GDI had previously adopted a stock plan in 2018 (the “2018 Stock Plan”). Under the terms of the 2018 Stock Plan, certain option grants were accelerated in full or by an additional 12 months as a result of the Business Combination. Therefore, on the date of Closing, the acceleration of vesting for 2.6 million stock options resulted in a stock compensation charge and corresponding increase to additional paid-in capital of $2.5 million. Additionally, at Closing, a percentage of outstanding vested GDI stock options were settled in exchange for cash consideration, pursuant to the terms of the Merger Agreement.

The remaining portion of outstanding vested options totaling 1.7 million and all unvested options totaling 0.1 million were automatically assumed and converted into options to purchase the Company’s common stock as of the Closing. The number of each participant’s assumed options and the exercise price were adjusted as provided in the Merger Agreement. There was no incremental compensation cost attributable to the incremental fair value of the modified options compared to the original options on the modification date. The assumed stock options will continue to be subject to the same terms and conditions, including vesting schedule terms, in accordance with the 2018 Stock Plan. Exercise prices for 2018 Stock Plan options range between $3.51 and $3.54 per share.

The following table sets forth the activity for the 2018 Stock Plan, including the conversion of the vested and unvested options, for the nine months ended September 30, 2021:


			Options Outstanding, in thousands
Balance at December 31, 2019			2,734
Cashed out			(829)
Forfeited			(19)
Balance at March 31, 2020 (prior to exchange ratio conversion)			1,887
Converted vested balance			4,314
Converted unvested balance			364
Balance at March 6, 2020 (post to exchange ratio conversion)			4,678
Exercised in 2020			(28)
Forfeited/Cancelled in 2020			(50)
Options Outstanding as of December 31, 2020			4,600
Exercised in quarter ended March 31, 2021			(37)
Forfeited/Cancelled in quarter ended March 31, 2021			(11)
Options Outstanding as of March 31, 2021			4,552
Exercised in quarter ended June 30, 2021			(257)
Forfeited/Cancelled in quarter ended June 30, 2021			(3)
Options Outstanding as of June 30, 2021			4,291
Exercised in quarter ended September 30, 2021			(687)
Forfeited/Cancelled in quarter ended September 30, 2021			(1)
Options Outstanding as of September 30, 2021			3,603

As of September 30, 2021, a total of 0.07 million shares were forfeited, and 1.01 million shares were exercised for the total proceeds of $2.1 million in cash and 0.25 million shares net withheld for exercise price and taxes. The number of shares exercisable as of September 30, 2021 was 3.5 million with the average exercise price $3.54 per share. The intrinsic value of the 3.6 million total outstanding shares of 2018 Plan Options as of September 30, 2021, was $92.5 million with the remaining contractual term of 7.23 years. The unrecognized compensation expenses related to 2018 Plan options as of September 30, 2021 was $0.2 million, net of forfeitures, to be expensed on a straight-line basis over 1.93 years.

Effective March 5, 2020, our board of directors approved an equity incentive plan (the “2020 Plan”). The 2020 Plan permits the Company to grant a maximum aggregate amount of 16.3 million Incentive Stock Options, Non-Statutory Stock Options (“NSOs”), Restricted Stock, Restricted Stock Units (“RSUs”), Stock Appreciation Rights, Performance Units (“PSUs”), and Performance Shares (“PSAs”) (collectively, the “Awards”) to employees, directors, and consultants of the Company. Our board of directors or any committee appointed by the board has the authority to grant Awards. During the quarter ended September 30, 2021, our board of directors granted 0.32 million NSOs and 0.04 million RSUs. The following table represent the number of shares available for grants from 2020 Equity Incentive Plan (in thousands):


			Available for grant
Available for grant, December 31, 2020			9,881
Options granted			(546)
RSU granted			(47)
PSU granted (100% target)			(566)
Options, RSUs, and PSUs forfeited			669
Traded for taxes (returned to the pool)			1,513
Available for grant, September 30, 2021			10,904

The total of 0.32 million NSOs shares granted during the quarter ended September 30, 2021 from 2020 Equity Incentive Plan are subject to the following time-based vesting conditions: one-fourth of the NSOs will vest on one year after the grant date; and thereafter one-sixteenth of the NSOs will vest each subsequent three-month anniversary. The NSOs have a 10-year expiration term, and once the NSOs are vested, the recipients have the right to purchase the Company’s stock at a fixed exercise price.

The grant date fair value of each NSO was estimated on the date of grant using the Black-Scholes-Merton option pricing model. The key assumptions for 2021 grants are provided in the following table.

The Company used a zero percent dividend yield assumption for all Black-Scholes-Merton stock option-pricing calculations. Since the Company’s shares were not publicly traded prior to the Closing and its shares were rarely traded privately, expected volatility is estimated based on the average historical volatility of similar entities with publicly traded shares. The risk-free rate for the expected term of the options is based on the U.S. Treasury yield curve at the date of grant. Expected term is estimated using the simplified method, which takes into account vesting and contractual term. The simplified method is being used to calculate expected term instead of historical experience due to a lack of relevant historical data resulting from changes in option vesting schedules and changes in the pool of employees receiving option grants.


	Shares	Price (1)		Term (2)
Options outstanding as of December 31, 2020 (2020 Plan)	1,942	$	8.38	9.22
Options granted	546	$	18.60
Options exercised	(102)	$	8.20
Options forfeited	(345)	$	8.67
Options outstanding as of September 30, 2021 (2020 Plan)	2,041	$	11.08	8.85

0.49 million shares of 2020 NSO grants were vested and outstanding as of September 30, 2021. The aggregated fair value of 0.55 million NSOs granted during the nine months ended September 30, 2021 was $4.0 million or $7.35 per share. The intrinsic value of the 2.0 million total outstanding shares of 2020 Plan Options as of September 30, 2021, was $37.0 million. The total unrecognized compensation expenses related to 2020 Stock Plan options as of September 30, 2021 was $6.9 million to be expensed on a straight-line basis over the remaining 2.97 years.

The RSUs granted to employees generally are subject to the following time-based vesting conditions: one-fourth vest on the first anniversary of the grant; and thereafter one-sixteenth of the RSUs will vest each subsequent three-month anniversary. RSUs granted do not participate in earnings, dividends, and do not have voting rights until vested. RSUs granted to the Board in lieu of the quarterly payments vest immediately.

For the quarter ended September 30, 2021, approximately 0.08 million shares were issued upon vesting of the RSUs to the executives and 0.08 million shares were withheld to cover $2.1 million of employees’ tax obligations. The following table summarizes RSU activity for the nine months ended September 30, 2021(in thousands):

The total unrecognized compensation expenses related to 2020 Stock Plan RSUs as of September 30, 2021 was $13.6 million to be expensed on a straight-line basis over 1.9 years.

On March 2, 2021, the Company granted 0.5 million Performance Stock target shares under the 2020 Stock Plan with the maximum payout capped at 300%. The performance goals for these grants consist of:

1)Year-over-year growth in non-retail revenue for the Performance Period, which is Fiscal Year 2021, expressed as a percentage increase over the fiscal year 2020 non-retail revenue (“Revenue Growth”), and

Fifty percent (50%) of the target number of performance shares granted will vest (if at all) based on the extent of achievement of Revenue Growth for the Performance Period and the remaining fifty percent (50%) of the target number of performance shares granted will vest (if at all) based on the extent of achievement of the Contribution Margin.

Additionally, 0.02 million shares of PSU were granted on June 16th, 2021, per a consulting agreement with a former executive with the performance goals being consistent with those described above.

Performance shares will be certified and vested no later than March 1, 2022 with the payout shortly after. As of September 30, 2021, the Company assessed the vesting of the Performance Share Units as probable and the payout is estimated at 272% of the target goal. Stock-based compensation expense related to Performance Stock Units granted in 2021 was $13.1 million for the nine months ended September 30, 2021. The unrecognized expense for PSUs as of September 30, 2021, was $9.7 million.

The Company classifies awards issued under the stock-based compensation plans as equity. Total compensation expense for the three months ended September 30, 2021 and 2020 was $9.1 million and $5.1 million respectively. Employee stock-based compensation recognized was as follows (in thousands):


	Three months ended September 30, 2021				Nine months ended September 30,
	2021		2020		2021		2020
Cost of revenue	$	173	$	66	$	433	$	740
Engineering, research, and development	799		621		1,970		1,678
Sales and marketing	963		808		2,207		2,545
General and administrative	7,178		3,631		16,849		8,621
Total stock-based compensation	$	9,113	$	5,126	$	21,459	$	13,584