11. Stock Option and Incentive Plans

Amended and Restated 2008 Equity Incentive Plan

In July 2008, the Company adopted the 2008 Equity Incentive Plan (the “Plan”). On February 26, 2013, the board of directors approved an amended and restated plan (the “Amended Plan”) under which the number of shares of common stock available for issuance was 1,964. For new awards, the period that vested awards would remain exercisable upon termination of service was reduced from ten years to two years. The board of directors also increased the number of shares of common stock available under the Company’s Amended Plan on February 24, 2014 and April 29, 2014 to 2,321 and 2,946, respectively. As of the closing of the Company’s IPO, there were no further grants made under the Amended Plan.

2014 Omnibus Incentive Plan

In April 2014, the Company’s board of directors adopted the 2014 Omnibus Incentive Plan (the “2014 Plan”). The 2014 Plan was approved by the Company’s shareholders on July 3, 2014. The 2014 Plan allows for the granting of incentive and non-qualified stock options, restricted stock and stock unit awards, stock appreciation rights and other performance-based awards to the Company’s employees, members of the board of directors and consultants of the Company. On July 28, 2014, the effective date of the 2014 Plan, the number of shares of common stock reserved pursuant to the 2014 Plan was 715. The 2014 Plan provides for an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ended December 31, 2015 and ending on January 1, 2024,

equal to the lesser of (i) 4% of the outstanding shares of common stock on December 31 immediately preceding such date or (ii) a lesser amount determined by the Company’s board of directors. Consistent with the provision for an annual increase, an additional 77,157 shares of common stock have been reserved under the 2014 Plan as of January 1, 2023.

2021 Employment Inducement Omnibus Incentive Plan

In September 2021, the Company’s board of directors adopted the 2021 Employment Inducement Omnibus Incentive Plan (the “2021 Plan”), under which the number of shares of common stock reserved for issuance was 12,500. The 2021 Plan allows for the granting of non-qualified stock options, restricted stock and stock unit awards, stock appreciation rights and other performance-based awards only to newly hired employees of the Company who have not previously been an employee or member of the board, or an employee who is being rehired following a bona fide period of non-employment by the Company.

2022 Employee Stock Purchase Plan

In March 2022, the Company’s board of directors adopted the 2022 Employee Stock Purchase Plan (the “2022 ESPP”). The 2022 ESPP was approved by the Company’s shareholders on May 17, 2022. The 2022 ESPP allows employees to buy Company stock through after-tax payroll deductions at a discount from market value. One component of the 2022 ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code, whereas the other component authorizes the grant of rights which need not qualify as rights granted pursuant to an “employee stock purchase plan” under Section 423. The number of shares of common stock initially available for issuance under the 2022 ESPP was 10,000 shares of common stock. As of September 30, 2023, no purchase rights were outstanding under the 2022 ESPP.

Under the 2022 ESPP, employees may purchase common stock through after-tax payroll deductions. In the absence of a contrary designation, the purchase price will be 85% of the lower of the fair market value of our common stock on the first trading day of an offering period or the last trading day of an offering period.

The Company recognized compensation expense for stock-based compensation based on the fair value of the underlying instrument. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. A summary of stock option activity for the nine months ended September 30, 2023, is summarized as follows:

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. There were no options granted during the three months ended September 30, 2023. The weighted average grant date fair value of options granted during the three months ended September 30, 2022 was $24.00, and during the nine months ended September 30, 2023 and 2022 was $5.02 and $244.80, respectively. Total compensation expense recognized amounted to $0.7 million and $1.0 million for the three months ended September 30, 2023 and 2022, respectively, and $2.4 million and $2.9 million for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, the total remaining unrecognized compensation cost related to unvested stock options was approximately $2.2 million which will be recognized over a weighted average period of approximately 1.7 years.

Risk-free interest rate—The Company estimated the risk-free interest rate in reference to yield on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award.

Expected dividend yield—The Company estimated the expected dividend yield based on consideration of its historical dividend experience and future dividend expectations. The Company has not historically declared or paid dividends to common stockholders. Moreover, it does not intend to pay dividends in the future, but instead expects to retain any earnings to invest in its continued growth.

Expected term—The Company based expected term on the midpoint of the vesting period and the contractual term of each respective option grant

Expected volatility—The Company estimated the expected volatility based on the Company’s historical volatility data.