In March 2015, the Company adopted the 2015 Equity Incentive Plan (“2015 Plan”), administered by the board of directors, and provides for the Company to sell or issue common stock or restricted common stock, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, members of the board of directors and consultants of the Company. Under the terms of the 2015 Plan, the exercise prices, vesting and other restrictions may be determined at the discretion of the board of directors, or their committee if so delegated, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the share of common stock on the date of grant, the term of stock options may not be greater than ten years for all grants, and for grantees holding more than 10% of the total combined voting power of all classes of stock, the term may not be greater than five years.

The Company granted options under the 2015 Plan until April 2016 when it was terminated as to future awards, although it continues to govern the terms of options that remain outstanding under the 2015 Plan.

As of December 31, 2018, a total of 268,716 shares of common stock are subject to options outstanding under the 2015 Plan and will become available under the 2016 Equity Incentive Plan (“2016 Plan”) to the extent the options are forfeited or lapse unexercised.

The 2016 Plan became effective in April 2016 and serves as the successor to the 2015 Plan. Under the 2016 Plan, the Company may grant stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards, and stock bonuses. The 2016 Plan provides for an initial reserve of 1,100,000 shares of common stock, plus 509,869 shares of common stock remaining under the 2015 Plan, and any share awards that subsequently are forfeited or lapse unexercised under the 2015 Plan. The shares reserved exclude shares of common stock reserved for issuance under the 2015 Plan.

In October 2018, the 2016 plan was amended to increase the number of shares of common stock reserved for issuance thereunder by 1,759,602 shares, extend the term of the 2016 Plan through August 7, 2028, and provide for an automatic increase in the number of shares reserved for issuance thereunder on January 1 of each year for the remaining term of the plan equal to (a) 4.0% of the number of issued and outstanding shares of common stock on December 31 of the immediately preceding year, or (b) a lesser amount as approved by the board each year. The superseded 2016 Plan provision to provide an annual increase in the number of shares available for issuance required the Company’s board of directors to approve the increase, up to 4%, prior to January 1 of each relevant year. As a result of the operation of each of these provisions, on January 1, 2019, 2018, and 2017, an additional 965,603, 666,807, and 537,233 shares, respectively, became available for issuance under the 2016 Plan.

As of December 31, 2018, the total number of shares reserved for issuance under the 2016 Plan was 4,750,902, of which 2,760,071 shares were subject to outstanding option awards.

In February 2018, the board of directors approved and adopted the 2018 Equity Inducement Plan (“2018 Plan”), which became effective on the same date. The board of directors approved an initial reserve of 1,100,000 shares of common stock to be used exclusively for individuals who were not previously employees or directors, or following a bona fide period of non-employment, as an inducement material to the individual entering into employment with the Company. Nonqualified stock options or restricted stock units may be granted under the 2018 Plan at the discretion of the Compensation Committee or the board of directors. The Company did not seek stockholder approval of the 2018 Plan pursuant to Nasdaq Rule 5635(c)(4).

As of December 31, 2018, the total number of shares reserved for issuance under the 2018 Plan was 1,100,000, of which 113,900 shares were subject to outstanding option awards.

Under the 2016 Plan and 2018 Plan, the Company may grant stock-based awards with service conditions (“service-based” awards), performance conditions (“performance-based” awards), and market conditions (“market-based” awards). Service-based awards granted under the 2018 Plan, 2016 Plan, and 2015 Plan generally vest over four years and expire after ten years, although awards have been granted with vesting terms less than four years.

The 2016 Employee Stock Purchase Plan (“2016 ESPP”) became effective in April 2016. A total of 165,000 shares of common stock were reserved for issuance under the 2016 ESPP. Eligible employees may purchase shares of common stock under the 2016 ESPP at 85% of the lower of the fair market value of the Company’s common stock as of the first or the last day of each offering period. Employees are limited to contributing 15% of the employee’s eligible compensation and may not purchase more than $25,000 of stock during any calendar year or more than 2,000 shares during any one purchase period or a lesser amount determined by the board of directors. The 2016 ESPP will terminate ten years from the first purchase date under the plan, unless terminated earlier by the board of directors.

As of December 31, 2018, the reserve remaining and available for future issuance under the 2016 ESPP was 50,851 shares.

In June 2018, the 2016 ESPP was amended to provide for an automatic annual increase in the number of shares reserved for issuance thereunder on January 1 of each year for the remaining term of the year equal to (a) 1.0% of the number of issued and outstanding shares of common stock on December 31 of the immediately preceding year, or (b) a lesser amount as approved by the board of directors each year. As a result of the operation of this provision, on January 1, 2019, an additional 241,400 shares became available for issuance under the 2016 ESPP.

The following table summarizes employee and non-employee stock option activity for the year ended December 31, 2018:

	Shares Issuable Under Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding as of December 31, 2017		2,361,360		$	5.21		8.72	$	2,482
Granted		1,668,800			8.03
Exercised		(521,665	)		5.42
Forfeited		(365,808	)		5.20
Outstanding as of December 31, 2018		3,142,687		$	6.67		8.52	$	4,798
Options vested and expected to vest as of December 31, 2018		2,939,785		$	6.49		8.45	$	4,786
Options exercisable as of December 31, 2018		1,160,819		$	5.85		7.68	$	2,470

The aggregate intrinsic value of options outstanding, exercisable, vested and expected to vest were calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock as of the reporting date.

For the years ended December 31, 2018, 2017, and 2016, the weighted-average grant date fair value of options granted was $8.03, $5.22, and $7.04, respectively. The total intrinsic value of options exercised during the years ended December 31, 2018 and 2017 was $1.9 million and $0.3 million, respectively. There were no option exercises during the year ended December 31, 2016.

There were no stock options issued to non-employees during the years ended December 31, 2018, 2017, and 2016. For the year ended December 31, 2018, 6,626 non-employee stock options vested in the period. For the years ended December 31, 2017 and 2016, no non-employee stock options vested in the period.

The Company issued 253,232 restricted stock awards (“RSAs”) during the year ended December 31, 2015 with time-based and performance-based vesting conditions. Unvested shares of restricted common stock may not be sold or transferred by the holder. These restrictions lapse according to the time-based vesting conditions of each award.

The following table summarizes employee and non-employee restricted stock activity for the year ended December 31, 2018:

	Shares			Weighted Average Grant Date Fair Value
Unvested restricted common stock as of December 31, 2017		33,307		$	1.84
Granted		—			—
Vested		(26,444	)		1.87
Forfeited		—			—
Unvested restricted common stock as of December 31, 2018		6,863		$	1.73

The fair value of RSAs that vested during the years ended December 31, 2018, 2017, and 2016 was $0.2 million, $0.2 million, and $0.3 million, respectively. There were no RSAs granted to non-employees during the years ended December 31, 2018, 2017, and 2016. For the year ended December 31, 2018, 21,645 non-employee RSAs vested in the period. For the years ended December 31, 2017 and 2016, no non-employee RSAs vested in the period.

Total stock-based compensation expense recognized from the Company’s equity incentive plans, 2018 Plan, and the 2016 ESPP for the years ended December 31, 2018, 2017, and 2016 was as follows (in thousands):

	Year Ended December 31,
	2018				2017				2016
	Employees		Non-Employees		Employees		Non-Employees		Employees		Non-Employees
Research and development	$	1,440	$	234	$	961	$	—	$	389	$	—
General and administrative		2,606		—		1,531		—		832		—
Total stock-based compensation expense	$	4,046	$	234	$	2,492	$	—	$	1,221	$	—

No related tax benefits were recognized for the years ended December 31, 2018, 2017, and 2016 (see Note 11).

The employee and non-employee awards contain both performance and service-based vesting conditions. No expense was recognized for the unvested employee and non-employee awards with only a performance condition for the years ended December 31, 2018, 2017, and 2016. The performance-based vesting conditions represent specific performance targets. Compensation expense for employee and non-employee share-based payment awards with performance conditions is recognized when the performance condition is deemed probable.

In November 2018, the Company’s board of directors approved the acceleration of vesting and an extension in the exercise period for all outstanding equity awards held by one director upon his resignation (see Note 14). The result was a modification of 86,252 outstanding stock options and 43,290 restricted stock awards. The incremental fair value of $0.3 million, in connection with the modification of the awards, was recognized as stock compensation expense upon resignation with no future service or performance conditions required.

As of December 31, 2018, the Company had an aggregate of $8.6 million of unrecognized stock-based compensation expense for options outstanding, which is expected to be recognized over a weighted average period of 2.7 years. There was no unrecognized stock-based compensation expense for RSAs outstanding as of December 31, 2018.

In determining the fair value of the stock-based awards, the Company uses the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine.

The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term). The Company utilizes this method due to lack of historical exercise data and the plain-vanilla nature of the Company’s stock-based awards.

Since the Company was privately held through April 2016, it alone does not have the relevant company-specific historical data to support its expected volatility. As such, the Company has used an average of expected volatilities based on the volatilities of a representative group of publicly traded biopharmaceutical companies over a period equal to the expected term of the stock option grants. Subsequent to the IPO, the Company began to consider the Company’s own historic volatility. However, due to its limited history as a public company, the Company still uses peer company data to assist in this analysis. For purposes of identifying comparable companies, the Company selected companies with comparable characteristics to it, including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. The Company intends to consistently apply this process using the same or similar comparable entities until a sufficient amount of historical information regarding the volatility of the Company’s own share price becomes available.

The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option.

The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero.

The fair value of the stock options granted under the 2018 Plan, 2016 Plan, and 2015 Plan and the shares available for purchase under the 2016 ESPP were determined using the Black-Scholes option-pricing model. The following table summarizes the weighted-average assumptions used in calculating the fair value of the awards:

	Year Ended December 31,
	2018			2017			2016
2018 Plan, 2016 Plan, and 2015 Plan
Expected term (in years)		5.20			5.88			5.99
Expected volatility		74	%		86	%		87	%
Risk-free interest		2.42	%		2.00	%		1.28	%
Dividend yield		0	%		0	%		0	%
2016 ESPP
Expected term (in years)		0.50			0.50			0.45
Expected volatility		66	%		78	%		82	%
Risk-free interest		2.20	%		1.06	%		0.50	%
Dividend yield		0	%		0	%		0	%