Stock-based Compensation

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

2017 Stock Incentive Plan

In December 2017, the Company adopted the 2017 Stock Incentive Plan (the “2017 Plan”), as amended and restated, under which it could grant incentive stock options (“ISOs”), non-qualified stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights and other stock-based awards to eligible employees, officers, directors and consultants. The terms of stock options and RSAs, including vesting requirements, are determined by the board of directors, subject to the provisions of the 2017 Plan.

2021 Stock Incentive Plan

In April 2021, the board of directors adopted and the Company’s stockholders approved the 2021 Stock Incentive Plan (the “2021 Plan”), which became effective immediately prior to the effectiveness of the Company’s initial public offering (“IPO”). As a result of the adoption of the 2021 Plan, no further awards will be made under the 2017 Plan.

The 2021 Plan provides for the grant of ISOs, non-qualified stock options, RSAs, RSUs, stock appreciation rights and other stock-based awards. The Company’s employees, officers, directors, consultants and advisors are eligible to receive awards under the 2021 Plan. The terms of awards, including vesting requirements, are determined by the board of directors, subject to the provisions of the 2021 Plan.

The Company initially registered 3,352,725 shares of common stock under the 2021 Plan, pursuant to a Registration Statement on Form S-8 filed with the SEC on April 30, 2021, which was comprised of (i) 2,843,116 shares of common stock reserved for issuance under the 2021 Plan, (ii) 31,884 shares of common stock originally reserved for issuance under the 2017 Plan that became available for issuance under the 2021 Plan upon the completion of the IPO, and (iii) 477,725 shares of unvested restricted stock subject to repurchase by us that may become issuable under the 2021 Stock Incentive Plan following such repurchase. The 2021 Plan also provides that an additional number of shares will be added annually to the shares authorized for issuance under the 2021 Plan on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2022 and continuing until, and including, the fiscal year ended December 31, 2031. The number of shares added each year will be equal to the lesser of (i) 5% of the number of outstanding common stock on such date and (ii) such amount as determined by the board of directors. Effective January 1, 2022, 1,380,397 additional shares were automatically added to the shares reserved for issuance under the 2021 Plan pursuant to this evergreen provision.

As of March 31, 2022, there were 2,406,657 shares available for future issuance under the 2021 Plan.

2021 Employee Stock Purchase Plan

In April 2021, the board of directors adopted and the Company’s stockholders approved the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective immediately prior to the effectiveness of the IPO. The Company initially reserved 244,000 shares of common stock for future issuance under the 2021 ESPP. The 2021 ESPP provides that an additional number of shares will automatically be added to the shares reserved for issuance on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2022 and continuing for each fiscal year until, and including, the fiscal year ending on December 31, 2032. The number of shares added each year will be equal to the lowest of (i) 488,000 shares of common stock, (ii) 1% of the number of shares of outstanding common stock on such date, and (iii) such amount as determined by the board of directors. The company had not initiated any offering periods under the 2021 ESPP as of March 31, 2022, and no shares were added on January 1, 2022, pursuant to the evergreen provision.

Stock-Based Compensation Expense

Total stock-based compensation expense recognized in the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 was as follows (in thousands):


	Three Months Ended March 31,
	2022		2021
Research and development	$	781	$	140
General and administrative	964		399
Total stock-based compensation	$	1,745	$	539

Restricted Stock Activity

The Company may, at its discretion, repurchase unvested shares of restricted stock issued pursuant to the 2017 Plan at the initial purchase price if the employees or non-employees terminate their service relationship with the Company. The shares are recorded in stockholders’ equity as they vest.

The following table summarizes restricted stock award activity during the three months ended March 31, 2022 (in thousands, except per share amounts):


	Shares/Units	Weighted-Average Grant Date Fair Value Per Share
Unvested at December 31, 2021	295	$	1.35
Granted	—	$	—
Vested	(61)	$	1.33
Forfeited	—	$	—
Unvested at March 31, 2022	234	$	1.36

As of March 31, 2022, there was unrecognized stock-based compensation expense related to unvested restricted stock awards of $0.3 million, which the Company expects to recognize over a weighted-average period of approximately 1.1 years.

The aggregate fair value of restricted stock awards that vested during the three months ended March 31, 2022 and 2021, based upon the fair values of the stock underlying the restricted stock awards on the day of vesting, was $0.5 million and $0.3 million, respectively.

Stock Option Activity

The fair value of stock options granted during the three months ended March 31, 2022 and 2021 was calculated on the date of grant using the following weighted-average assumptions:


	Three Months Ended March 31,
	2022		2021
Risk-free interest rate	1.6	%	0.8	%
Expected term (in years)	6.0		6.0
Dividend yield	—	%	—	%
Expected volatility	76.0	%	79.8	%

Using the Black-Scholes option pricing model, the weighted-average grant date fair value of stock options granted during the three months ended March 31, 2022 and 2021 was $7.54 and $4.23 per share, respectively.

The following table summarizes stock option activity during the three months ended March 31, 2022 (in thousands, except per share amounts):


	Options Outstanding
	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)
Outstanding at December 31, 2021	3,266	$	8.24	9.02
Granted	928	$	11.34
Exercised	(46)	$	2.83
Cancelled	(15)	$	7.69
Outstanding at March 31, 2022	4,133	$	9.00	9.00
Exercisable at March 31, 2022	818	$	5.73	8.65

The aggregate intrinsic fair value of stock options exercised during the three months ended March 31, 2022 and 2021 was $0.3 million and $0.1 million, respectively.

As of March 31, 2022, there was unrecognized stock-based compensation expense related to unvested stock options of $20.0 million, which the Company expects to recognize over a weighted-average period of approximately 2.9 years.