The Company’s 2008 Stock Incentive Plan (the “2008 Plan”) provided for the Company to grant incentive stock options or nonqualified stock options, restricted stock, restricted stock units and other equity awards to employees, directors, consultants and advisors of the Company. The 2008 Plan was administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors. The board of directors could also delegate to one or more officers of the Company the power to grant awards to employees and certain officers of the Company. The exercise prices, vesting and other restrictions were determined at the discretion of the board of directors, or its committee if so delegated. Stock options granted under the 2008 Plan with service-based vesting conditions generally vest over four years and expire after ten years.

The total number of shares of common stock that were authorized for issuance under the 2008 Plan was 4,039,829 shares. Upon effectiveness of the Company’s 2018 Equity Incentive Plan, the (“2018 Plan”) in July 2018, the remaining 245,557 shares available under the 2008 Plan became available for issuance under the 2018 Plan and no future issuance will be made under the 2008 Plan. Additionally, outstanding options under the 2008 Plan that expired, terminated, are surrendered or canceled without having been fully exercised will be available for future awards under the 2018 Plan.

The exercise price for stock options granted is not less than the fair value of common shares as determined by the board of directors as of the date of grant. The Company’s board of directors valued the Company’s common stock, taking into consideration its most recently available valuation of common stock performed by third parties as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through the date of grant.

In June 2018, the Company’s stockholders approved the 2018 Plan, which became effective on July 18, 2018. The 2018 Plan provides for the grant of incentive stock options, non-qualified options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. The number of shares initially reserved for issuance under the 2018 Plan is 2,779,544 plus the 245,557 shares of common stock remaining available for issuance under the 2008 Plan as of that date. The number of shares reserved shall be annually increased on January 1, 2019 and each January 1 thereafter through January 1, 2028 by the least of (i) 2,216,368 shares, (ii) 4% of the number of shares of the Company’s common stock outstanding on the first day of the year or (iii) an amount determined by the Company’s board of directors. The shares of common stock underlying any awards that are expired, forfeited, canceled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, repurchased or are otherwise terminated by the Company under the 2018 Plan or the 2008 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan. As of December 31, 2018, 1,823,905 shares remained available for future issuance under the 2018 Plan. In January 2019, the shares under the 2018 Plan were increased by 1,032,125 shares pursuant to the annual increase described above.

In June 2018, the Company’s stockholders approved the 2018 Employee Stock Purchase Plan which became effective on July 18, 2018. A total of 272,504 shares of common stock were reserved for issuance under this plan. The number of shares reserved shall be annually increased on January 1, 2020 and each January 1 thereafter through January 1, 2028 by the least of (i) 545,008 shares, (ii) 1% of the number of shares of the Company’s common stock outstanding on the first day of the year or (iii) an amount determined by the Company’s board of directors.

The fair value of stock option grants is estimated using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a representative group of public companies in the biotechnology industry and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment, for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to nonemployees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the fair value of stock options granted to employees and directors:

	Year Ended December 31,
	2018			2017			2016
Risk-free interest rate		2.79	%		2.04	%		1.51	%
Expected volatility		81.06	%		79.82	%		75.34	%
Expected dividend yield		—			—			—
Expected term (in years)		6.05			6.00			6.35

The following table summarizes the Company’s option activity since December 31, 2017:

				Weighted		Weighted
				Average		Average		Aggregate
	Number			Exercise		Contractual		Intrinsic
	of Shares			Price		Term		Value
						(in years)		(in thousands)
Outstanding as of December 31, 2017		1,728,731		$	5.51		8.87	$	1,296
Granted		2,195,002			9.39
Exercised		(57,921	)		4.02
Forfeited		(86,409	)		6.76
Outstanding as of December 31, 2018		3,779,403		$	7.78		8.80	$	110
Vested and expected to vest as of December 31, 2018		3,779,403		$	7.78		8.80	$	110
Options exercisable as of December 31, 2018		977,825		$	6.14		7.78	$	110

Prior to July 2016, the Company’s stock option agreements allowed for the exercise of unvested stock option awards. The unvested shares are subject to repurchase by the Company if the employees cease to provide service to the Company, with or without cause. The table above reflects unvested stock options as exercised on the dates that the shares are no longer subject to repurchase. Payment for unvested shares is recorded as a long-term liability in the accompanying balance sheets. The liability for unvested common stock subject to repurchase is then reclassified into stockholders’ equity as the shares vest. As of December 31, 2018 and 2017, options for the purchase of 340 and 1,004 shares of common stock, respectively, had been exercised but were unvested and subject to repurchase. As December 31, 2018 and 2017, the long-term liability related to the payments for unvested shares was less than $0.1 million. For options granted after July 2016, the Company’s stock option agreements no longer allow for early exercise of the options.

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 strike 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, 2018 and 2017 was $0.2 million and less than $0.1 million, respectively.

The weighted average grant-date fair value of awards granted during each of the years ended December 31, 2018 and 2017 were $6.66 and $4.58 per share, respectively.

As of December 31, 2018, there were outstanding unvested service-based stock options held by nonemployees for the purchase of 48,114 shares of common stock.

The Company recorded stock-based compensation expense in the following expense categories of its statements of operations and comprehensive loss (in thousands):

	Year Ended December 31,
	2018		2017		2016
Research and development expenses	$	1,668	$	559	$	589
General and administrative expenses		2,284		592		259
Total	$	3,952	$	1,151	$	848

As of December 31, 2018, total unrecognized compensation cost related to the unvested stock-based awards was $15.8 million, which is expected to be recognized over a weighted average period of 3.11 years.