In 2019, the Company adopted the 2019 Equity Incentive Plan (the 2019 Plan). The 2019 Plan provides for the Company to grant qualified stock options, non-qualified stock options, and restricted stock awards to employees, non-employee directors and consultants of the Company under terms and provisions established by the Company's board of directors. Under the terms of the 2019 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to employees outside of the U.S. However, for any employee who is a 10% or greater stockholder, options are granted at an exercise price no less than 110% of the fair value of the Company’s common stock on the grant date. Option awards granted typically have 10-year terms measured from the option grant date. However, if any employee is a 10% or greater stockholder, the awards have 5-year terms measured from the option grant date. While no shares are available for future issuance under the 2019 Plan, it continues to govern outstanding equity awards granted thereunder.

The compensation committee of the Company's board of directors adopted and the Company's stockholders approved the 2021 Equity Incentive Plan (2021 Plan) and the 2021 Employee Stock Purchase Plan (the ESPP ), which became effective immediately prior to the effectiveness of the Company's IPO. The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The Company's employees, officers, directors and consultants are eligible to receive awards under the 2021 Plan. Under the terms of the 2021 Plan, options are granted at an exercise price no less than fair value of the Company’s common stock on the grant date, except in certain cases related to significant corporate transactions. Option awards granted typically have 10-year terms measured from the option grant date. As of June 30, 2022, the total number of shares authorized for issuance under the 2021 Plan was 3,887,174. In addition, the number of shares of common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year, beginning on January 1, 2022, and continuing through and including January 1, 2031, by 5% of the total number of shares of common stock outstanding on December 31 of the immediately preceding calendar year, or a lesser number of shares determined by the Company's board of directors prior to the applicable January 1st.

The ESPP allows employees, including executive officers, to contribute up to 15% of their earnings, subject to certain limitations, for the purchase of the Company's common stock at a price per share equal to the lower of (a) 85% of the fair market value of a share of common stock on the first day of the offering period, or (b) 85% of the fair market value of a share of common stock on the last day of the offering period. As of June 30, 2022, there were 521,555 shares of common stock reserved for future issuance under the ESPP plan. The number of shares of common stock reserved for issuance under the ESPP will automatically increase on January 1 of each calendar year, beginning on January 1, 2022 and continuing through and including January 1, 2031, by the lesser of (1) 1% of the total number of shares of the Company's common stock outstanding on December 31 of the preceding calendar year or (2) a number of shares determined by the Company's board of directors. Shares subject to purchase rights granted under the ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under the ESPP.

Awards with vesting conditions under both plans typically include either (i) vesting 25% on the first anniversary of the grant date with the remainder vesting monthly over the following three years or (ii) monthly vesting over four years.

In January 2022, the Company granted a total of 45,000 stock options with performance conditions that vest upon the Company’s initiation of a Phase 1 trial for the potential treatment of generalized anxiety disorder (GAD). The probability of achieving performance conditions is assessed each reporting period. As of June 30, 2022, this performance condition was assessed and deemed not probable, and the Company has recognized no stock-based compensation expense relating to these performance-based options.

The activity for stock options is as follows:


	Options Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contract Terms (in years)		Aggregate Intrinsic Values (in thousands)
Balance as of December 31, 2021		2,922,135		$	3.62		9.14	$	21,144
Options granted		1,665,782			7.83
Options cancelled and forfeited		(13,000	)		8.21
Options exercised		—			—				—
Balance as of June 30 2022		4,574,917		$	5.14		9.00	$	3,937
Vested and expected to vest, June 30, 2022(1)		4,529,917		$	5.11		8.99	$	3,937
Options exercisable as of June 30, 2022		1,226,406		$	2.74		8.58	$	1,890

(1) Excludes 45,000 stock options awards outstanding for the period ended June 30, 2022, subject to only performance conditions that have been assessed and deemed not probable.

The aggregate intrinsic value disclosed in the above table is based on the difference between the exercise price of the stock option and the estimated fair value of the Company’s common stock as of the respective period-end dates. The weighted-average grant date fair value of stock options granted during the six months ended June 30, 2022, was $5.32 per share.

The Black-Scholes option pricing model for employee and nonemployee stock options incorporates the following assumptions:

The Company has restricted stock awards with service conditions that vest 25% on the first anniversary of the grant date and monthly thereafter. The restricted stock awards are subject to repurchase by the Company at the original purchase price in the event that the award recipient’s employment or relationship is terminated prior to the shares vesting.

In 2018, the Company granted restricted stock awards with performance conditions that vested upon the Company’s initiation of a registrational clinical trial to study the efficacy of ETX-810. The probability of achieving performance conditions is assessed each reporting period. As of December 31, 2021, 21,750 of these awards were still outstanding, and the Company recognized no stock-based compensation expense relating to these awards, as the performance condition was assessed and deemed not probable. In January 2022, the Company’s board of directors approved a modification to the vesting terms of these awards, such that the awards will vest in full on October 24, 2022. The incremental stock-based compensation expense related to the modification of these awards is $0.2 million, which is being recognized prospectively from the modification date through the vesting date.

The activity for restricted stock awards is as follows:


	Number of Shares			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2021(1)		332,364		$	7.30
Granted		—			—
Vested		(92,084	)		8.03
Forfeited		—			—
Unvested at June 30, 2022		240,280		$	7.48

(1) Includes 21,750 restricted stock awards granted in 2018 and still outstanding for the period ended December 31, 2021, subject to only performance conditions.

The following table sets forth stock-based compensation for stock options, restricted stock awards, and performance awards included in the Company’s consolidated statements of operations and comprehensive loss (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development expense	$	628	$	251	$	1,175	$	329
General and administrative expense		1,144		799		2,138		1,018
Total stock-based compensation expense	$	1,772	$	1,050	$	3,313	$	1,347

As of June 30, 2022, there was $17.8 million of total unrecognized compensation cost related to unvested stock options and unvested restricted stock awards granted and $1.86 million of unrecognized compensation cost related to unvested restricted stock awards granted, which is expected to be recognized over a weighted average period of 2.97 years and 2.71 years, respectively.