In July 2018, the Company amended the Company’s Amended and Restated 2002 Stock Plan (the “2002 Plan”) to reserve an additional 800,000 shares of common stock for issuance under the 2002 Plan.

In October 2018, the Company’s board of directors and stockholders adopted and approved the 2018 Equity Incentive Plan (the “2018 Plan”), which is a successor to and continuation of the Company’s Amended and Restated 2002 Stock Plan (the “2002 Plan), which the Company’s board of directors and stockholders approved in July 2002. The 2018 Plan became effective upon the execution of the underwriting agreement related to the IPO on October 17, 2018. No further grants will be made under the 2002 Plan.

In 2002, the Company adopted the 2002 Stock Plan, which was later amended and restated, pursuant to which 37,830 shares were available for future grants as of September 30, 2018. The 2002 Plan provided for the grant of incentive stock options, nonstatutory stock options, stock awards, and stock purchase rights to employees, directors, and consultants. The terms of the grant agreements were determined by the Company’s board of directors. The Company’s stock options vest based on the terms in each grant agreement and generally vest over four years and have a term of 10 years.

In October 2018, the Company’s board of directors and stockholders adopted and approved the 2018 Equity Incentive Plan (the “2018 Plan”), which is a successor to and continuation of the 2002 Plan, which the Company’s board of directors and stockholders approved in July 2002. The 2018 Plan became effective upon the execution of the underwriting agreement related to the IPO on October 17, 2018. No further grants will be made under the 2002 Plan.

The following table summarizes stock option activity for the 2002 Plan for the nine months ended September 30, 2018:

				Weighted-		Weighted-
				Average		Average
				Exercise		Remaining		Aggregate
	Total			Price Per		Contractual		Intrinsic
	Options			Share		Term (in years)		Value
Outstanding at December 31, 2017		1,075,209		$	1.60		7.3	$	711,328
Granted		260,301		$	3.40
Exercised		(19,885	)	$	2.68
Outstanding at September 30, 2018		1,315,625		$	1.94		7.2	$	8,105,669
Vested and expected to vest at September 30, 2018		1,217,885		$	1.90		7.1	$	7,553,919
Vested and exercisable at September 30, 2018		807,177		$	1.60		6.2	$	5,243,664

The weighted-average grant date fair value per share of options granted was $2.30 for the nine months ended September 30, 2018. The aggregate intrinsic value of options exercised was $27,000 for the nine months ended September 30, 2018.

As of September 30, 2018, the total unrecognized compensation expense related to unvested employee and non-employee stock option awards was $0.6 million, which was expected to be recognized in expense over a weighted-average period of approximately 2.9 years.

The fair value of each grant of stock options was determined by the Company using the methods and assumptions discussed below. Certain of these inputs are subjective and generally require judgment to determine.

Expected Term—The expected term of stock options represents the weighted average period the stock options are expected to be outstanding. The Company uses the simplified method for estimating the expected term. The simplified method calculates the expected term as the average time-to-vesting and the contractual life of the options.

Expected Volatility—Due to the Company’s limited operating history and lack of company-specific historical or implied volatility, the expected volatility assumption was determined by examining the historical volatilities of a group of industry peers whose share prices are publicly available.

Risk-Free Interest Rate—The risk-free rate assumption is based on the U.S. Treasury instruments, the terms of which were consistent with the expected term of the Company’s stock options.

Expected Dividend—The Company has not paid and does not intend to pay dividends.

Common Stock Valuation—Due to the absence of a public market trading the Company’s common stock, it was necessary to estimate the fair value of the common stock underlying the stock-based grants when performing fair value calculations using the Black-Scholes option pricing model. The fair value of the common stock underlying the stock-based grants was assessed for each grant date by the board of directors. All options to purchase shares of common stock have been granted with an exercise price per share no less than the fair value per share of the common stock underlying those options on the date of grant.

In the absence of a public trading market for the Company’s common stock, the Company determined the estimated fair value of its common stock using methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants (“AICPA”) Audit and Accounting Practice Aid Series: Valuation of Privately Held Company Equity Securities Issued as Compensation (“AICPA Practice Aid”).

The fair value of each option was estimated on the date of grant using the weighted average assumptions in the table below:

	Nine Months Ended
	September 30,
	2018		2017
Risk-free interest rate	2.87%		2.28%
Expected term (in years)	7.0		7.1
Expected volatility	69%		68%
Expected dividend yield		—		—
Estimated fair value of common stock	$	2.32	$	1.00

Stock-based compensation expense has been reported in the Company’s statements of operations for the three months ended September 30, 2018 and 2017 and for the nine months ended September 30, 2018 and 2017 as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
General and administrative	$	66	$	10	$	119	$	30
Research and development		31		9		143		28
Total stock-based compensation	$	97	$	19	$	262	$	58