Annual report pursuant to Section 13 and 15(d)

Stock-based Compensation

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Stock-based Compensation
12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock-based Compensation Stock-based Compensation
A summary of the Company’s stock-based compensation expense as recognized on the consolidated statements of operations is presented in thousands below:
Years ended December 31,
2021 2020 2019
Cost of revenue $ 617  $ 166  $ 102 
Research and development 1,924  1,307  455 
Sales and marketing 3,495  1,794  1,050 
General and administrative 4,630  2,917  1,885 
Total stock-based compensation expense $ 10,666  $ 6,184  $ 3,492 
2021 Equity Incentive Plan

In September 2021, the Company’s board of directors adopted the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) as a successor to the 2012 Equity Incentive Plan (the “2012 Plan”) with the purpose of granting stock-based awards to employees, directors, officers and consultants such as stock options, restricted stock awards and restricted stock units (RSUs). The Company’s compensation committee administers the 2021 Plan. A total of 7,276,000 shares of Class A common stock were initially available for issuance under the 2021 Plan. In addition, the shares reserved for issuance under the 2021 Plan will also include a number of shares of Class A common stock equal to the number of shares of Class B common stock subject to awards granted under the 2012 Plan that, on or after the termination of the 2012 Plan, expire or otherwise terminate without having been exercised in full or are forfeited to or repurchased by the Company (provided that the maximum number of shares that may be added to the 2021 Plan pursuant to this sentence is 14,913,309 shares). The number of shares of the Company’s Class A common stock available for issuance under the 2021 Plan is subject to an annual increase on the first day of each fiscal year beginning on January 1, 2022, equal to the lesser of: (i) 8,085,000 shares; (ii) 5% of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding year; or (iii) such other amount as the Company’s board of directors may determine.


2012 Equity Incentive Plan

The 2012 Plan, which was recently amended in March 2021, was terminated in September 2021, in connection with the adoption of the Company’s 2021 Plan, and stock-based awards are no longer granted under the 2012 Plan. However, the 2012 Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder.

The Company’s 2012 Plan permitted the grant of incentive stock options, non-statutory stock options, restricted stock units (“RSUs”) and stock appreciation rights. As of December 31, 2021, the Company has not issued any stock appreciation rights. The Company issued 240,000 and 111,111 RSUs in 2016 and 2018, respectively. The vesting terms included time, service and performance conditions and the occurrence of a liquidity event. Upon the Company’s IPO, a liquidity event which occurred in September, 2021, stock-based compensation expense of $0.9 million was recognized for the RSUs.

2021 Employee Stock Purchase Plan

In September 2021, the Company’s board of directors adopted and the stockholders approved the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective concurrent with the completion of the IPO, and established an initial reserve of 1,617,000 shares of common stock. The 2021 ESPP provides for annual increases in the number of shares available for issuance on the first day of each fiscal year beginning on January 1, 2022, equal to the lesser of: (i) 1,617,000 shares; (ii) 1% of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding year; or (iii) such other amount determined by the plan administrator. As of December 31, 2021, no shares had been granted under the 2021 ESPP.
Except for the initial offering period, the ESPP provides for a 12-month offering period beginning November 15 and May 15 of each year, and each offering period will consist of two six-month purchase periods. The initial offering period began on October 1, 2021 and will end on November 15, 2022. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the offering date, or (2) the fair market value of its common stock on the purchase date.
Restricted Stock Units

The Company grants RSUs that generally vest over one to four years. The weighted-average grant-date fair value of RSUs granted during the year ended December 31, 2021, was $47.2 million. There were no RSUs granted in 2020 and 2019. As of December 31, 2021, there was $45.4 million of total unrecognized compensation, which will be recognized over the remaining weighted-average vesting period of 3.9 years using the straight-line method. A summary of the Company’s unvested RSUs and activity for the year ended December 31, 2021 is as follows:
Shares Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2020 351,111  $ 2.54 
Granted 1,716,193  27.49 
Vested (336,111) 2.54 
Canceled (28,469) 27.49 
Outstanding at December 31, 2021 1,702,724  27.49 

Stock Options

A summary of the Company’s stock option activity and related information for the year ended December 31, 2021 is as follows:
Number of Awards
Outstanding
Weighted-
Average Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
(Years)
Aggregate
Intrinsic
Value (in
thousands)
Balances as of December 31, 2020 15,114,560  $ 3.15  6.7 $ 70,413 
Options granted 2,443,785  14.30 
Options exercised (2,510,947) 1.97 
Options cancelled (827,811) 6.11 
Balances as of December 31, 2021 14,219,587  5.10  6.4 306,981 
As of December 31, 2021
Vested and expected to vest 14,219,587  5.10  6.4 306,981 
Vested and exercisable 8,907,499  2.95  5.3 211,435 
As of December 31, 2021, there was $24.4 million of unrecognized compensation expense related to non-vested stock options granted under the Plan. That expense is expected to be recognized over a weighted-average period of 3.0 years.
2021 Employee Stock Purchase Plan
All stock-based compensation to employees, including the purchase rights issued under the Company's 2021 ESPP, is based on the fair value of the awards on the date of grant. This cost is recognized as an expense following the straight-line attribution method, over the requisite service period and over the offering period, for the purchase rights issued under the 2021 ESPP. See Note 2. Summary of Significant Accounting Policies for a discussion of the the assumptions used to estimate the fair value of the purchase rights.