10. Equity-Based Compensation

Equity Plans

As of December 31, 2019, the Company has three active equity plans, the 2018 Stock Option and Incentive Plan (the “2018 Plan”), the 2017 Stock Option and Incentive Plan (the “2017 Plan”), and the 2018 Employee Stock Purchase Plan (the “2018 ESPP”).

2018 Stock Option and Incentive Plan

The 2018 Plan was adopted by the Company’s Board of Directors on May 2, 2018, and approved by the Company’s stockholders on May 11, 2018. The 2018 Plan has replaced the 2017 Plan as no additional awards will be granted under that plan following the consummation of the IPO. The Company initially reserved 3,139,274 shares of common stock for the issuance of awards under the 2018 Plan (the “Initial Limit”), which included 352,204 unused shares reserved for issuance under the 2017 Plan that became available under the 2018 Plan upon the completion of the IPO.

The 2018 Plan provides for the grant of equity-based incentive awards, including incentive stock options, non‑qualified stock options, restricted stock awards, unrestricted stock awards and restricted stock units to the Company’s officers, employees, directors and other key persons (including consultants). Stock options granted under the 2018 Plan to employees generally vest over four years. The shares of common stock underlying any awards that are forfeited, cancelled, repurchased or are otherwise terminated by the Company under the 2018 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan.

The 2018 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2019, by 4% of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Board of Directors or compensation committee (the “Annual Increase”). These limits are subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization.

2017 Stock Option and Incentive Plan

The 2017 Plan provides for the grant of incentive stock options, non‑qualified stock options, restricted stock awards, unrestricted stock awards and restricted stock units. Stock options granted under the 2017 Plan to employees generally vest over four years. The number of shares initially reserved for issuance under the 2017 Plan was 3,455,330 shares of common stock. The shares of common stock underlying any awards that are forfeited, cancelled, repurchased or are otherwise terminated by the Company under the 2017 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan.

2018 Employee Stock Purchase Plan

On May 2, 2018, the Board of Directors adopted the 2018 ESPP, and it was approved by the stockholders on May 11, 2018. The 2018 ESPP initially reserved and authorized the issuance of 235,743 shares of common stock to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2019, by the lesser of (i) 353,614 shares of common stock, (ii) 1% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31 or (iii) such lesser number of shares as determined by the 2018 ESPP administrator. The number of shares reserved under the 2018 ESPP is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of December 31, 2019, no shares have been issued under the 2018 ESPP.

Total Equity‑Based Compensation Expense

The Company recorded equity‑based compensation expense related to all equity‑based awards for employees and non‑employees, which was allocated as follows in the consolidated statements of operations and comprehensive loss (in thousands):


	Year Ended
	December 31,
	2019		2018
Research and development expense	$	2,425	$	1,661
General and administrative expense		5,547		3,550
	$	7,972	$	5,211

Equity-based compensation during the year ended December 31, 2019 includes $0.6 million and $0.1 million related to the acceleration and modification, respectively, of certain equity awards. Equity-based compensation during the year ended December 31, 2018 includes $1.2 million related to the modification of certain other equity awards.

Restricted Stock

The following table summarizes restricted common stock activity as of December 31, 2019:


		Weighted
		Average Fair
		Value per Share
	Number of Shares	at Issuance
Restricted common stock as of December 31, 2018	664,174	$	5.77
Granted	—	$	—
Vested	(357,604)	$	5.77
Forfeited	(4,210)	$	5.77
Restricted common stock as of December 31, 2019	302,360	$	5.77

As of December 31, 2019, the Company had unrecognized equity-based compensation expense of $1.3 million related to restricted stock issued to employees and directors, which is expected to be recognized over a period of 1.2 years.

Stock Options

The following table summarizes the Company’s stock option activity as of December 31, 2019:


				Weighted
		Weighted		Average
	Number of	Average		Remaining	Aggregate
	Shares	Exercise Price		Contractual Term	Intrinsic Value
				(in years)	(in thousands)
Outstanding as of December 31, 2018	1,627,947	$	10.86	9.26	$	19,831
Granted	1,034,825	$	15.07
Exercised	(129,431)	$	7.06
Cancelled	(131,959)	$	15.46
Outstanding as of December 31, 2019	2,401,382	$	12.63	8.36	$	6,523
Options exercisable as of December 31, 2019	787,537	$	11.17	7.40	$	2,902

Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the year ended December 31, 2019 was $10.53.

The following assumptions were used in determining the fair value of options granted in the year ended December 31, 2019:


Risk-free interest rate	2.31	%
Expected dividend yield	0.0	%
Expected term (years to liquidity)	6.20
Expected volatility	79.50	%

As of December 31, 2019, the Company has unrecognized equity-based compensation expense related to its employee stock options of $13.8 million which the Company expects to recognize over the remaining weighted-average vesting period of 2.6 years.