On April 20, 2018, the Company adopted the 2018 Stock Plan (the 2018 Plan). The 2018 Plan, as amended, provided for the issuance of up to 2,902,738 shares of common stock to employees, officers, directors, consultants, and advisors in the form of nonqualified and incentive stock options, unvested stock awards, and other stock-based awards.

The 2021 Equity Incentive Plan (the 2021 Plan) was approved by the Company’s Board on April 22, 2021 and became effective immediately, although no awards were permitted to be granted under the 2021 Plan until July 15, 2021. The 2021 Plan replaced the 2018 Plan, however, awards outstanding under the 2018 Plan continue to be governed by their existing terms. In addition, shares of common stock subject to awards granted under the 2018 Plan that cease to be subject to such awards by forfeiture or otherwise after the termination of the 2018 Plan will be available for issuance under the 2021 Plan.

There were 3,278,048 shares of common stock initially reserved for issuance under the 2021 Plan and as of December 31, 2022, there were 1,539,040 shares of common stock available for issuance. The number of shares reserved for issuance under the 2021 Plan will be increased automatically on the first business day of each fiscal year, commencing in 2022 and ending in 2031. The aggregate number of common shares that may be issued under the 2021 Plan shall automatically increase by a number equal to the lesser of (a) 4% of the total number of shares of common stock actually issued and outstanding on the last day of the preceding fiscal year or (b) a number of shares common stock determined by the Company’s Board.

The 2021 Employee Stock Purchase Plan (the "2021 ESPP") was approved by the Company’s Board on April 22, 2021 and became effective immediately, although no awards were permitted to be granted under the 2021 Plan until July 15, 2021. A total of 254,390 shares of common stock were initially reserved for issuance under the 2021 ESPP. As of December 31, 2022, there were 146,380 shares issued and 347,085 shares of common stock available for issuance under the 2021 ESPP. The number of shares reserved for issuance will automatically be increased on the first business day of each fiscal year, commencing on January 1, 2022 and ending on January 1, 2041. The aggregate number of shares of common stock that may be issued under the 2021 ESPP shall automatically increase by a number equal to the least of (i) one percent (1%) of the total number of shares of common stock actually issued and outstanding on the last day of the preceding fiscal year, or (ii) a number of shares of common stock determined by the Company’s Board.

Stock-based compensation expense related to stock options and the stock purchase plan for the years ended December 31, 2022 and 2021 was classified in the consolidated statement of operations as follows (in thousands):


	Year Ended December 31,
	2022		2021
Research and development	$	1,626	$	878
General and administrative		2,925		1,638
Total stock-based compensation expense	$	4,551	$	2,516

The Company typically grants stock options at exercise prices deemed by the Board to be equal to the fair value of the common stock at the time of grant. In the periods prior to the IPO, the fair value of the common stock was determined by the Board at each measurement date based on a variety of different factors, including the results obtained from independent third-party appraisals, the Company’s financial position and historical financial performance, the status of development of the Company’s programs, the current climate in the marketplace, the illiquid nature of the common stock, the effect of the rights and preferences of the preferred stockholders, and the prospects of a liquidity event, among others. In the periods following the IPO, the fair value is determined based upon the quoted price of the Company’s common stock.

The fair value of stock option grants is estimated using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The weighted-average for each of the assumptions the Company used to determine the grant-date fair value of options granted were as follows:


	Year Ended December 31,
	2022			2021
Risk free interest rate		2.40	%		0.79	%
Expected term (in years)		6.24			6.05
Expected dividend yield		0	%		0	%
Expected volatility of underlying common stock		81	%		75	%

The following table summarizes the stock option activity:


	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Life (in Years)		Intrinsic Value (in thousands)
Outstanding January 1, 2022		3,019,476		$	6.55		8.61	$	2,120
Granted		2,593,585			3.94
Exercised		(55,107	)		2.42
Canceled		(327,417	)		5.72
Outstanding December 31, 2022		5,230,537		$	5.35		8.49	$	—
Options vested or expected to vest as of December 31, 2022		5,230,537		$	5.35		8.49	$	—
Stock options exercisable as of December 31, 2022		1,550,423		$	5.56		7.39	$	—

Other information related to the option activity for the years ended December 31, 2022 and 2021:


	Year Ended December 31,
	2022		2021
Weighted-average fair value of options granted	$	2.80	$	5.74
Intrinsic value of options exercised (in thousands)	$	62	$	1,174

As of December 31, 2022, the unrecognized compensation cost related to outstanding options was $13.0 million, which is expected to be recognized over a weighted-average period of 2.76 years.

The Company has granted restricted common stock with service based vesting conditions. Unvested shares of restricted common stock may not be sold or transferred by the holder, except for transfers for estate planning purposes in which the transferee agrees to remain bound by all restrictions set forth in the original common stock purchase agreement. They are legally issued and outstanding but only accounted for as outstanding when vested. These restrictions lapse over the four year vesting term of each award. The purchase price of each share of restricted common stock was $0.001 per share. There were 116,870 shares unvested as of January 1, 2022, all of which vested in 2022, leaving no unvested shares remaining at December 31, 2022.

The aggregate fair value of restricted stock awards that vested during the years ended December 31, 2022 and 2021 was nominal.