Stock-based Compensation

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Prior to becoming a publicly traded entity, the Company issued incentive stock options, non-qualified stock options, and restricted stock to employees and non-employee consultants under its 2015 Stock Plan (the “2015 Plan”). Since the closing of the Business Combination, the Company has not issued any new stock-based awards under the 2015 Plan.

In December 2020, the Company’s Board adopted and the Company’s stockholders approved the 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan became effective upon the closing of the Business Combination. Under the 2020 Plan, as of March 31, 2022, the Company was authorized to issue a maximum number of 36,588,278 shares of Class A common stock.

Stock Options

Under the terms of the 2015 Plan, incentive stock options had an exercise price at or above the fair market value of the stock on the date of the grant, while non-qualified stock options were permitted to be granted below fair market value of the stock on the date of grant. Stock options granted have service-based vesting conditions only. The service-based vesting conditions vary, though typically, stock options vest over four years with 25% of stock options vesting on the first anniversary of the grant and the remaining 75% vesting monthly over the remaining 36 months. Option holders have a 10-year period to exercise their options before they expire. Forfeitures are recognized in the period of occurrence.

A summary of the Company’s stock option activity for the nine months ended March 31, 2022 was as follows:


	Number of Common Stock Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (In Thousands)




Outstanding as of December 31, 2021	11,507,643	$	1.72

Exercised	(654,935)	1.67
Cancelled/Forfeited	(665,511)	1.67
Outstanding as of March 31, 2022	10,187,197	1.73		7.50	$	143,555

The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2022 was $8.3 million. The intrinsic value is calculated as the difference between the exercise price and the fair value of the common stock on the exercise date. The total grant-date fair value of the options vested was $0.8 million during the three months ended March 31, 2022.

Restricted Stock Awards

Prior to June 30, 2019, the Company granted restricted stock awards to employees. Recipients purchased the restricted stock on the grant date and the Company has the right to repurchase the restricted shares at the same price recipients paid to obtain those shares. The restrictions lapse solely based on continued service, and generally lapse over 4 years —25% on the first anniversary of the date of issuance, and the remaining 75% monthly over the remaining 36 months. At the grant date of the award, recipients of restricted stock are granted voting rights and receive dividends on unvested shares. No restricted stock awards have been granted after June 30, 2019.

Restricted stock awards activity for the three months ended March 31, 2022 was as follows:


	Shares	Weighted Average Grant Date Fair Value per Share




Outstanding as of December 31, 2021	666,298	$	1.21

Forfeited	(11,783)	1.22
Vested	(168,144)	1.16
Outstanding as of March 31, 2022	486,371	1.23

Restricted Stock units

The Company has been granting restricted stock units (“RSUs”) under the 2020 Plan. Each RSU granted under the 2020 Plan represents a right to receive one share of the Company’s Class A common stock when the RSU vests. RSUs generally vest over a period up to six years. The fair value of RSU is equal to the fair value of the Company’s common stock on the date of grant.

A summary of the Company’s restricted stock units activity for the three months ended March 31, 2022 was as follows:


	Shares	Weighted Average Grant Date Fair Value per Share




Outstanding as of December 31, 2021	11,983,032	$	19.56
Granted	4,429,640	14.10
Forfeited	(326,912)	17.94
Vested	(1,494,932)	19.48
Outstanding as of March 31, 2022	14,590,828	17.92

Fixed Value Equity Awards

The Company issues fixed value equity awards to certain employees as a part of their compensation package. These awards are issued as RSUs out of the 2020 EIP and are accounted for as liability classified awards under ASC 718 — Stock Compensation. Fixed value equity awards granted have service-based conditions only and vest quarterly over a period of four years. These awards represent a fixed dollar amount settled in a variable number of shares determined at each vesting period.

For the three months ended March 31, 2022 and 2021, the Company recorded $1.8 million and $0.0 million, respectively, in stock-based compensation expense related to these awards.

Optogration Awards

As part of the Optogration acquisition in August 2021, the Company owes up to $22.0 million of post combination compensation related to certain service and performance conditions. As of March 31, 2022, it is probable that the conditions will be met, and as a result, the Company recorded $9.1 million in stock-based compensation expense through March 31, 2022.

Compensation expense

Stock-based compensation expense by function was as follows (in thousands):


	Three Months Ended March 31,
	2022		2021
Cost of sales	$	1,786	$	83
Research and development	7,102		762
Sales and marketing	2,868		186
General and administrative	14,942		806
Total	$	26,698	$	1,837

Stock-based compensation expense by type of award was as follows (in thousands):


	Three Months Ended March 31,
	2022		2021
Equity Classified Awards:
Stock options	$	522	$	163
RSAs	(166)		1,674
RSUs	21,509		—
Liability Classified Awards:
Fixed value equity awards	1,780		—
Optogration awards	3,053		—

Total	$	26,698	$	1,837