In October 2022, the Board adopted, and in November 2022 its stockholders approved, the 2022 Plan, which replaced the 2019 Plan and became effective immediately prior to and contingent upon the execution of the underwriting agreement related to the Company’s IPO. No further shares were issued under the 2019 Plan as of the effective date of the 2022 Plan. The 2022 Plan allows the Company to make equity-based and cash-based incentive awards to its officers, employees, directors, and consultants. The 2022 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”) and other stock-based awards. The number of shares initially reserved for issuance under the 2022 Plan was 5,606,723, which is the sum of: (i) 2,555,271 new shares, plus (ii) the number of shares that remained available for issuance under the 2019 Plan at the time the 2022 Plan became effective and (iii) up to 2,148,679 shares of common stock subject to awards granted under the 2019 Plan that, after the effective date of the 2022 Plan, expire or otherwise terminate without having been exercised in full or are forfeited to or repurchased. In addition, the number of shares reserved and available for issuance under the 2022 Plan shall automatically increase beginning on January 1, 2023 and each January 1 thereafter, by five percent of the aggregate number of shares of common stock of all classes issued and outstanding on the immediately preceding December 31 or such lesser number of shares of common stock as determined by the compensation committee.

The shares of common stock underlying any awards under the 2022 Plan and the 2019 Plan that are forfeited, canceled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of stock, expire, or are otherwise terminated (other than by exercise) will be added back to the shares of common stock available for issuance under the 2022 Plan.

As of September 30, 2023, there were 1,114,904 shares reserved for future issuance under the 2022 Plan.

In October 2022, the Board adopted, and in November 2022 its stockholders approved, the 2022 ESPP, which became effective immediately prior to and contingent upon the execution of the underwriting agreement related to the Company’s IPO. A total of 215,000 shares of common stock were initially reserved for issuance under this plan. The number of shares of common stock that may be issued under the 2022 ESPP shall cumulatively increase beginning on January 1, 2023 and each January 1 thereafter through January 1, 2032, by one percent 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 compensation committee.

No shares of the Company's common stock have been issued and no stock-based compensation expense has been recognized related to the 2022 ESPP. As of September 30, 2023, there were 434,204 shares reserved for future issuance under the 2022 ESPP.

In June 2023, the Board adopted the Inducement Plan to facilitate the granting of equity awards as an inducement material to new employees joining the Company. The Inducement Plan is administered by the compensation committee of the Board. The Board initially reserved 450,000 common shares of the Company for issuance under the Inducement Plan. The only persons eligible to receive awards under the Inducement Plan are individuals who are new employees and satisfy the standards for inducement grants under Nasdaq Listing Rule 5635(c)(4) or 5635(c)(3), as applicable. The terms of the Inducement Plan are identical to the terms of the 2022 Plan, except that no incentive stock options shall be awarded under the Inducement Plan.

As of September 30, 2023, there were 318,675 shares reserved for future issuance under the Inducement Plan.

The Company has granted stock options with service-based vesting conditions. Stock options typically vest over four years and have a maximum term of ten years. The Company typically grants stock options to employees and non-employees at exercise prices deemed by the Board to be equal to the fair value of the common stock at the time of grant.

The assumptions that the Company used in the Black-Scholes option-pricing model to determine the grant date fair value of stock options granted were as follows:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Risk-free interest rate range	3.96% - 4.62%	2.94%	3.40% - 4.62%	2.69% - 3.16%
Dividend yield	0.00%	0.00%	0.00%	0.00%
Expected life of options (years)	6.1	6.0 - 6.1	5.8-6.1	5.9 - 6.1
Volatility rate range	81.63% - 82.93%	82.49% - 82.54%	81.63% - 83.55%	71.06% - 82.54%
Fair value of common stock range	$8.95 - $12.37	$4.07	$8.95 - $20.50	$3.63 - $4.07

The following table summarizes the Company’s stock option activity:


	Number of Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2022		3,300,935		$	6.29		9.26	$	18,346
Granted		236,393		$	12.11
Exercised		(183,927	)	$	2.49
Forfeited or canceled		(156,436	)	$	5.53
Outstanding as of September 30, 2023		3,196,965		$	6.97		8.32	$	12,146
Vested and expected to vest as of September 30, 2023		3,196,965		$	6.97		8.32	$	12,146
Vested and exercisable as of September 30, 2023		1,028,513		$	2.85		7.01	$	7,005

Included in the table above are 98,494 options outstanding as of September 30, 2023 that were granted under the Inducement Plan.

The aggregate intrinsic value of 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 common stock as of the end of the reporting period. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2023 and 2022 was $1.9 million and $0.1 million, respectively.

The weighted-average grant date fair value of the Company’s stock options granted during the three months ended September 30, 2023 and 2022 was $7.35 and $2.93 per option, respectively. The weighted-average grant date fair value of the Company’s stock options granted during the nine months ended September 30, 2023 and 2022 was $8.80 and $2.59 per option, respectively. As of September 30, 2023, there was $11.6 million of unrecognized stock-based compensation expense related to stock option grants. The Company expects to recognize this amount over a weighted-average period of 2.8 years.

The total fair value of options vested during the three months ended September 30, 2023 and 2022 was $0.4 million and $0.1 million, respectively. The total fair value of options vested during the nine months ended September 30, 2023 and 2022 was $1.3 million and $0.4 million, respectively.

The Company has granted RSUs with service vesting based conditions. Unvested shares of restricted common stock may not be sold or transferred by the holder. They are legally issued and outstanding. These restrictions lapse according to the time-based vesting of each award.

A summary of the RSU activity during the nine months ended September 30, 2023 is as follows:


	Restricted Stock Units			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2022		1,787,152		$	12.49
Granted		561,973		$	11.22
Vested		(140	)	$	12.50
Forfeited		(10,853	)	$	12.54
Unvested at September 30, 2023		2,338,132		$	12.18

Included in the table above are 32,831 unvested RSUs as of September 30, 2023 that were granted under the Inducement Plan.

RSUs typically vest over four years. The weighted-average grant date fair value of the Company’s RSUs granted during the three and nine months ended September 30, 2023 was $11.03 and $11.22 per RSU, respectively. No RSUs were granted during the three or nine months ended September 30, 2022. As of September 30, 2023, there was $21.8 million of unrecognized stock-based compensation expense related to RSUs, which is expected to be recognized over a weighted-average period of 2.2 years.

The total fair value of RSUs vested during the three and nine months ended September 30, 2023 was de minimis. No RSUs vested in 2022.

Stock-based compensation expense included in the Company’s condensed consolidated statements of operations and comprehensive loss is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
General and administrative	$	2,566	$	110	$	6,661	$	206
Research and development		662		157		1,899		334
Total stock-based compensation expense	$	3,228	$	267	$	8,560	$	540