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, restricted stock awards (“RSAs”) and restricted stock units (“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”). 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 on Form S-8 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, 2019 and 2020, 1,290,609, 1,317,935 and 1,349,526 additional shares, respectively, were automatically added to the shares authorized for issuance under the 2017 Plan.

As of March 31, 2020, there were 1,320,488 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”). 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, 2019 and 2020, 322,652, 329,483 and 337,381 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 March 31, 2020.

Stock-based Compensation Expense

Total stock-based compensation expense recognized in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2020 and 2019 was as follows (in thousands):



	Three Months Ended March 31,
	2020		2019
Research and development	$	1,181	$	1,097
General and administrative	1,437		1,445
Total stock-based compensation expense	$	2,618	$	2,542

RSU Activity

The Company has also granted RSUs to its employees under the 2017 Plan. The following table summarizes RSU activity for the three months ended March 31, 2020 (in thousands, except per share amounts):



	RSUs		Weighted-Average Grant Date Fair Value per Share
Unvested as of December 31, 2019	460		$	5.61
Issued	408		$	6.55
Vested	(101	)	$	4.40
Cancelled	(7	)	$	6.83
Unvested as of March 31, 2020	760		$	6.27

The aggregate fair value of RSUs that vested during the three months ended March 31, 2020, based upon the fair values of the stock underlying the RSUs on the day of vesting, was $0.8 million. No RSUs vested during the three months ended March 31, 2019.

As of March 31, 2020, there was unrecognized stock-based compensation expense related to unvested RSUs of $3.7 million, which the Company expects to recognize over a weighted-average period of approximately 2.0 years.

Stock Option Activity

The fair value of stock options granted during the three months ended March 31, 2020 and 2019 was calculated on the date of grant using the following weighted-average assumptions:



	Three Months Ended March 31,
	2020		2019
Risk-free interest rate	1.4	%	2.6	%
Expected dividend yield	—	%	—	%
Expected term (in years)	6.1		6.1
Expected volatility	71.4	%	68.9	%

Using the Black-Scholes option pricing model, the weighted-average grant date fair value of stock options granted during the three months ended March 31, 2020 and 2019 was $4.23 per share and $2.77 per share, respectively.

The following table summarizes stock option activity during the three months ended March 31, 2020 (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, 2019	5,735		$	8.76	7.2	$	18,959
Granted	957		$	6.66
Exercised	(9	)	$	4.21
Cancelled	(40	)	$	9.18
Outstanding at March 31, 2020	6,643		$	8.46	7.3	$	5,855
Exercisable at March 31, 2020	3,845		$	7.69	6.2	$	5,264

The aggregate intrinsic value of stock options exercised during each of the three months ended March 31, 2020 and 2019 was less than $0.1 million.

As of March 31, 2020, there was unrecognized stock-based compensation expense related to unvested stock options of $14.8 million, which the Company expects to recognize over a weighted-average period of approximately 2.6 years.