The Company currently grants equity-based awards under its 2020 Incentive Award Plan (“2020 Plan”). The Company previously granted equity-based awards under its 2005 Equity Inventive Plan ("2005 Plan") and 2016 Equity Incentive Plan ("2016 Plan").

The 2020 Plan provides for grant of incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock, dividend equivalents, restricted stock units, performance awards and other share and cash-based awards to employees and consultants and members of the Board of Directors of the Company and its subsidiary.

The initial number of shares of the Company’s common stock that may be issued under the 2020 Plan is 2,100,000 shares plus the number of shares of the Company’s common stock underlying outstanding awards under the 2005 Plan and 2016 Plan as of the effective date of the 2020 Plan that expire, lapse or are terminated, exchanged for cash, surrendered, repurchased, canceled or forfeited following the effective date of the 2020 Plan. The number of shares available under the 2020 Plan will automatically increase on January 1st of each year from 2021 to 2030 by the lesser of (i) 4% of the number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) a smaller number of shares determined by the Company’s Board of Directors. However, no more than 8,800,000 shares may be issued under the 2020 Plan pursuant to the exercise of incentive stock options. On January 1, 2022, the shares available for grant under the 2020 Plan was automatically increased by 520,287. As of December 31, 2022, the Company had 1,319,569 shares available for issuance under the 2020 Plan. On January 1, 2023, the shares available for grant under the 2020 Plan was automatically increased by 1,273,106.

In February 2022, the Company’s Board of Directors adopted the Company’s 2022 Employment Inducement Award Plan (“Inducement Award Plan,” and together with the 2020 Plan, 2016 Plan and 2005 Plan, the “Plans”), which was adopted by the Board of Directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market LLC listing rules (“Rule 5635(c)(4)”), and allows for the granting of up to 2,413,002 shares of the Company's common stock. The Inducement Award Plan provides for the grant of non-qualified stock options, stock appreciation rights, performance units, restricted stock awards, restricted stock units and stock grants. In accordance with Rule 5635(c)(4), awards made under the Inducement Award Plan may only be made to a newly hired employee who has not previously been a member of the Board, or any employee who is being rehired following a bona fide period of non-employment by the Company or a subsidiary, as a material inducement to the employee’s entering into employment with the Company or its subsidiary. During 2022, the Company granted options to purchase 1,813,002 shares of common stock to certain executives. There were 600,000 shares remaining available for issuance as of December 31, 2022.

All stock option grants are nonqualified stock options except for option grants to employees granted, under the 2020 Plan, 2016 Plan or 2005 Plan intended to qualify as incentive stock options under the Internal Revenue Code of 1986, as amended. Stock options may not be granted under the 2020 Plan at less than the fair market value of the Company’s common stock on the date of grant. Vesting periods of awards are determined by the Board of Directors or its compensation committee. Vesting periods of awards granted to date range from vesting upon grant to vesting over a four-year period. Vesting conditions are generally based on continued service. Additionally, the Company has granted certain awards which vest upon the achievement of certain financing and revenue milestones. Stock options granted under the Plans expire no more than 10 years from the date of grant.

Stock-based compensation expense included in the Company’s consolidated statements of operations and comprehensive loss was as follows (in thousands):


	Year Ended December 31,
	2022		2021
Research and development	$	850	$	508
General and administrative		4,597		2,262
Total	$	5,447	$	2,770

The Company has granted options to purchase 31,429 shares of common stock that vest based on the achievement of performance-based criteria related to scientific milestones, for which the Company has not recorded any stock-based compensation associated with the achievement of the milestone as it was not deemed probable as of December 31, 2022 and 2021. As of December 31, 2022, there was approximately $36,000 of unrecognized stock-based compensation related to a stock option award related to the achievement of a commercial revenue-based milestone.

The Company has also granted options to purchase 1,648,002 shares of common stock that vest as to one-third of options, in each case, upon the achievement of three distinct market capitalization targets during the five-year performance period following the date of grant, provided that no more than one-third of the option may vest prior to the first anniversary of the date of grant, no more than two-thirds of the option may vest prior to the second anniversary of the date of grant and the option may not become fully vested prior to the third anniversary of the date of grant, subject to continued service on each applicable vesting date and certain exceptions in the context of a change in control transaction. The Company has accounted for these awards as market-based condition awards and therefore, stock-based compensation recorded during the year ended December 31, 2022 was $2.2 million.

The following table summarizes the Company’s unrecognized stock-based compensation as of December 31, 2022:


	Year Ended December 31,
	Unrecognized Expense (in thousands)		Period of Recognition (years)
Restricted stock units	$	105		3.2
Stock options		9,247		2.2
Total	$	9,352


	Year Ended December 31,
	2022			2021
Risk-free interest rate		2.7	%		0.7	%
Expected dividend yield		—	%		—	%
Expected term (in years)		6.0			6.0
Expected volatility		81.3	%		85.0	%

A summary of the stock option activity under the Plans for the year ended December 31, 2022 was as follows:


	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding December 31, 2021		1,662,861		$	10.34		7.6	$	918
Granted		2,828,474			5.19
Exercised		(2,718	)		2.76
Cancelled		(177,284	)		7.83
Outstanding at December 31, 2022		4,311,333		$	7.07		8.2	$	378
Exercisable at December 31, 2022		1,350,357		$	9.73		6.2	$	328
Vested and expected to vest at December 31, 2022		4,311,333		$	7.07		8.2	$	378

The weighted-average fair value of options granted to employees, directors and non-employees during the years ended December 31, 2022 and 2021 was $3.40 and $6.89, respectively.

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2022 and 2021 was approximately $5,000 and $0.3 million, respectively.

In April 2020, the Company’s Board of Directors adopted the Company’s 2020 Employee Stock Purchase Plan (“2020 ESPP”). The 2020 ESPP is structured as a qualified employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended, and is not subject to the provisions of the Employee Retirement Income Security Act of 1974. The Company initially reserved 150,000 shares of common stock for issuance under the 2020 ESPP. In addition, the number of shares available for issuance under the 2020 ESPP will be annually increased on January 1st of each year from 2021 to 2030 by the lesser of (i) 0.5% of the number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Company’s Board of Directors, provided that no more than 987,500 shares of common stock may be issued under the 2020 ESPP.

On January 1, 2022, the shares available for grant under the 2020 ESPP was automatically increased by 65,035. There was no increase to the shares available for grant under the 2020 ESPP plan as of January 1, 2023. The 2020 ESPP permits eligible participants to purchase common stock through payroll deductions of up to a specified percentage of their eligible compensation. The purchase price of the shares, in the absence of a contrary designation, will be 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the purchase date. As of December 31, 2022, no shares have been issued under the 2020 ESPP.