Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

Stock-Based Compensation
3 Months Ended
Jun. 30, 2021
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
2019 Equity Incentive Plan

In December 2019, in connection with the Business Combination, the Company’s stockholders approved the 2019 Equity Incentive Plan (the “2019 Plan”) and reserved 5,500,000 shares of common stock for issuance thereunder. The 2019 Plan became effective immediately upon the closing of the Business Combination. The maximum number of shares of common stock that may be issued pursuant to the exercise of incentive options under the 2019 Plan is 16,500,000. Each year on April 1, the number of common shares reserved for issuance increased automatically by 4.0% of the total number of shares of common stock outstanding on the last day of the preceding month. On April 1, 2021, 3,918,850 shares of common stock were added to the 2019 Plan pool in accordance with the evergreen provision of the 2019 Plan. As of June 30, 2021, options to purchase 3,506,449 shares of common stock and 931,923 restricted stock units (“RSUs”) were outstanding under the 2019 Plan and 7,128,692 shares of common stock remained available for future grant under the 2019 Plan.

2018 Equity Incentive Plan

Pursuant to the Share Exchange Agreement, upon the closing of the Business Combination, all vested or unvested outstanding options to purchase common shares of ISL under its 2018 Equity Incentive Plan (the “2018 Plan”) were automatically assumed by the Company and converted into options to purchase 4,408,287 shares of the Company’s common stock with no changes to the terms of the awards. As of the effective date of the 2019 Plan, no further stock awards have been or will be made under 2018 Plan. As of June 30, 2021, 3,205,740 stock options were outstanding under the 2018 Plan.

Stock Option Activity

A summary of the stock option activity under the Company’s equity incentive plans is as follows:

  Number of
Exercise Price
Term (Years)
Intrinsic Value
(in thousands)
Balance - March 31, 2021 7,988,999  $ 16.97  9.04 $ 25,958 
Granted 431,980  10.98 
Forfeited (1,708,790) 27.10 
Balance - June 30, 2021 6,712,189  $ 14.01  8.52 $ 8,142 
Exercisable - June 30, 2021 2,130,872  $ 10.50  8.00 $ 4,265 

The aggregate intrinsic value is calculated as the difference between the exercise price of all outstanding and exercisable stock options and the fair value of the Company’s common stock as of June 30, 2021. There were no stock options exercised during the three months ended June 30, 2021. The stock options granted during the three months ended June 30, 2021 and 2020 had a weighted-average fair value of $7.77 and $13.11 per share, respectively, at the grant date.

The Company estimated the fair value of each option on the date of grant using the Black-Scholes option pricing model applying the weighted-average assumptions in the following table:

  Three Months Ended June 30,
  2021 2020
Risk-free interest rate
0.94% - 1.07%
0.39% - 0.44%
Expected term, in years
6.03 - 6.11
5.56 - 6.11
Expected volatility
82.92% - 84.33%
78.16% - 80.14%
Expected dividend yield —% —%
Restricted Stock Unit Awards

A summary of RSUs activity under the Company’s equity incentive plans is as follows:
Number of RSUs Weighted- Average Grant Date Fair Value
Outstanding as of March 31, 2021
1,095,676  $ 20.43 
Issued 152,474  11.53 
Vested and settled (6,352) 24.86 
Forfeited (309,875) 20.90 
Outstanding as of June 30, 2021 931,923  $ 18.78 

Of the 931,923 RSUs outstanding as of June 30, 2021, 63,600 RSUs are vested and have not been settled, and the remaining 868,323 RSUs are not vested.

Stock-based Compensation Expense

For the three months ended June 30, 2021 and 2020, stock-based compensation expense under the Company’s equity incentive plans was as follows (in thousands):
  Three Months Ended June 30,
  2021 2020
Research and development expenses $ 37  $ 419 
General and administrative expenses 3,783  3,499 
Total stock-based compensation $ 3,820  $ 3,918 
As of June 30, 2021, total unrecognized compensation expense related to non-vested stock options and RSUs was $45.2 million and $14.1 million, respectively, which is expected to be recognized over the remaining weighted-average service period of 2.75 years and 2.38 years, respectively.

Stock-based Compensation Allocated to the Company by RSL

In relation to the RSL common share awards and options issued by RSL to employees of RSL, RSI, RSG and the Company, stock-based compensation expense of $0.1 million and $0.1 million was recorded for the three months ended June 30, 2021 and 2020, respectively, in the accompanying unaudited condensed consolidated statements of operations.


The Company’s Principal Executive Officer was granted 25,000 RSUs of RSL in January 2021. These RSUs have a requisite service period of eight years. These RSUs will vest upon the achievement of both a service requirement and RSL liquidity event requirement during the requisite service period.

As of June 30, 2021, the RSL liquidity event condition was deemed not probable of being met, and as such, for the three months ended June 30, 2021, the Company recorded no stock-based compensation expense related to these RSUs. At June 30, 2021, there was $1.0 million of unrecognized compensation expense related to unvested RSL RSUs. The Company will recognize this stock-based compensation expense upon achievement of the service requirement and liquidity event requirement through the requisite service period.