In January 2021, the Company’s board of directors adopted the 2021 Equity Incentive Plan (the “2021 Plan”) and the Company’s stockholders approved the 2021 Plan. The 2021 Plan authorized issuance of up to 8,075,000 shares of common stock and stock awards granted under the 2021 Plan vest at the rate specified in the stock option agreement and shall have terms no more than ten years from the date of grant. The terms and conditions governing the stock awards under the 2021 Plan are at the sole discretion of the board of directors. In addition, the number of shares of common stock reserved for issuance under the 2021 Plan will automatically increase on the first day of January 1 of each calendar year that commences after the 2021 Plan becomes effective and continuing through and including January 1, 2031, in an amount equal to 5% of the total number of shares of the Company’s common stock outstanding on December 31, or a lesser number of shares determined by the Company's board of directors or compensation committee. As a result, common stock reserved for issuance under the 2021 Plan was increased by 1,869,984 shares on January 1, 2022.

In addition, in January 2021, the Company’s board of directors and stockholders adopted the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP authorized issuance of up to 420,000 shares of common stock and permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation. Employees purchase shares of common stock at a price per share equal to 85% of the lower of the fair market value at the start or end of the six-month purchase periods within the two-year offering period. In addition, the number of shares of common stock reserved for issuance under the ESPP will automatically increase on January 1 of each calendar year that commences after the ESPP becomes effective and continuing through and including January 1, 2031, by the lesser of (1) 1% of the total number of shares of the Company's common stock outstanding on December 31 of the preceding calendar year, (2) 840,000 shares, and (3) a number of shares determined by the Company's board of directors. As a result, common stock reserved for issuance under the ESPP was increased by 373,996 shares on January 1, 2022. During the year ended December 31, 2022, 258,488 shares were issued under the ESPP and 85,425 shares were issued under the ESPP during the same period in 2021.

In September 2020, the compensation committee of the Company’s board of directors granted 526,018 options to employees that would commence vesting upon the closing of the Series C-2 financing and generally vest monthly over 48 months (the “Performance Awards”). The Company recognizes expense based on the fair value of the Performance Awards over the estimated service period (under the graded vesting method) to the extent the achievement of the related performance criteria is estimated to be probable. The Company determined that the financing milestone was achieved during January 2021. Accordingly, the Company recognized stock-based compensation expenses related to the Performance Awards of approximately $0.3 million and $0.8 million for the years ended December 31, 2022 and 2021, respectively. The weighted-average grant date fair value of the Performance Awards was $3.24 per share.

The following table summarizes the stock option activity during the year ended December 31, 2022:


	Options Outstanding			Weighted-average Exercise Price		Weighted-average Remaining Contractual Term (in years)		Weighted-average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2021		5,623,116		$	7.72		8.3			$	6,075
Granted		3,291,330		$	2.54			$	1.86
Exercised		(56,897	)	$	2.37
Canceled/forfeited		(1,631,914	)	$	7.07
Outstanding at December 31, 2022		7,225,635		$	5.55		8.0			$	—
Exercisable at December 31, 2022		3,340,108		$	5.68		7.2			$	—
Vested or expected to vest at December 31, 2022		7,225,635		$	5.55		8.0			$	—

The intrinsic value of options exercised was $45,000 and $2.7 million during the year ended December 31, 2022 and 2021, respectively. The fair value of options vested was $7.9 million and $6.2 million during the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, there was approximately $14.6 million of unrecognized stock-based compensation related to unvested stock options, which the Company expects to recognize over a weighted-average period of 2.1 years.

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:


	Years Ended December 31,
	2022				2021
Expected volatility		88-93		%	89-95		%
Risk-free interest rate		1.7-4.3		%	0.6-1.4		%
Expected option life (in years)		5.0-6.1			5.8-6.1
Expected dividend yield			0.0	%		0.0	%
Fair value per share of common stock		$0.98-$2.75			$3.04-$22.07

Expected Term–The expected term of options granted represents the period of time that the options are expected to be outstanding. Due to the lack of historical exercise history, the expected term of the Company’s employee stock options has been determined utilizing the simplified method for awards that qualify as plain-vanilla options, which use the midpoint between the vesting date and the expiration date of each option.

Expected Volatility–The estimated volatility was based on the historical volatility of the common stock of a group of publicly traded companies deemed comparable to the Company.

Risk-Free Interest Rate–The risk-free interest rate is the implied yield in effect at the time of the option grant based on U.S. Treasury securities with contract maturities equal to the expected term of the Company’s stock options.

Dividend Rate–The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used.

Fair Value of Common Stock–Prior to the Company's IPO in February 2021, the fair value of the Company’s common stock was determined by the Company’s board of directors with assistance from management and an independent third-party valuation firm using an approach consistent with the methods outlined in the American Institute of Certified Public Accountants' Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Determining the best estimated fair value of the Company’s common stock required significant judgment and management considered several factors, including the Company’s stage of development, equity market conditions affecting comparable public companies, significant milestones and progress of research and development efforts.

The following table summarizes the components of stock-based compensation expense recognized in the Company’s statement of operations and comprehensive loss (in thousands):


	Years Ended December 31,
	2022		2021
Research and development	$	4,109	$	4,460
General and administrative		5,467		4,040
Total	$	9,576	$	8,500

In December 2021, the Company issued 336,000 restricted stock units under the 2021 Plan at a grant date fair value of $4.51 per share. These restricted stock awards vest in equal quarterly installments over three years, subject to the employee's continued employment with, or services to, the Company on each vesting date. Each restricted stock award represents the right to receive one share of the Company's common stock when and if the applicable vesting conditions are satisfied.

The following table summarizes the activity of the restricted stock awards during the year ended December 31, 2022:


	RSU Outstanding			Weighted-average Grant Date Fair Value
Outstanding at December 31, 2021		336,000		$	4.51
Granted		—
Vested		(80,533	)	$	4.51
Canceled/forfeited		(133,600	)	$	4.51
Outstanding at December 31, 2022		121,867		$	4.51

As of December 31, 2022, total unrecognized stock-based compensation expense relating to unvested restricted stock awards was $0.5 million and the weighted-average remaining vesting period was 1.9 years.

The aggregate intrinsic value of restricted stock award is calculated as the closing price per share of the Company’s common stock on the last trading day of the fiscal period, multiplied by the number of restricted stock awards expected to vest as of December 31, 2022. As of December 31, 2022, the aggregate intrinsic value of restricted stock awards was $158,000.