The Company adopted the 2017 Equity Incentive Plan (the “2017 Plan”) in February 2017 for the issuance of stock options and other stock-based awards to employees, consultants, officers and directors. As of December 31, 2021, there were no shares available for future issuance since all shares in the 2017 Plan ceased to be available upon the effective date of the 2021 Equity Incentive Plan, which occurred in March 2021. There were 698,601 shares of common stock available for future grants under the 2017 Plan as of December 31, 2020.

In March 2021, the Board adopted, and the stockholders approved, the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan became effective on the date of the underwriting agreement related to the IPO and no further grants will be made under the 2017 Plan.

The 2021 Plan provides for the grant of incentive stock options to employees, including employees of any parent or subsidiary of the Company, and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of awards to employees, directors and consultants, including employees and consultants of the Company’s affiliates.

Initially, the maximum number of shares of the Company’s common stock that may be issued under the 2021 Plan will not exceed 5,291,446 shares of common stock, which is the sum of (1) 4,700,000 new shares, plus (2) an additional number of shares equal to the number of shares of common stock subject to outstanding stock options or other stock awards granted under the 2017 Plan that, on or after the 2021 Plan became effective, terminate or expire prior to exercise or settlement; are not issued because the award is settled in cash; are forfeited because of the failure to vest; or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price, if any, as such shares become available from time to time. In addition, the number of shares of common stock reserved for issuance under our 2021 Plan will automatically increase on January 1 of each calendar year, starting on January 1, 2022 through January 1, 2031, in an amount equal to (i) 5.0% of the total number of shares of common stock outstanding on December 31 of the year before the date of each automatic increase, or (ii) a lesser number of shares determined by the Board prior to the applicable January 1. The maximum number of shares of common stock that may be issued on the exercise of incentive stock options under the 2021 Plan will be 14,100,000 shares. Shares subject to stock awards granted under the 2021 Plan that expire or terminate without being exercised in full or that are paid out in cash rather than in shares will not reduce the number of shares available for issuance under the 2021 Plan.

As of December 31, 2021, there were 3,264,770 shares of common stock issuable upon the exercise of outstanding options and there were 2,569,454 shares available for future issuance under the 2021 Plan.

In March 2021, the Board adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective on the date of the underwriting agreement related to the IPO. The 2021 ESPP is administered by the Board or by a committee appointed by the Board. The 2021 ESPP initially provides participating employees with the opportunity to purchase up to an aggregate of 500,000 shares of common stock. The first offering period of the plan commenced on December 1, 2021 under the 2021 ESPP.

Each offering to employees to purchase shares will begin on each June 1 and December 1 and will end on the following November 30 and May 31, respectively. On each purchase date, which will fall on the last date of each offering period, ESPP participants will purchase ordinary shares at a price per share equal to 85% of the lesser of (1) the fair market value of the shares on the offering date or (2) the fair market value of the shares on the purchase date. The occurrence and duration of offering periods under the ESPP are subject to the determinations of the Company’s compensation committee. As of December 31, 2021, no shares were issued under the 2021 ESPP in 2021 and 500,000 shares were available for future issuance.

The assumptions that the Company used in Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted for the years ended December 31, 2021 and 2020 were as follows:


	2021	2020
Risk-free interest rate	0.88%	0.46%
Expected term (in years)	5.1 - 6.3	5.5 - 6.1
Expected volatility	77.7% - 93.0%	74.6% - 76.6%
Expected dividend yield	0.0%	0.0%

The following table summarizes the activity of the Company’s stock options under the 2021 Plan for the year ended December 31, 2021:


	SHARES			WEIGHTED- AVERAGE EXERCISE PRICE		WEIGHTED- AVERAGE REMAINING CONTRACTUAL TERM (in years)		AGGREGATE INTRINSIC VALUE (in thousands)
Outstanding as of December 31, 2020		1,053,874		$	1.51		7.5	$	4,964
Granted		2,602,643			14.49
Exercised		(155,821	)		1.21
Cancelled or forfeited		(211,987	)		13.24
Expired		(23,939	)		12.18
Outstanding as of December 31, 2021		3,264,770		$	11.04		8.4	$	7,228
Options exercisable as of December 31, 2021		846,024		$	4.03		6.7	$	5,589
Options vested or expected to vest as of December 31, 2021		3,264,770		$	11.04		8.4	$	7,228

The options granted during the years ended December 31, 2021 and 2020 were granted to employees and consultants of the Company. As of December 31, 2021, there was approximately $19.9 million of unrecognized compensation expense related to the stock-based compensation arrangements granted under the 2021 Plan remaining to be recognized. The Company expects to recognize this cost over a weighted average period of 3.24 years.

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The intrinsic value of options exercised in 2021 and 2020 was $1.7 million and $0.4 million, respectively. The weighted-average grant date fair value of stock options granted in the years ended December 31, 2021 and 2020 under the Black-Scholes option pricing model was $9.87 per option and $0.87 per option, respectively.

The restricted stock was granted to the founders of the Company, as well as employees and consultants of the Company. There was approximately $8,000 of stock-based compensation expense recognized for the 547,360 shares of restricted stock vested during the year ended December 31, 2020. All restricted stock was vested as of December 31, 2020 and there is no remaining stock-compensation expense related to restricted stock to be recognized for the year ended December 31, 2021.

Total stock-based compensation expense recorded as research and development and general and administrative expenses, respectively, for employees, directors and non-employees during the years ended December 31, 2021 and 2020 is as follows (in thousands):

The stock-based compensation expense for the year ended December 31, 2020 includes the $2.8 million recorded in relation to the secondary sale of common stock (see Note 11).