(8)  Equity-based Compensation and Warrants

(a) Stock Options

In July 2020, the Company adopted the 2020 Equity Incentive Plan (the Incentive Plan), which authorized the Company to grant up to 4,300,000 shares of common stock to eligible employees, directors, and consultants to the Company in the form of stock options, restricted stock units, and other various equity awards, including any shares subject to stock options or other awards granted under the Company’s prior stock option plan that expire or terminate for any reason (other than being exercised in full) or are cancelled in accordance with the terms of the prior stock option plan. The Incentive Plan also includes an annual evergreen increase, and the amount, terms of grants, and exercisability provisions are determined by the board of directors. The term of an award may be up to 10 years and options generally vest over four years, with one quarter of an award vesting one year after grant and the remainder vesting on a monthly basis over three years. As of August 31, 2020, there were 3,981,071 shares of common stock available for future grants under the Incentive Plan.

In July 2020, the Board of Directors adopted the Company’s 2020 Employee Stock Purchase Plan (the ESPP), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO. The total shares of common stock initially reserved under the ESPP is limited to 1,100,000 shares.  There was no activity during the second fiscal quarter ended August 31, 2020.

The following table summarizes the amount of stock-based compensation included in the consolidated statements of operations:

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The following is a summary of stock option activity under the Incentive Plan:

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The aggregate intrinsic value of stock options exercised was $5,676 and $7,806 for the three and six months ended August 31, 2020, respectively.  As of August 31, 2020, approximately $27,203 of unrecognized compensation expense related to our stock options is expected to be recognized over a weighted average period of 2.2 years.

During June 2020, the Company issued 525,907 fully-vested stock options in lieu of cash payments related to the Company’s fiscal 2020 bonus with a value of $5,735.   These options are included in the table above.

(b)  Common Stock Warrants

The following tables summarize the activity for the Company’s warrants for the six months ended August 31, 2020:

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On June 29, 2015, the Company issued a warrant to its initial customer to purchase up to 200,000 common shares. Based on the vesting provisions and the remaining period over which the warrant was exercisable, the maximum number of shares that could vest pursuant to the warrant was 160,000 shares of common stock, all of which were exercised in March 2020.

On July 7, 2020, upon the closing of our IPO, 1,401,836 shares of common stock were issued upon the automatic net exercise of all warrants that were outstanding as of the IPO date.  There were no warrants outstanding as of August 31, 2020.