase the Company’s Class A common stock may be granted at a per share exercise price not less than the fair market value of a share of the Company’s Class A common stock at the date of grant in the case of both NSOs and ISOs, except for grants of ISOs to an employee who owns more than 10% of the voting power of all classes of stock of the Company or any parent or subsidiary of the Company, in which case the per share exercise price shall be no less than 110% of the fair market value per Class A common stock on the grant date. Stock options granted under the 2017 Plan and 2020 Plan generally vest over four years and expire no later than 10 years from the date of grant. 5,336,569 shares of Class A common stock were initially reserved for issuance under the 2020 Plan, which includes 516,710 shares that remained available for issuance under the 2017 Plan. Additional shares subject to certain equity awards that otherwise would have returned to the 2017 Plan or the 2020 RSU Plan may become available for issuance under the 2020 Plan. The 2020 Plan also provides for an annual, automatic increase in the number of shares of the Company’s Class A common stock reserved for issuance under the 2020 Plan as of the first day of each fiscal year of the Company beginning with the Company’s 2021 fiscal year, in an amount equal to the least of (a) 9,037,149 shares, (b) a number of shares equal to 5% of the total number of shares of all classes of common stock of the Company outstanding on the last day of the immediately preceding fiscal year, or (c) such number of shares determined by the administrator of the 2020 Plan prior to the date of such share increase. As of December 31, 2023, there are 14,570,948 shares of Class A common stock reserved for issuance under the 2020 Plan, 4,366,211 shares of which are available for issuance in connection with grants of future awards.

Stock option activity for the year ended December 31, 2023 is as follows:


	Options Outstanding			Weighted-Average Exercise Price		Weighted-Average Remaining Term (Years)		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2022		10,214,430		$	13.90		8.00	$	12,685
Options granted		3,576,669			4.17
Options exercised		(188,998	)		0.52
Options forfeited		(1,657,069	)		8.92
Balance at December 31, 2023		11,945,032		$	11.89		6.89	$	454
Vested and exercisable, December 31, 2023		6,893,780		$	8.88		6.40	$	410

The weighted-average grant date fair value of stock options granted to employees during the years ended December 31, 2023 and 2022, was $4.19 and $14.15 per share, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2023 and 2022, was $0.5 million and $12.7 million, respectively. As of December 31, 2023, the total unrecognized stock-based compensation related to unvested stock options was $30.8 million, which the Company expects to recognize over a remaining weighted-average period of 3.33 years.

The fair value of stock options granted to employees, directors, and non-employees that are calculated using the Black-Scholes option pricing model using the following assumptions:


	Year Ended December 31,
	2023		2022
Risk-free interest rate	3.4% - 4.7%		1.6% - 4.2%
Expected volatility	76.0% - 83.5%		59.8% - 97.0%
Expected term (in years)	5.77 - 6.08		5.77 - 6.08
Expected dividend yield		—		—

In February 2023, the Company granted options to purchase an aggregate of 1,794,000 shares of the Company’s Class A common stock to certain Company executives, with vesting subject to market conditions (Market Condition Options). The Market Condition Options become eligible to vest if the average of the closing sales prices of a share of Class A common stock over a trailing twenty trading day period within seven years from the date of grant reaches a stock price of $6.89 per share (the Market Price Milestone). If the Market Price Milestone is achieved, 25% of each Market Condition Option will vest upon certification of such achievement, subject to the recipient’s continued service through the Market Price Milestone achievement date, and an additional 25% of each Market Condition Option will then vest on each of the one-, two- or three-year anniversaries of the Market Price Milestone achievement date, respectively, subject to the recipient’s continued service through the applicable anniversary date. In the event of the Company’s change in control during the seven-year performance period, the performance period will be shortened, achievement of the Market Price Milestone will be assessed based on the per share value of consideration that stockholders receive in the transaction (the change in control price), and if the Market Price Milestone is achieved on that basis, each Market Condition Option will vest in full as of immediately prior to the change in control, subject to the recipient’s continued service as of immediately prior to the change in control.

The Market Condition Options had a grant date fair value of approximately $5.2 million determined using a lattice-binomial option-pricing model based on a Monte Carlo simulation. The following assumptions were used to determine the grant date fair value of $2.80 - $3.02: (i) risk-free interest rate: 3.94%; (ii) expected volatility: 83.10%; (iii) expected dividend yield: 0.0% and (iv) strike price of $4.59. Compensation expense is recognized using an accelerated attribution method based on the derived service periods for each of the tranches. Failure to meet the market condition for an award does not result in reversal of previously recognized expense, so long as the service is provided for the duration of the respective derived service period.

The Company recognized compensation expense of $2.4 million related to the Market Condition Options for the year ended December 31, 2023. As of December 31, 2023, there was $2.8 million in unrecognized compensation related to unvested Market Condition Options, which the Company expects to recognize over a remaining weighted-average period of 1.41 years.

Certain stock options granted under the 2017 Plan provide stock option holders the right to exercise unvested stock options in exchange for restricted shares of Class A common stock. The Company has also issued restricted shares of Class A common stock under the 2020 Plan to employees and directors. There were 1,023 shares and 60,787 shares of restricted stock that were unvested and subject to repurchase as of December 31, 2023 and 2022, respectively.

The Company has granted RSUs under the 2020 RSU Plan and the 2020 Plan. Restricted stock units (“RSUs”) are share awards that entitle the holder to receive freely tradable shares of the Company’s common stock upon vesting. The RSUs cannot be transferred and the awards are subject to forfeiture if the holder’s employment terminates prior to the release of the vesting restrictions. The fair value of the RSUs is equal to the closing price of the Company’s common stock on the grant date. The RSUs generally vest over four years from the vesting start date.

RSU activity for the year ended December 31, 2023 is as follows:


	Number of Shares			Weighted-Average Grant Date Fair Value
Balance at December 31, 2022		1,650,976		$	18.23
Granted		3,415,976			3.86
Vested		(510,538	)		18.13
Forfeited		(876,338	)		7.37
Balance at December 31, 2023		3,680,076		$	7.49

As of December 31, 2023, the total unrecognized stock-based compensation related to RSUs was $20.1 million, which the Company expects to recognize over a remaining weighted-average period of 2.9 years.

In November 2020, the Company’s board of directors adopted the 2020 Employee Stock Purchase Plan (ESPP), which was subsequently approved by the Company’s stockholders and became effective in connection with the IPO. The ESPP permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation.

A total of 602,570 shares of Class A common stock initially were reserved for issuance under the ESPP. The ESPP provides for an annual, automatic increase in the number of shares of the Company’s Class A common stock reserved for issuance under the ESPP as of the first day of each fiscal year of the Company beginning with the Company’s 2021 fiscal year, in an amount equal to the least of (a) 1,807,476 shares, (b) a number of shares equal to 1% of the total number of shares of all classes of common stock of the Company outstanding on the last day of the immediately preceding fiscal year, or (c) such number of shares determined by the administrator of the ESPP prior to the date of such share increase. A total of 1,829,437 shares of Class A common stock are reserved for issuance under the ESPP as of December 31, 2023. During the year ended December 31, 2023, 193,157 shares of Class A common stock were issued under the ESPP. As of December 31, 2023, the total unrecognized stock-based compensation related to the ESPP was $0.1 million, which the Company expects to recognize over a remaining weighted-average period of 0.37 years.

The fair value of the ESPP shares is estimated using the Black-Scholes option pricing model, based on the following assumptions:


	Year Ended December 31,
	2023		2022
Risk-free interest rate	5.3% - 5.4%		1.5% - 4.5%
Expected volatility	85.7% - 97.3%		79.1% - 88.5%
Expected term (in years)		0.50		0.50
Expected dividend yield		—		—

The following table summarizes the components of stock-based compensation recognized in the Company’s consolidated statements of operations and comprehensive loss (in thousands):


	Year Ended December 31,
	2023		2022
Cost of revenue	$	1,490	$	1,083
Research and development		9,709		9,125
Selling, general and administrative		23,225		23,465
Total stock-based compensation	$	34,424	$	33,673

In February 2022, in connection with a leave of absence taken by one of the Company’s executives, a total of 1,330,892 share-based awards were modified to extend the overall term and change the timing of the vesting of the awards. The total incremental stock-based compensation associated with the modification was $0.9 million, of which none remains unrecognized for the period ended December 31, 2023. On September 30, 2022, the executive resigned from his position as President of the Company and from the Company’s Board of Directors.

On June 21, 2022, the Company’s Board of Directors approved an option repricing to reduce the exercise price of certain vested, outstanding, and unexercised stock options with an exercise price greater than $19.00 per share, each of which was granted under the 2020 Plan, that were held by employees who were not members of the Board of Directors or officers for purposes of Section 16 of the Securities Exchange Act of 1934, as amended (the Non-Section 16 employees) to $19.00 per share, which was the Company’s initial public offering price. The Board of Directors also approved the repricing of certain unvested, outstanding, and unexercised stock options with an exercise price greater than $19.00 per share that were held by Non-Section 16 employees to $7.40 per share, which was the closing price of the Company’s Class A common stock on the Nasdaq Global Select Market on the date of the approval of the repricing. Except for the exercise price, the amended stock options have the same terms and conditions (including vesting schedule, number of shares, and expiration date) and will continue to be governed by the terms of the 2020 Plan.

The Company recorded $0.7 million and $4.8 million of incremental compensation expense during the year ended December 31, 2023 and 2022. The total unrecognized incremental stock-based compensation associated with the option repricing is $1.1 million, which will be recognized over the next two years.