The board of directors of Mohawk Group, Inc., a subsidiary of the Company (“MGI”), adopted, and MGI’s stockholders approved, the Mohawk Group, Inc. 2014 Equity Incentive Plan on June 11, 2014. On March 1, 2017, MGI’s board of directors adopted, and MGI’s stockholders approved, an amendment and restatement of the 2014 Equity Incentive Plan (as amended, the “Mohawk 2014 Plan”). As of December 31, 2020, 56,458 shares were reserved for awards available for future issuance under the Mohawk 2014 Plan.

The Company’s board of directors adopted the Mohawk Group Holdings, Inc. 2018 Equity Incentive Plan (the “Mohawk 2018 Plan”) on October 11, 2018. The Mohawk 2018 Plan was approved by its stockholders on May 24, 2019. As of December 31, 2020, 93,615 shares were reserved for awards available for future issuance under the Mohawk 2018 Plan.

Options granted to date under the Mohawk 2014 Plan and the Mohawk 2018 Plan generally vest either: (i) over a four-year period with 25% of the shares underlying the options vesting on the first anniversary of the vesting commencement date with the remaining 75% of the shares vesting on a pro-rata basis over the succeeding thirty-six months, subject to continued service with the Company through each vesting date, or (ii) over a three-year period with 33 1/3% of the shares underlying the options vesting on the first anniversary of the vesting commencement date with the remaining 66 2/3% of the shares vesting on a pro-rata basis over the succeeding twenty-four months, subject to continued service with the Company through each vesting date. Options granted are generally exercisable for up to 10 years subject to continued service with the Company.

The Company’s board of directors adopted the Mohawk Group Holdings, Inc. 2019 Equity Plan (the “2019 Equity Plan”) on March 20, 2019. The 2019 Equity Plan was approved by its stockholders on May 24, 2019. As of December 31, 2020, no shares were reserved for future issuance. Shares of restricted common stock granted under the 2019 Equity Plan initially vested in substantially equal installments on the 6th, 12th, 18th and 24th monthly anniversary of the closing of the IPO. The Company and the 2019 Equity Plan participants subsequently agreed to extend (i) the vesting date for the first installment of shares of restricted common stock under the 2019 Equity Plan to March 13, 2020, (ii) the vesting date for the second installment of shares of restricted common stock to December 15, 2020, (iii) the vesting date for the third installment of shares of restricted common stock to either January 18, 2021 or March 10, 2021, and (iv) the vesting date for the fourth installment of shares of restricted common stock to July 1, 2021. Awards granted under the 2019 Equity Plan and not previously forfeited upon termination of service carry dividend and voting rights applicable to the Company’s common stock, irrespective of any vesting requirement. Under ASC Topic 718, the Company treats each award in substance as multiple awards as a result of the graded vesting and the fact that there is more than one requisite service period. Upon the prerequisite service period becoming probable, the day of the IPO, the Company recorded a cumulative catch up expense and the remaining expense will be recorded under graded vesting. In the event the service of a participant in the 2019 Equity Plan (each, a “Participant”) is terminated due to an “involuntary termination”, then all of such Participant’s unvested shares of restricted common stock shall vest on the date of such involuntary termination unless, within three business days of such termination (1) the Company’s board of directors unanimously determines that such vesting shall not occur and (2) the remaining Participants holding restricted share awards covering at least 70% of the shares of restricted common stock issued and outstanding under the 2019 Equity Plan determine that such vesting shall not occur. In the event of a forfeiture, voluntary or involuntary, of shares of restricted common stock granted under the 2019 Equity Plan, such shares are automatically reallocated to the remaining Participants in proportion to the number of shares of restricted common stock covered by outstanding awards that each such Participant holds.

The following is a summary of stock options activity during the year-ended December 31, 2020:

	Options Outstanding
	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (years)		Aggregate Intrinsic Value
Balance—January 1, 2020		1,862,569		$	9.09		8.64	$	99
Options granted		—			—	—			—
Options exercised		(10,697	)		4.16		—		—
Options cancelled		(281,144	)		9.29	—			—
Balance—December 31, 2020		1,570,728			9.09		7.71		12,756
Exercisable as of December 31, 2020		1,172,758			8.97		7.64		9,664
Vested and expected to vest as of December 31, 2020		1,570,728		$	9.09		7.71	$	12,756

As of December 31, 2020, the total unrecognized compensation expense related to unvested options was $5.0 million, which the Company expects to recognize over an estimated weighted-average period of 0.78 years.

The following are weighted-average assumptions used in the Black-Scholes option-pricing model to determine grant fair value:

	December 31, 2019			December 31, 2020
	Weighted-Average
Expected term (in years)		5.77			—
Volatility		66.72	%		—
Risk-free interest rate		1.76	%		—
Dividend Yield		0.000			—

A summary of restricted stock activity within the Company’s equity plans and changes for the year-ended December 31, 2020, is as follows:

Restricted Stock Awards	Shares			Weighted Average Grant- Date Fair Value
Nonvested at January 1, 2020		2,601,972		$	18.21
Granted		1,605,209			7.17
Vested		(400,798	)		13.58
Forfeited		(546,994	)		18.41
Nonvested at December 31, 2020		3,259,389		$	13.51

On March 12, 2020, 371,329 shares of restricted common stock were forfeited and treated as a cancellation with remaining unrecognized expense for the unvested awards recognized on the date of cancellation. The Company did not reverse previously recognized compensation expenses as a result of these cancellations.

The weighted-average grant date fair value of shares of restricted common stock granted during the year-ended December 31, 2019 was $18.52. As of December 31, 2019, the total unrecognized compensation expense related to unvested shares of restricted common stock was $19.4 million, which the Company expects to recognize over an estimated weighted-average period of 1.24 years.

As of December 31, 2020, the total unrecognized compensation expense related to unvested shares of restricted common stock was $12.2 million, which the Company expects to recognize over an estimated weighted-average period of 0.97 years.

Stock-based compensation expense is allocated based on the cost center to which the award holder belongs. The following table summarizes the total stock-based compensation expense by function, including expense related to consultants for years-ended December 31, 2019 and 2020 (in thousands).

	Years-End December 31,
	2019		2020
Sales and distribution expenses	$	7,358	$	2,533
Research and development expenses		5,711		3,965
General and administrative expenses		21,612		16,218
Total stock-based compensation expense	$	34,681	$	22,716