In March 2021, the Company amended its Certificate of Incorporation to authorize 400,000,000 shares of common stock and 40,000,000 shares of preferred stock.

In connection with the completion of the Company’s IPO on March 16, 2021, all outstanding shares of convertible preferred stock were converted into 25,485,955 shares of the Company’s common stock and outstanding warrants to purchase 148,848 shares of convertible preferred stock were converted into warrants to purchase 14,884 shares of the Company’s common stock.

As of December 31, 2020, the Company’s convertible preferred stock was classified as temporary equity on the accompanying balance sheet in accordance with authoritative guidance for the classification and measurement of potentially redeemable securities whose redemption is based upon certain change in control events outside of the Company’s control.

In March 2020, the Company sold 28,063,500 shares of Series C convertible preferred stock and received net cash proceeds totaling $28.0 million.

In October 2020, the Company entered into a Series D convertible preferred stock purchase agreement (Series D SPA) under which it issued 61,066,216 shares of Series D-1 convertible preferred stock, for cash, at a price of $0.7558 per share, for net proceeds of $46.2 million (the Initial Series D Closing). In addition, 5,088,851 shares of Series D-1 convertible preferred stock were issued to Nestlé in satisfaction of a deferred purchase price obligation of $3.8 million. The Series D SPA contained provisions that potentially obligated the Company to issue an additional 94,007,051 shares of Series D-2 convertible preferred stock at $0.8510 per share in an additional closing, 7,231,311 of which was issuable to Nestlé for satisfaction of deferred purchase price obligations of $6.2 million, upon the approval by the Company’s board of directors, or at the option of the investors who participated in the Initial Series D Closing, or upon the achievement of certain milestones as defined in the Series D SPA, which purchase right terminates upon certain specified events, including an initial public offering of the Company, if any.

The Company determined its obligation to issue additional shares of the Company’s Series D-2 convertible preferred stock in the Initial Series D Closing represented a freestanding financial instrument that required liability accounting. This freestanding preferred stock purchase right liability for the additional closing was recorded at fair value, with changes in fair value recognized in the statements of operations. As of the Initial Series D Closing, the estimated fair value of the preferred stock purchase right liability was $3.9 million. In January 2021, 93,995,300 shares of Series D-2 convertible preferred stock were issued, of which, 7,219,560 were issued to Nestlé for the satisfaction of deferred purchase price obligations of $6.1 million. Upon the closing of the sale of these shares, the preferred stock purchase right liability was remeasured to fair value and the change in fair value of $1.0 million was recorded in the statement of operations for the year ended December 31, 2021. The liability was then reclassified to stockholders’ equity.

The authorized, issued and outstanding shares of convertible preferred stock as of December 31, 2020 consist of the following (in thousands, except share and per share amounts):

	Shares Authorized		Shares Issued and Outstanding		Per Share Original Issue Price		Liquidation Value		Carrying Value
Series A		14,979,200		14,979,200	$	0.50	$	7,490	$	7,391
Series B		26,666,667		26,666,667		0.75		20,000		19,901
Series C		53,176,000		53,063,500		1.00		53,064		52,937
Series D-1		66,155,067		66,155,067		0.76		49,933		45,794
Series D-2		94,007,051		—		—		—		—
Total		254,983,985		160,864,434			$	130,487	$	126,023

The rights, preferences and privileges of the convertible preferred stock as of December 31, 2020 were as follows:

The Company shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock unless the holders of Series A , B, C, and D convertible preferred stock (collectively referred to as Preferred Stock) shall first receive, or simultaneously receive, a dividend on each outstanding share of Preferred Stock in an amount equal to (on an as-if-converted to Common Stock basis) the amount paid or set aside for each share of Common Stock. There have been no dividends declared by the board as of December 31, 2020.

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or Deemed Liquidation Event, as defined, each holder Series D Preferred Stock is entitled to receive, prior and in preference to any distributions to the holders of Series A preferred stock, Series B preferred stock, Series C preferred stock and common stock, an amount equal to the greater of (i) the Original Issue Price per share, plus any declared but unpaid dividends thereon or (ii) the amount such holder would have received if such holder had converted its shares into common stock immediately prior to such liquidation event. Subject to the prior payment of all amounts due to holders of Series D preferred stock, each holder of Series C Preferred Stock is entitled to receive, prior and in preference to any distributions to the holders of Series A preferred stock, Series B preferred stock and common stock, an amount equal to the greater of (i) the Original Issue Price per share, plus any declared but unpaid dividends thereon or (ii) the amount such holder would have received if such holder had converted its shares into common stock immediately prior to such liquidation event. Subject to the prior payment of all amounts due to holders of Series C preferred stock, each holder of Series A and Series B preferred stock is entitled to receive, prior and in preference to any distributions to the common stockholders, an amount equal to the greater of (i) the Original Issue Price per share, plus any declared but unpaid dividends thereon or (ii) the amount such holder would have received if such holder had converted its shares into common stock immediately prior to such liquidation event. In the event that the assets available for distribution to the holders of preferred stock are insufficient to pay such holders the full amounts to which they are entitled, the assets available for distribution will be distributed on a pro rata basis among the holders of the preferred stock in proportion to the respective amounts that would otherwise be payable in respect of such stock. After all preferential payments have been made to the holders of preferred stock, the remaining amounts would be distributed among the holders of the Preferred Stock and common stock, pro rata based on the number of shares held by each holder. The maximum aggregate amount the holders of Series A, B, C, D-1, and D-2 preferred stock are entitled to receive is $1.50, $2.25, $3.00, $2.2674, and $2.553 per share, respectively.

The shares of Preferred Stock are convertible into an equal number of shares of common stock, at the option of the holder, subject to certain anti-dilution adjustments. Each share of preferred stock is automatically converted into common stock, (A) at any time upon the affirmative election of the holders of at least a majority of the outstanding shares of the Preferred Stock, or (B) immediately upon the closing of a firmly underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of common stock for the account of the Company in which the pre-money valuation of the Company is at least $330.0 million and the aggregate gross proceeds, net of underwriting discount and commissions, to the Company is at least $75.0 million.

The holders of Preferred stock are entitled to one vote for each share of common stock into which it would convert and to vote as one class with the common stockholders on all matters. Also, the preferred stockholders have been granted certain rights with regard to the election of members of the Company’s Board of Directors.

The Company’s Preferred Stock have been classified as temporary equity in the accompanying balance sheets in accordance with authoritative guidance for the classification and measurement of potentially redeemable securities whose redemption is based upon certain change in control events outside of the Company’s control, including liquidation, sale or transfer of control of the Company. The Company has determined not to adjust the carrying values of the convertible preferred stock to the liquidation preferences of such shares because the occurrence of any such change of control event is not probable.

During 2016 and 2017, in connection with the founding of the Company, shares of common stock were sold to certain founders (the Founder Stock) at a price of $0.01 per share and which are subject to vesting, generally over a period of four years. The repurchase liability for the Founder Stock was nominal for all periods presented. For accounting purposes, the unvested shares are not considered to be outstanding. During the year ended December 31, 2020, 48,750 shares vested and there were no remaining unvested shares as of December 31, 2020.

As previously described in Note 5, in 2017, as consideration for a license agreement, the Company granted 335,000 shares of restricted common stock to Cedars-Sinai that vest on the anniversary date of the grant date over a three-year period. During the year ended December 31, 2020, 111,667 shares vested and there were no remaining unvested shares as of December 31, 2020.

In 2017, the Company adopted the 2017 Equity Incentive Plan (the 2017 Plan), which as amended, had 5,524,354 shares of common stock reserved for issuance. Under the 2017 Plan, the Company could grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are employees, non-employee directors or consultants of the Company or its subsidiaries. The 2017 Plan allowed for the early exercise of all stock options granted if authorized by the board of directors at the time of grant.

In February 2021, the board of directors adopted, and the Company’s stockholders approved, the 2021 Incentive Award Plan (the 2021 Plan), which became effective in connection with the IPO. Pursuant to the 2021 Plan, the Company ceased granting awards under the 2017 Plan. Under the 2021 Plan, the Company may grant stock options, restricted stock, dividend equivalents, restricted stock units, stock appreciation rights, and other stock or cash-based awards to individuals who are then employees, officers, non-employee directors or consultants of the Company. The number of shares initially available for issuance under awards granted pursuant to the 2021 Plan is the sum of (1) 3,600,000 shares of common stock, plus (2) any shares subject to outstanding awards under the 2017 Plan as of the effective date of the 2021 Plan that become available for issuance under the 2021 Plan thereafter in accordance with its terms. In addition, the number of shares of common stock available for issuance under the 2021 Plan will be increased annually on the first day of each fiscal year during the term of the 2021 Plan, beginning with the 2022 fiscal year, by an amount equal to the lesser of (a) 5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year or (b) such smaller number of shares as determined by the Company’s board of directors. At December 31, 2021, 1,856,063 shares remain available for issuance under the 2021 Plan.

The maximum term of the options granted under both the 2017 Plan and 2021 Plan is ten years. Grants generally vest at 25% one year from the vesting commencement date and ratably each month thereafter for a period of 36 months, subject to continuous service.

The Company’s stock option activity for the year ended December 31, 2021 is summarized in the following table:

	Number			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2020		2,930,248		$	2.90		9.3	$	2,290
Granted		3,943,984		$	18.23
Exercised		(151,436	)	$	1.57
Cancelled/forfeited		(248,757	)	$	5.44
Outstanding at December 31, 2021		6,474,039		$	12.18		8.5	$	177,130
Vested or expected to vest at December 31, 2021		6,474,039		$	12.18		8.5	$	177,130
Exercisable at December 31, 2021		1,505,832		$	3.51		6.1	$	54,256

The weighted-average grant date fair value of options granted during the year ended December 31, 2021 and 2020 was $12.15, and $5.93, respectively. The total intrinsic value of options exercised during the years ended December 31, 2021 and 2020 was $2.5 million and $0.3 million, respectively. The total fair value of options vested during the years ended December 31, 2021 and 2020 was $21.9 million and $0.9 million, respectively.

The grant date fair value of stock options was determined using the Black-Scholes option pricing model with the following assumptions:

	Year Ended December 31,
	2021	2020
Risk-free interest rate	0.2 – 1.4%	0.2 – 1.4%
Expected volatility	73.0 – 95.2%	61.5 – 71.8%
Expected term (in years)	5.3 – 6.1	6.1
Expected dividend yield	—%	—%

Expected Term—The expected term of options granted represents the period of time that the options are expected to be outstanding. Due to the lack of historical exercise history, the expected term of the Company’s employee stock options has been determined utilizing the simplified method for awards that qualify as plain-vanilla options.

Expected Volatility—The estimated volatility was based on the historical volatility of the common stock of a group of publicly traded companies deemed comparable to the Company.

Risk-Free Interest Rate—The risk-free interest rate is the implied yield in effect at the time of the option grant based on U.S. Treasury securities with contract maturities similar to the expected term of the Company’s stock options.

Dividend Rate—The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used.

The unvested shares of the early-exercised options are held in escrow until the stock option becomes fully vested or until the employee’s termination, whichever occurs first. The right to repurchase these shares lapses over the four-year vesting period. As of December 31, 2021 and 2020, the early exercise liability was approximately $35,000 and $0.1 million, respectively. For accounting purposes, the early exercise of options is not considered to be a substantive exercise until the underlying awards vest.

The following table summarizes the activity of the unvested common stock issued pursuant to an early exercise of stock option awards:

	Year Ended December 31,
	2021			2020
Unvested at beginning of year		54,703			70,266
Early exercised stock options during the period		—			23,540
Early exercised stock options repurchased during the period		—			(4,480	)
Vested during the period		(37,097	)		(34,623	)
Unvested at end of year		17,606			54,703

In February 2021, the Company’s board of directors approved the 2021 Employee Stock Purchase Plan, which became effective upon the pricing of the Company’s IPO on March 16, 2021. The ESPP permits participants to purchase common stock through payroll deductions of up to 20% of their eligible compensation. Initially, a total of 360,000 shares of common stock were reserved for issuance under the ESPP. In addition, the number of shares of common stock available for issuance under the ESPP will be annually increased on the first day of each fiscal year during the term of the ESPP, beginning with the 2022 fiscal year, by an amount equal to the lessor of: (i) 1% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year; or (ii) such other amount as the Company’s board of directors may determine. Stock compensation expense for the year ended December 31, 2021 related to the ESPP was $0.5 million. As of December 31, 2021, the Company has issued 26,150 shares under the ESPP. The Company had an outstanding liability of $0.1 million at December 31, 2021, which is included in accrued compensation on the consolidated balance sheet, for employee contributions to the ESPP for shares pending issuance at the end of the offering period. At December 31, 2021, 333,850 shares remain available for issuance under the ESPP.

The fair value of stock of the stock purchase right under the ESPP was determined using the Black-Scholes option pricing model with the following assumptions:

The following table summarizes the components of stock-based compensation expense recognized in the accompanying statements of operations (in thousands):

	Year Ended December 31,
	2021		2020
Research and development	$	1,755	$	144
General and administrative		8,943		595
Discontinued operations		—		101
Total stock-based compensation	$	10,698	$	840

The total unrecognized compensation cost related to unvested stock-based awards as of December 31, 2021 was $45.4 million and is expected to be recognized over a weighted average period of 3.6 years.

In August 2021, in connection with the passing of the Company’s former Chairman of the board of directors, the Company fully accelerated all of the former Chairman’s outstanding equity awards, which resulted in a charge of $4.6 million to stock-based compensation expense for the year ended December 31, 2021.

	December 31, 2021		December 31, 2020
Conversion of convertible preferred stock issued		—		16,086,426
Conversion of convertible preferred stock in future issuance (D-2)		—		9,400,705
Common stock options issued and outstanding		6,474,039		2,930,248
Warrants to purchase convertible preferred stock outstanding		—		11,250
Warrants to purchase common stock outstanding		14,884		—
Shares available for issuance under equity incentive plan		1,856,063		373,789
Shares available for issuance under the ESPP		333,850		—
Total		8,678,836		28,802,418