Equity

3 Months Ended

Mar. 31, 2021

(a)Common stock and pre-funded warrants

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.000001 as of March 31, 2021. As of March 31, 2021 and December 31, 2020 the total number of shares of common stock issued and outstanding was 42,326,033 and 42,196,296, respectively.

As of March 31, 2021, the Company also has pre-funded warrants outstanding to purchase an aggregate of 12,663,010 shares of common stock. The pre-funded warrants are exercisable at any time, with 61 days' notice, for an exercise price of 0.000001, except that the pre-funded warrants cannot be exercised by the stockholders if, after giving effect thereto, the stockholders would beneficially own more than 9.99% of the outstanding common stock, subject to certain exceptions. The holders of the pre-funded warrants will not have the right to vote on any matter except to the extent required by Delaware law.

(b)Stock-based compensation expense

Stock-based compensation expense is classified in the condensed consolidated statement of operations as follows:


	Three Months Ended March 31,
(in thousands)	2021		2020
Research and development expenses	$	1,018	$	283
General and administrative expenses	1,402		401
Total stock-based compensation expense	$	2,420	$	683

Total unrecognized compensation cost for all stock-based compensation plans was $23.8 million as of March 31, 2021. This cost is expected to be recognized over a weighted average remaining vesting period of 3.00 years.

The fair values of stock options granted are estimated using the Black-Scholes option pricing model with the following weighted average assumptions:


	Three Months Ended March 31,
	2021		2020
Expected volatility	89.68	%	90.00	%
Expected dividends	0	%	0	%
Expected terms (years)	6.06		6.05
Risk free rate	0.61	%	0.78	%

(c)Stock options

A summary of the Company’s stock option activity and related information for the three months ended March 31, 2021 is as follows:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value (in Thousands)
Outstanding at December 31, 2020	6,846,289	$	6.42	8.71	$	53,127
Options granted	140,800	$	12.83
Options exercised	(91,737)	$	3.07
Options cancelled/forfeited	(3,774)	$	16.63
Outstanding at March 31, 2021	6,891,578	$	6.59	8.51	$	40,710
Exercisable as of March 31, 2021	2,205,214	$	5.04	7.68	$	16,908

During the three months ended March 31, 2021, 91,737 shares of common stock were issued upon exercise of options with an aggregate intrinsic value of $1.0 million. During the three months ended March 31, 2020, 376,311 shares of common stock were issued upon exercise of options with an aggregate intrinsic value of $1.3 million. The weighted-average grant date fair value of options granted during the three months ended March 31, 2021 and March 31, 2020 was $9.43 and $5.62 per share, respectively.

(d)Restricted stock units

A summary of the Company’s restricted stock unit activity and related information for the three months ended March 31, 2021 is as follows:


	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2020	186,500	$	8.19
Restricted stock units granted	—	$	—
Restricted stock units vested	(38,000)	$	5.42
Restricted stock units forfeited	—	$	—
Non-vested at March 31, 2021	148,500	$	8.89

(e)Employee stock purchase plan

The Company’s 2020 Employee Stock Purchase Plan (“2020 ESPP”) was adopted by the Company’s Board of Directors in March 2020 and approved by the Company’s stockholders in May 2020. A total of 759,936 shares of common stock have been reserved for issuance under the 2020 ESPP.

Subject to share and dollar limits as described in the plan, the 2020 ESPP allows eligible employees to contribute, through payroll deductions, up to 15% of their earnings for the purchase of shares of the Company’s common stock at the lower of 85% of the closing price of the Company’s common stock on the first trading day of the offering period or 85% of the closing price of the Company’s common stock on the last trading day of the offering period. There are two six-month offering periods during each fiscal year, ending on May 15 and November 15.