SHARE-BASED COMPENSATION

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

The following table sets forth the amount of share-based compensation expense recognized by the Company by line item on its condensed consolidated statements of operations and comprehensive (loss) income for the three and six months ended June 30, 2021 and 2020 (in thousands):


	Three Months ended June 30,				Six Months ended June 30,
	2021		2020		2021		2020
Research and development	$	207	$	91	$	386	$	171
General and administrative	1,052		400		1,831		727
	$	1,259	$	491	$	2,217	$	898

2014 Stock Incentive Plan

The Company's 2014 Stock Incentive Plan, as amended ("2014 Plan"), was adopted by its board of directors in December 2013 and subsequently approved by its stockholders in January 2014. The 2014 Plan became effective immediately prior to the closing of the Company's IPO in February 2014 and provides for the grant of incentive and non-qualified stock options, restricted stock awards and restricted stock units, stock appreciation rights and other stock-based awards, with amounts and terms of grants determined by the Company's board of directors at the time of grant, to the Company's employees, officers, directors, consultants and advisors. Currently there are only stock options outstanding under the 2014 Plan, which generally vest over a four-year period at the rate of 25% of the grant vesting on the first anniversary of the date of grant and 6.25% of the grant vesting at the end of each successive three month period thereafter. Stock options granted under the 2014 Plan are exercisable for a period of ten years from the date of grant. There were approximately 12.4 million stock options outstanding under the 2014 Plan as of June 30, 2021.

At the Annual Meeting of the Company's stockholders in June 2019, the Company's stockholders approved an amendment to the 2014 Plan that (i) increased by 7.9 million the number of shares of common stock reserved for issuance under the 2014 Plan and (ii) eliminated the “evergreen” or automatic replenishment provision of the 2014 Plan, pursuant to which the number of shares of common stock authorized for issuance under the 2014 Plan was automatically increased on an annual basis. At the Annual Meeting of the Company’s stockholders in May 2021, the Company’s stockholders approved an amendment to the 2014 Plan that increased by 12 million the number of shares of common stock reserved for issuance under the 2014 Plan. There were approximately 12.3 million shares of common stock available for issuance under the 2014 Plan as of June 30, 2021.

2009 Stock Incentive Plan

The Company maintains a 2009 Stock Incentive Plan, as amended and restated ("2009 Plan"), which provided for the grant of incentive and non-qualified stock options and restricted stock awards and restricted stock units, with amounts and terms of grants determined by the Company's board of directors at the time of grant, to its employees, officers, directors, consultants and advisors. Upon the closing of its IPO in February 2014, the Company ceased granting awards under the 2009 Plan and all shares (i) available for issuance under the 2009 Plan at such time and (ii) subject to outstanding awards under the 2009 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased without having been fully exercised or resulting in any common stock being issued were carried over to the 2014 Plan. Stock options granted under the 2009 Plan are exercisable for a period of ten years from the date of grant. There were approximately 0.1 million fully vested stock options outstanding under the 2009 Plan as of June 30, 2021.

Out-of-Plan Inducement Grants

From time to time, the Company has granted equity awards to its newly hired employees, including executives, in accordance with the Nasdaq Stock Market LLC ("Nasdaq") employment inducement grant exemption (Nasdaq Listing Rule 5635(c)(4)). Such grants are made outside of the 2014 Plan and act as an inducement material to the employee's acceptance of employment with the Company. There were approximately 4.8 million stock options outstanding which were granted as employment inducement awards outside of the 2014 Plan as of June 30, 2021.

Stock Options

The following table sets forth a summary of the Company’s total stock option activity, including awards granted under the 2014 Plan and 2009 Plan and inducement grants made outside of stockholder approved plans, for the six months ended June 30, 2021:


	Number of Shares under Option (in thousands)	Weighted-average Exercise Price per Option	Weighted-average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2020	10,147	$1.26	8.5	$	3,160
Granted	7,233	$3.34
Exercised	(31)	$1.27
Canceled or forfeited	—	—
Outstanding at June 30, 2021	17,349	$2.13	8.6	$	43,999
Exercisable at June 30, 2021	5,719	$1.57	7.6	$	18,214

The Company recognized share-based compensation expense related to stock options of $1.3 million and $2.2 million for the three and six months ended June 30, 2021, respectively and $0.5 million and $0.9 million for the three and six months ended June 30, 2020, respectively. As of June 30, 2021, there was $17.1 million of total unrecognized compensation cost related to non-vested stock options which the Company expects to recognize over a weighted-average period of 3.3 years. The weighted-average grant-date fair value of stock options granted was $2.17 per option for the six months ended June 30, 2021.and $0.55 per option for the six months ended June 30, 2020. The total intrinsic value of stock options exercised during the six months ended June 30, 2021 was de minimis.

For the six months ended June 30, 2021 and 2020, the grant-date fair value of stock options was determined using the following weighted-average inputs and assumptions in the Black-Scholes option pricing model:


	June 30, 2021	June 30, 2020
Fair market value	$3.34	$0.87
Grant exercise price	$3.34	$0.87
Expected term (in years)	6.04	6.02
Risk-free interest rate	0.9	1.4
Expected volatility	74.7	71.3
Dividend yield	—%	—%