Stock-based Compensation

2013 Stock Option and Grant Plan

In February 2013, the board of directors adopted and the Company’s stockholders approved the 2013 Stock Option and Grant Plan (the “2013 Plan”), as amended and restated, under which it could grant incentive stock options (“ISOs”), non-qualified stock options, RSAs and RSUs to eligible employees, officers, directors, and consultants. The 2013 Plan was subsequently amended in January 2015, April 2015, July 2015, March 2016 and October 2016 to allow for the issuance of additional shares of common stock.

2017 Stock Option and Incentive Plan

In January 2017, the board of directors adopted and the Company’s stockholders approved the 2017 Stock Option and Incentive Plan (the “2017 Plan”), which became effective immediately prior to the effectiveness of the Company’s IPO. Upon the adoption of the 2017 Plan, no further awards will be granted under the 2013 Plan.

The 2017 Plan provides for the grant of ISOs, non-qualified stock options, RSAs, RSUs, stock appreciation rights and other stock-based awards. The Company’s employees, officers, directors and consultants and advisors are eligible to receive awards under the 2017 Plan. The terms of awards, including vesting requirements, are determined by the Board of Directors, subject to the provisions of the 2017 Plan.

The Company initially registered 1,753,758 shares of common stock under the 2017 Plan, which was comprised of (i) 1,510,000 shares of common stock reserved for issuance under the 2017 Plan, plus (ii) 243,758 shares of common stock originally reserved for issuance under the 2013 Plan that became available for issuance under the 2017 Plan upon the completion of the Company’s IPO. The 2017 Plan also provides that an additional number of shares will automatically be added to the shares authorized for issuance under the 2017 Plan on January 1, 2018 and each January 1^st thereafter. The number of shares added each year will be equal to the lesser of (i) 4% of the outstanding shares on the immediately preceding December 31^st or (ii) such amount as determined by the compensation committee of the board of directors. Effective January 1, 2018 and 2019, 1,290,609 and 1,317,935 additional shares, respectively, were automatically added to the shares authorized for issuance under the 2017 Plan.

As of December 31, 2019, there were 1,288,186 shares available for future issuance under the 2017 Plan.

2017 Employee Stock Purchase Plan

In January 2017, the board of directors adopted and the Company’s stockholders approved the 2017 Employee Stock Purchase Plan (the “2017 ESPP”), which became effective upon the closing of the Company’s IPO. The Company initially reserved 302,000 shares of common stock for future issuance under the 2017 ESPP. The 2017 ESPP also provides that an additional number of shares will automatically be added to the shares authorized for issuance under the 2017 ESPP on January 1, 2018 and each January 1^st thereafter through January 1, 2027. The number of shares added each year will be equal to the lesser of (i) 1% of the outstanding shares on the immediately preceding December 31^st,(ii) 603,000 shares or (iii) such amount as determined by the Compensation Committee of the Board of Directors. Effective January 1, 2018 and 2019, 322,652 and 329,483 additional shares, respectively, were automatically added to the shares authorized for issuance under the 2017 ESPP. No offering periods under the 2017 ESPP had been initiated as of December 31, 2019.

Stock-based Compensation Expense

Total stock-based compensation expense recognized in the consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2019 and 2018 was as follows (in thousands):



	Year Ended December 31,
	2019		2018
Research and development	$	4,353	$	4,540
General and administrative	5,256		4,867
Total stock-based compensation expense	$	9,609	$	9,407

RSA Activity

Pursuant to RSA agreements originally issued under the terms of the 2013 Plan, the Company, at its discretion, has the option to repurchase unvested shares underlying RSAs at the initial purchase price if the employees or non-employees terminate their service relationships with the Company. The shares underlying RSAs are recorded in stockholders’ equity as they vest.

The following table summarizes RSA activity for the year ended December 31, 2019 (in thousands, except per share amounts):



	RSAs		Weighted-Average Grant Date Fair Value per Share
Unvested as of December 31, 2018	7		$	—
Issued	—		$	—
Vested	(7	)	$	—
Repurchased	—		$	—
Unvested as of December 31, 2019	—		$	—

The aggregate fair value of RSAs that vested during each of the years ended December 31, 2019 and 2018, based upon the fair values of the stock underlying the RSAs on the day of vesting, was less than $0.1 million.

RSU Activity

The Company has also granted RSUs to its employees under the 2017 Plan. The following table summarizes RSU activity for the year ended December 31, 2019 (in thousands, except per share amounts):



	RSUs		Weighted-Average Grant Date Fair Value per Share
Unvested as of December 31, 2018	371		$	8.02
Issued	354		$	4.40
Vested	(157	)	$	8.02
Cancelled	(108	)	$	6.40
Unvested as of December 31, 2019	460		$	5.61

The aggregate fair value of RSUs vested during the year ended December 31, 2019, based upon the fair values of the stock underlying the RSUs on the day of vesting, was $0.7 million. No RSUs vested during the year ended December 31, 2018.

As of December 31, 2019, there was unrecognized stock-based compensation expense related to unvested RSUs of $1.7 million, which the Company expects to recognize over a weighted-average period of approximately 1.6 years.

Stock Option Activity

The fair value of stock options granted to employees and directors during the years ended December 31, 2019 and 2018 was calculated on the date of grant using the following weighted-average assumptions:



	Year Ended December 31,
	2019		2018
Risk-free interest rate	2.2	%	2.7	%
Expected dividend yield	—	%	—	%
Expected term (in years)	6.0		6.0
Expected volatility	69.4	%	65.2	%

Using the Black-Scholes option pricing model, the weighted-average grant date fair value of stock options granted to employees and directors during the years ended December 31, 2019 and 2018 was $2.76 and $12.88 per share, respectively.

The following table summarizes changes in stock option activity during the year ended December 31, 2019 (in thousands, except per share amounts):



	Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2018	5,023		$	10.23	7.6	$	3,133
Granted	1,418		$	4.37
Exercised	(185	)	$	2.36
Cancelled	(521	)	$	13.19
Outstanding at December 31, 2019	5,735		$	8.76	7.2	$	18,959
Exercisable at December 31, 2019	3,586		$	7.41	6.4	$	13,864

The aggregate intrinsic value of stock options exercised during the years ended December 31, 2019 and 2018 was $0.6 million and $5.7 million, respectively.

As of December 31, 2019, there was unrecognized stock-based compensation expense related to unvested stock options of $13.0 million, which the Company expects to recognize over a weighted-average period of approximately 2.3 years.