Stock Option Plan and Stock-Based Compensation
|9 Months Ended|
Sep. 30, 2021
|Share-based Payment Arrangement [Abstract]|
|Stock Option Plan and Stock-Based Compensation||Stock Option Plan and Stock-Based Compensation
Upon the consummation of the Merger, the Company adopted its 2021 Equity Incentive Plan (the “2021 EIP”) which provides for the granting of stock options, restricted stock awards and stock appreciation rights to employees, directors, and consultants of the Company. As of September 30, 2021, the Company has reserved 42,766,048 shares of its common stock for issuance under the 2021 EIP.
In addition, the Company adopted its 2021 Employee Stock Purchase Plan (“2021 ESPP”). As of September 30, 2021, the Company has reserved 10,989,830 shares of its common stock for issuance under the 2021 ESPP.
Awards granted under both the 2021 EIP and the Company’s 2014 Equity Incentive Plan (the “2014 Plan”) generally expire 10 years from the date of grant, or earlier if services are terminated. The exercise price of stock options grants shall not be less than 110% of the estimated fair value of the shares on the date of grant, respectively, as determined by the Company’s Board of Directors. Awards generally vest based on continuous service over four years. Awards forfeited, cancelled, or repurchased generally are returned to the pool of shares of common stock available for issuance under the 2021 Plan and 2014 Plan, respectively.
Activity under the Company’s stock option plans is set forth below:
The aggregate intrinsic value of options outstanding was $151.2 million and $3.9 million, respectively, as of September 30, 2021 and December 31, 2020. Intrinsic value of options exercised for the nine months ended September 30, 2021 and 2020 was $0.5 million and less than $0.1 million, respectively. The weighted-average grant date fair value of options granted in the nine months ended September 30, 2021 and 2020 was $3.58 per share and $0.14 per share, respectively. The total grant date fair value of options vested was $0.9 million and $0.2 million for the nine months ended September 30, 2021 and 2020.
Prior to the Company’s shares of common stock being publicly traded, the Company’s inputs for the intrinsic value are based on a third-party valuation of the Company’s stock, which increased from $0.40 per share to $8.15
per share, as of December 31, 2020 and September 29, 2021, the Closing Date, respectively. Prior to the consummation of the Merger, valuation methodologies in determining the fair market value of the Company’s stock considered the pending Merger.
Stock-based Compensation Associated with Awards
For the nine months ended September 30, 2021 and 2020, the Company used the Backsolve, or Option Pricing Method (the “OPM”), which is the preferred method when recent securities transactions are considered a relevant input in determining the valuation of a company because it takes into account the economic rights of the recently issued security in relation to the rights of other equity securities within the capital structure.
The weighted-average assumptions in the Black-Scholes option-pricing model used to determine the fair value of stock options granted were as follows:
Stock-based Compensation Expense
The following sets forth the total stock-based compensation expense for the stock options included in the statements of operations:
As of September 30, 2021, total unrecognized compensation cost related to stock awards was $3.4 million and is expected to be recognized over a weighted-average period of 2.52 years.
The entire disclosure for share-based payment arrangement.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef