Prior to our IPO, we issued warrants to certain employees, board members and advisors (Pre-IPO Plan). Each vested warrant entitled the warrant holder to a single class A ordinary share. Holders of stock warrants were entitled to exercise the vested portion of the stock warrant. Stock warrants generally vest over a three-year period and expire five years from the vest date.

In November 2021, our Board adopted, and our stockholders approved, the 2021 Equity Incentive Plan (2021 Equity Plan), which became effective on November 4, 2021. The 2021 Equity Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, awards of restricted stock, restricted stock units and other stock-based awards. The number of shares of our common stock reserved for issuance under the 2021 Equity Plan is equal to 2,465,150, subject to an annual increase, to be added 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 ending December 31, 2031, equal to the lesser of (1) 4% of the number of shares of common stock outstanding on the first day of such fiscal year or (2) such other amount determined by our Board. The 2,396,413 outstanding warrants granted under the Pre-IPO Plan were transferred to the 2021 Equity Plan and no further warrants were available to be issued under the Pre-IPO Plan. As of December 31, 2022, we had 1,389,248 options available for future grant under the 2021 Equity Plan.

The following table summarizes our stock options activity for the years ended December 31, 2022 and 2021:


	Number of Options and Warrants			Weighted- average exercise price per share		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value (in thousands)
Outstanding December 31, 2020		89,935		$	15.00		4.6	$	—
Granted		2,981,678		$	14.58		—	$	—
Outstanding December 31, 2021		3,071,613		$	13.12		8.5	$	—
Granted		1,211,155		$	5.34		—	$	—
Cancelled or forfeited		(362,596	)	$	12.51		—	$	—
Outstanding, December 31, 2022		3,920,172		$	10.77		8.1	$	—
Exercisable at December 31, 2022		993,841		$	13.04		7.3	$	—

In November 2021, our board of directors adopted and our stockholders approved the 2021 Employee Stock Purchase Plan (2021 ESPP), which became effective on November 4, 2021. The number of shares of our common stock reserved for issuance under the 2021 ESPP is equal to 257,272, subject to an annual increase, to be added on the first day of each fiscal year, beginning January 1, 2023, equal to the lesser of (1) 1% of the number of shares of common stock outstanding on the first day of such fiscal year; (2) 257,272 shares of our common stock; or (3) such other amount determined by our board of directors. As of December 31, 2022, the Board had not yet approved any offering under the 2021 ESPP.

In October 2021, our Board approved the amendment of all nonvested warrant awards issued in July and August 2021 with an exercise price of $19.62 per share to reduce the exercise price of such warrants to $12.64 per share. Warrants to purchase an aggregate of 670,849 shares of our Class A ordinary shares were modified. The vesting schedule of such awards was not modified. The modification resulted in a $0.6 million charge which will be recognized over the remaining vesting periods of each award averaging 3.75 years.

All share-based awards granted are measured based on the fair value on the date of the grant and compensation expense is recognized with respect to those awards over the requisite service period, which is generally the vesting period of the respective award. Forfeitures related to equity-based compensation awards are recognized as they occur, and we reverse any previously recognized compensation cost associated with forfeited awards in the period the forfeiture occurs.

For the years ended December 31, 2022 and 2021, we recorded equity-based compensation expense of $7.0 million and $1.8 million, respectively, related to the issuance of stock options and warrants. As of December 31, 2022, there was $17.5 million of unrecognized compensation cost related to unvested stock-based compensation arrangements that is expected to be recognized over a weighted average period of 2.8 years.

The fair values of the options granted were estimated based on the Black-Scholes model, using the following assumptions:


	Year Ended December 31,
	2022	2021
Expected volatility	74.0% - 77.3%	72.9% - 82.6%
Risk-free interest rate	1.62% - 4.2%	0.79% - 1.45%
Expected term (in years)	5.5 - 6.0	5.5 - 9.0
Expected dividend yield	0%	0%

Equity-based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands):


	December 31,
	2022		2021
Research and development	$	2,859	$	600
General and administrative		4,181		1,191
Total equity-based compensation	$	7,040	$	1,791