Under the Company's 2021 Equity Incentive Plan (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 board of directors may determine.

Total shares reserved and available for grant under the 2021 Plan as of December 31, 2023 are 965,665.

The following table summarizes stock option activity:


	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
				(in dollars)		(Years)		(In thousands)
Outstanding as of December 31, 2022		5,210,182		$	10.01
Granted		3,311,758		$	3.36
Exercised		(10,875	)	$	2.71
Cancelled		(167,631	)	$	5.85
Outstanding as of December 31, 2023		8,343,434		$	7.47		8.12	$	2,380
Exercisable as of December 31, 2023		3,821,798		$	7.81		7.43	$	1,700

The aggregate intrinsic value is the value of the Company’s closing stock price on the last trading day of the year in excess of the weighted-average exercise price multiplied by the number of options outstanding or exercisable. The total intrinsic value of options exercised during the years ended December 31, 2023 and 2022, was $36.7 thousand and $0.2 million.

The weighted-average grant-date fair value of options granted during the years ended December 31, 2023 and 2022 was $2.62 and $9.80 per share.

As of December 31, 2023, there was $25.0 million of unrecognized stock-based compensation cost related to stock options, which is expected to be recognized over an estimated weighted-average period of 2.5 years.

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:

The assumptions used to determine the fair value of options granted were as follows. Each of these inputs is subjective, involve inherent uncertainties, and generally requires significant judgment. The assumptions used to determine the fair value of the awards represent management’s best estimates.


	Year Ended December 31,
	2023	2022
Expected term (in years)	5.5 – 6.1	5.5 – 6.1
Expected volatility	93% – 95%	95% – 97%
Risk-free interest rate	3.4% – 4.5%	1.6% – 4.2%
Expected dividend yield	—%	—%

Expected Term— The Company determines the expected term, which represents the period that stock-based awards are expected to be outstanding, in accordance with the simplified method due to its limited operating history, which is presumed to be the mid-point between the contractual term and the vesting period.

Expected Volatility— As there is limited trading history for the Company’s common stock, the Company determines its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and life science industry focus. The historical volatility is calculated based on a period of time commensurate with the expected term assumption.

Risk-Free Interest Rate— The Company bases the risk-free interest rate on U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term assumption.

Expected Dividend Yield— The expected dividend yield is assumed to be zero as the Company has never paid and has no plans to pay any dividends on its common stock.

Restricted stock units (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		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
				(in dollars)		(Years)		(In thousands)
Unvested as of December 31, 2022		459,192		$	4.07
Granted		911,813		$	3.06
Vested		(254,172	)	$	3.61
Forfeited		(28,557	)	$	3.70
Unvested as of December 31, 2023		1,088,276		$	3.34		1.19	$	3,526

As of December 31, 2023, there was $3.0 million of unrecognized stock-based compensation cost related to RSUs, which is expected to be recognized over an estimated weighted-average period of 2.3 years.

Under the Company's 2021 Employee Stock Purchase Plan (ESPP), the Company initially reserved 800,000 shares for future issuance. 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 December 31, 2023, 1,405,394 shares were reserved for future issuance under the ESPP. Under the 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 per the Internal Revenue Service. The first offering period commenced in January 2022. For the years ended December 30, 2023 and 2022, the stock-based compensation expense for ESPP was not material.

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


	Year Ended December 31,
	2023		2022

Research and development	$	7,039	$	4,914
General and administrative		8,270		6,553
Total stock-based compensation	$	15,309	$	11,467