Stock-based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock-based Compensation

Stock-based CompensationIn January 2019, the Company’s Board of Directors adopted the 2019 Stock Incentive Plan (the “Plan”). A total of 2,000,000 shares of common stock were authorized and reserved for issuance under the Plan in the form of incentive or nonqualified stock options and stock awards. A committee appointed by the Board of Directors of the Company determines the terms and conditions of each grant under the Plan. Employees, directors, and consultants are eligible to receive stock options and stock awards under the Plan. The aggregate number of shares available under the Plan and the number of shares subject to outstanding options may be increased or decreased by the Plan administrator to reflect any changes in the outstanding common stock by reason of any recapitalization, reorganization, reclassification, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in capital stock or similar transaction.

The exercise price of incentive stock options may not be less than the fair market value of the common stock at the date of grant. The exercise price of incentive stock options granted to individuals that own greater than 10% of the voting stock may not be less than 110% of the fair market value of the common stock at the date of grant.

The term of each incentive and nonqualified option is based upon such conditions as determined by the option agreement; however, the term can be no more than ten years from the date of the grant. In the case of an incentive stock option granted to an optionee who, at the time the option is granted, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any parent or subsidiary, the term of the option will be such shorter term as may be provided in the option agreement, but not more than five years from the date of the grant.

Stock Options

A summary of the Company’s stock option activity under the Plan for the period ended September 30, 2021 is as follows:

	Number of Options	Weighted- Average Exercise Price	Weighted- Average Remaining Contract Life (In Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2020	15,000	$10.00	8.0	$	—
Granted	—	—
Exercised	—	—
Canceled/forfeited	—	—
Outstanding at September 30, 2021	15,000	$10.00	7.3	$	—
Expected to vest at September 30, 2021	15,000	$10.00	7.3	$	—
Exercisable at September 30, 2021	—	—	0.0	$	—

In September 2021, the Company's Board of Directors accelerated the vesting of all outstanding stock options to vest immediately on October 15, 2021. Accordingly, the acceleration of the options vesting was treated as an award modification under ASC 718, resulting in an additional stock-based compensation expense of approximately $5,000 recognized for the three and nine months ended September 30, 2021. At September 30, 2021, total remaining stock-based compensation expense for unvested stock options is approximately $12,752.

Restricted stock

The Company issued restricted stock units to employees of the Company. The following table summarizes the unvested restricted stock units for the period ended September 30, 2021:

	Number of Shares Outstanding	Weighted Average Grant Date Fair Value
Unvested at December 31, 2020	256,000	$	10.00
Granted	40,000	17.98
Vested	(5,000)	18.56
Forfeited	(51,250)	11.03
Unvested at September 30, 2021	239,750	$	11.11

The restricted stock units and stock options granted are subjected to vesting conditions contingent upon the closing of an initial public offering of the Company. In September 2021, the Company's Board of Directors accelerated the vesting of the Company's restricted stock units, with each tranche of award vesting 6 months earlier than the original vesting date. The acceleration of the restricted stock units vesting was treated as an award modification under ASC 718, resulting in an additional

stock-based compensation expense of approximately $411,000 recognized for the three and nine months ended September 30, 2021.

For the three months ended September 30, 2021 and 2020, the Company recognized a total of $0.8 million and $0 stock-based compensation expense. For the nine months ended September 30, 2021 and 2020, the Company recognized $1.1 million and $0 stock-based compensation expense, respectively. The restricted stock units and stock options granted began vesting on April 15, 2021, which is the date of closing of the Company’s initial public offering. The company is recognizing stock-based compensation over the vesting period, which is generally over 3 years for the restricted stock units and 1 year for the stock options.

At September 30, 2021, total remaining stock-based compensation expense for unvested restricted stock units is approximately $1.7 million.