In May 2019, the Company’s board of directors adopted and the Company’s stockholders approved the 2019 Incentive Award Plan (the “2019 Plan”), under which the Company may grant cash and equity-based incentive awards to the Company’s employees, consultants and directors. Following the effectiveness of the 2019 Plan, the Company will not make any further grants under the 2015 Equity Incentive Plan (the “2015 Plan”). However, the 2015 Plan continues to govern the terms and conditions of the outstanding awards granted under it. Shares of common stock subject to awards granted under the 2015 Plan that are forfeited or lapse unexercised and which

following the effective date of the 2019 Plan are not issued under the 2015 Plan will be available for issuance under the 2019 Plan.

Options granted under the 2019 Plan may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees and consultants.

The exercise price of an ISO and NSO shall not be less than 100% of the estimated fair value of the shares on the date of grant. The exercise price of an ISO granted to an employee who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of stock of the Company (a “10% stockholder”) shall be no less than 110% of the estimated fair value of the shares on the date of grant. Options granted under the 2019 Plan have a term of 10 years (or five years if granted to a 10% stockholder) and generally vest over a 4-year period with 1-year cliff vesting.

In 2015, the Company established its 2015 Plan which provides for the granting of stock options to employees and consultants of the Company. Options granted under the 2015 Plan may be either ISOs or NSOs.

In May 2019, the Company’s board of directors adopted and the Company’s stockholders approved the 2019 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides eligible employees with the opportunity to acquire an ownership interest in the Company through periodic payroll deductions up to 15% of eligible compensation. The offering period is determined by the Company in its discretion but may not exceed 27 months. The per-share purchase price on the applicable exercise date for an offering period is equal to the lesser of 85% of the fair market value of the common stock at either the first business day or last business day of the offering period, provided that no more than 4,000 shares of common stock may be purchased by any one employee during each offering period. The ESPP is intended to constitute an “employee stock purchase plan” under Section 423(b) of the Internal Revenue Code of 1986, as amended. As of June 30, 2022, a total of 942,386 shares of common stock were reserved for issuance under the ESPP, subject to an annual increase on January 1 of each year. For the six months ended June 30, 2022 and June 30, 2021, the Company recorded $0.2 million and $0.2 million, respectively, of compensation expense related to participation in the ESPP.

Total stock-based compensation expense recorded related to awards granted to employees and non-employees was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	1,603	$	873	$	2,901	$	1,669
General and administrative		1,441		1,185		2,748		2,307
Total stock-based compensation expense	$	3,044	$	2,058	$	5,649	$	3,976

Activity under the Company’s 2015 and 2019 Plans is set forth below:


				Outstanding Options
	Shares available for Grant			Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (Millions)
Balance, January 1, 2022		922,826			3,620,666		$	12.36		7.92	$	41.40
Additional shares authorized		1,541,322			—
Options granted		(1,552,180	)		1,552,180		$	12.72
Options exercised		—			(122,913	)	$	6.38
Options canceled		127,709			(127,709	)	$	12.84
Balance, June 30, 2022		1,039,677			4,922,224		$	12.61		8.26	$	14.60
Exercisable as of June 30, 2022					1,994,118		$	9.36		6.99	$	11.00
Vested and expected to vest as of June 30, 2022					4,922,224		$	12.61		8.26	$	14.60

The weighted-average grant-date fair value of options granted during the six months ended June 30, 2022 and June 30, 2021 was $9.43 and $15.71 per share, respectively. The aggregate intrinsic value of options exercised for the six months ended June 30, 2022 and June 30, 2021 was $1.0 million and $0.9 million, respectively. Intrinsic values are calculated as the difference between the exercise price of the underlying options and the fair value of the common stock on the date of exercise.

As of June 30, 2022 and December 31, 2021, total unrecognized stock-based compensation expense for stock options was $30.1 million and $22.2 million, respectively, which is expected to be recognized over a weighted-average period of 2.82 years and 2.61 years, respectively.

The Company had no repurchases of shares of common stock for the six months ended June 30, 2022 and 2021. There were no shares subject to repurchase as of June 30, 2022 and December 31, 2021.

The fair values of options were calculated using the assumptions set forth below:


	Three Months Ended June 30,		Six months Ended June 30,
	2022	2021	2022	2021
Expected term	6.1 years	5.5 - 6.1 years	6.1 years	5.5 - 6.1 years
Expected volatility	87.5% - 87.8%	96.0% - 102.8%	87.5% - 89.9%	96.0% - 103.6%
Risk-free interest rate	2.7% - 3.0%	0.8% - 1.1%	1.6% - 3.0%	0.6% - 1.1%
Dividend yield	0%	0%	0%	0%

Expected term. The expected term represents the weighted-average period the stock options are expected to remain outstanding and is based on the options’ vesting terms, contractual terms and industry peers, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.

Expected Volatility. As there is insufficient trading history for the Company’s common stock, the Company bases its computation of expected volatility on the historical stock price volatility of its own common stock and that of a representative peer group of public companies with similar characteristics to the Company. For purposes of identifying these peer companies, the Company considers the industry, stage of development, size and financial leverage of potential comparable companies. The historical volatility is calculated based on a period of time commensurate with the expected term assumption for each grant. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Risk-Free Interest Rate. The risk-free rate assumption is based on U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options.

Expected Dividend Rate. The Company has not paid and does not anticipate paying any dividends in the near future. Accordingly, the Company has estimated the dividend yield to be zero.

The fair value of the Company’s common stock is determined based on its closing market price on the date of grant.

As of June 30, 2022 and December 31, 2021, there were no shares of restricted stock outstanding. The restricted stock vests upon the achievement of pre-defined research milestones. The holder of restricted stock has voting and dividend rights with respect to such shares held without regard to vesting. Shares of restricted stock are subject to a right of repurchase at the original purchase price held by the Company. The total fair value of restricted stock vested during the six months ended June 30, 2022 and June 30, 2021 was zero and $0.1 million, respectively.