In July 2021, the Company adopted the 2021 Equity Incentive Plan (2021 Plan), which became effective in connection with the initial public offering (IPO). Under the 2021 Plan, 4,000,000 shares of the Company's common stock were initially reserved for issuance of equity awards to employees, directors, and consultants, under terms and provisions established by the Board of Directors. The number of shares of common stock available for issuance under the 2021 Plan automatically increases on the first day of January for a period of ten years, commencing on January 1, 2022, in an amount equal to the lesser of: 4,000,000 shares; 4% of the outstanding shares of the Company’s common stock as of the last day of the immediately preceding year; or such other amount as the Company’s Board of Directors may determine. In addition, the Company’s 2016 Equity Incentive Plan (2016 Plan) was terminated in connection with the IPO. Shares subject to awards granted under the 2016 Plan that are repurchased by or forfeited to the Company will be reserved for issuance under the 2021 Plan.

Total shares reserved and available for grant under the 2021 Plan as of June 30, 2022 are 2,762,859.

The following table summarizes stock option activity:


	Shares			Weighted- Average Exercise
				(in dollars)
Outstanding as of December 31, 2021		2,772,154		$	7.90
Options granted		2,448,802		$	13.25
Options exercised		(20,838	)	$	2.15
Options cancelled		(38,408	)	$	11.82
Outstanding as of June 30, 2022		5,161,710		$	10.43

Stock option awards granted to employees generally vest over a four-year period. The contractual term of stock option awards is generally 10 years from the grant date.

The fair value of the Company’s stock option awards is estimated on the date of grant using the Black-Scholes option pricing model using the following assumptions:


	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Expected term (in years)	5.5 – 6.1	5.0 – 6.1	5.5 – 6.1	5.0 – 6.1
Expected volatility	96% – 97%	103%	96% – 97%	100% – 103%
Risk-free interest rate	2.8% – 3.4%	0.8% – 1.0%	1.6% – 3.4%	0.6% – 1.0%
Expected dividend yield	—%	—%	—%	—%

The Company began granting restricted stock units (RSUs) in the first quarter of 2022. RSUs are awards that entitle the holder to receive freely tradable shares of the Company's common stock upon the completion of a specific period of continued service. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. RSUs are valued at the market price of the underlying common stock on the date of grant. The Company recognizes noncash compensation expense for the fair value of RSUs on a straight-line basis over the requisite service period of the awards. The following table summarizes activity of RSUs granted to employees with service-based vesting under the 2021 Plan.


	Shares			Weighted Average Grant Date Fair Value per Share
				(in dollars)
Unvested as of December 31, 2021		—		$	—
Granted		76,156		$	15.19
Vested		—		$	—
Forfeited		(3,597	)	$	15.19
Unvested as of June 30, 2022		72,559		$	15.19

In July 2021, the Company adopted the 2021 Employee Stock Purchase Plan (ESPP), which became effective in connection with the IPO. The Company initially reserved 800,000 shares for future issuance under the ESPP. The number of shares of common stock available for issuance under the ESPP automatically increases on the first day of each fiscal year beginning with 2022 in an amount equal to the lesser of: 800,000 shares; 1% of the outstanding shares of the Company’s common stock as of the last day of the immediately preceding year; or such other amount as the board of directors may determine. As of June 30, 2022, 1,161,305 shares were reserved for future issuance under the ESPP. Under Company's ESPP, employees are generally eligible to participate and can purchase shares on each purchase date established semi-annually through payroll deductions at the lower of 85% of the fair market value of the Company's stock at the commencement of the offering period or each purchase date of the offering period. Each offering period spans 6 months. The ESPP permits eligible employees to purchase common stock through payroll deductions for up to 15% of

qualified compensation, up to an annual limit of $25,000. The first offering period commenced in January 2022. For the six months ended June 30, 2022, the stock-based compensation expense for ESPP was not material.

The following table summarizes stock-based compensation recognized in the Company’s condensed statements of operations and comprehensive loss:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Research and development	$	1,437	$	174	$	2,433	$	328
General and administrative		1,575		328		2,673		606
Total stock-based compensation	$	3,012	$	502	$	5,106	$	934