During 2017, the Company issued 8,620,000 shares of common stock to founders at a price of $0.00001 per share and 2,088,074 shares of common stock to Biocon as partial consideration for the License Agreements (Note 7). The shares issued to Biocon were valued at $0.005 per share, resulting in $9,689 of research license expense.

On October 16, 2018, the Company completed an IPO, selling 4,670,000 shares of common stock at an offering price of $14.00 per share. The Company received net proceeds of approximately $58.7 million, after deducting underwriting discounts, commissions and offering-related transaction costs.

In connection with the closing of the IPO in October 2018, the Convertible Promissory notes automatically converted into an aggregate of 878,834 shares of the Company’s common stock and the Company issued 228,060 shares of common stock to Biocon pursuant to certain anti-dilution rights.

In November 2018, the Company sold an aggregate of 445,097 shares of common stock pursuant to the underwriters’ partial exercise of their option to purchase additional shares, resulting in additional net proceeds of approximately $5.8 million.

In November 2019, the Company entered into an Open Market Sales Agreement^SM with Jefferies LLC (Jefferies) under which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $8.45 million from time to time through Jefferies acting as its sales agent (ATM facility). In December 2019, the Company sold an aggregate of 18,250 shares of its common stock under the ATM facility resulting in net negative proceeds of $0.2 million, after deducting the facility’s costs. Subsequent to December 31, 2019, the Company sold an aggregate of 174,649 shares of its common stock under the ATM facility resulting in net proceeds of $0.8 million.

In October 2018, the Company adopted the 2018 Equity Incentive Plan (the 2018 Plan). The 2018 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards and other forms of stock awards.

Initially, the maximum number of shares of the Company’s common stock that may be issued under the 2018 Plan is 2,229,773 shares which consists of 333,119 shares of common stock reserved for issuance under the Company’s 2017 Equity Incentive Plan (2017 Plan) at the time the 2018 Plan was adopted, 1,040,000 new shares of common stock approved for issuance under the 2018 Plan and 856,654 shares underlying awards granted under the 2017 Plan that were outstanding as of the effective date of the 2018 Plan and which will be added to the 2018 Plan’s reserve if such awards expire or terminate for any reason prior to exercise or settlement, are forfeited because of the failure to meet a contingency or condition required to vest such shares or are reacquired, withheld or not issued to satisfy a tax withholding or to satisfy a purchase price or exercise price of a stock award. As of December 31, 2019, the number of shares reserved under the 2018 Plan was 813,473 shares. The number of shares of common stock reserved for issuance under the 2018 Plan will automatically increase on January 1 of each calendar year through January 1, 2028, in an amount equal to 5.0% of the total number of shares of the Company’s capital stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by the Company’s board of directors.

Options granted under the 2018 Plan are exercisable at various dates as determined upon grant and will expire no more than ten years from their date of grant. The exercise price of each option shall be determined by the Board of Directors based on the estimated fair value of the Company’s stock on the date of the option grant. The exercise price shall not be less than 100% of the fair market value of the Company’s common stock at the time the option is granted. Most option grants generally vest 25% on the first anniversary of the original vesting commencement date, with the balance vesting monthly over the remaining three years.

A summary of the Company’s stock option activity under its equity incentive plans are as follows:

	Shares Subject to Options			Weighted- Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Options Outstanding at December 31, 2018		420,483		$	3.75
Granted		1,502,000		$	6.12
Exercised		(17,847	)	$	3.87
Forfeitures and cancellations		(83,543	)	$	5.05
Options Outstanding at December 31, 2019		1,821,093		$	5.64		9.24	$	17
Options Exercisable at December 31, 2019		367,676		$	3.75		8.71	$	17

Aggregate intrinsic value represents the product of the number of options multiplied by the difference between the Company’s closing stock price per share on the last trading day of the fiscal period, which was $3.38 as of December 31, 2019, and the exercise price.

The weighted-average fair value per share of options granted for the years ended December 31, 2019 and 2018 were $4.65 and $5.79, respectively.

The following table summarizes certain information regarding stock options (in thousands):

	Year Ended December 31,		Year Ended December 31,
	2019		2018
Fair value of options vested during the period	$	1,439	$	46
Cash received from options exercised during the period	$	69	$	291
Intrinsic value of options exercised during the period	$	-	$	3,346

In October 2018, the Company adopted the 2018 Equity Stock Purchase Plan (ESPP) whereby eligible employees may elect to withhold up to 15% of their earnings to purchase shares of the Company’s common stock at a price per share equal to the lower of (i) 85% of the fair market value of a share of the Company’s common stock on the first date of an offering or (ii) 85% of the fair market value of a share of the Company’s common stock on the date of the purchase right (purchase right). Initially, 343,275 shares of the Company’s common stock were approved for issuance under the ESPP pursuant to purchase rights granted to the Company’s employees or to employees of any of the Company’s designated affiliates. The number of shares of the Company’s common stock reserved for issuance will automatically increase on January 1 of each calendar year through January 1, 2028, by the lesser of (1) 1.0% of the total number of shares of the Company’s common stock outstanding on the last day of the calendar month before the date of the automatic increase, and (2) 343,275 shares; provided that before the date of any such increase, the Company’s board of directors may determine that such increase will be less than the amount set forth in clauses (1) and (2).

As of December 31, 2019, the Company had issued 13,321 shares of common stock under the ESPP which were issued during the year ended December 31, 2019. The Company had 503,716 shares available for future issuance under the ESPP as of December 31, 2019.

All stock option grants under the 2017 Plan provide for exercise of the stock option prior to vesting. Shares of common stock issued upon exercise of unvested options are subject to repurchase by the Company at the respective original exercise price until vested. Consideration received for the exercise of unvested stock options is recorded as a liability and reclassified into equity as the related award vests.

As of December 31, 2019, 265,232 and 446,171 unvested shares issued under early exercise provisions were subject to repurchase by the Company, respectively. The balance sheet reflects an unvested stock liability of $0.2 million and $0.3 million as of December 31, 2019 and 2018, respectively. The short-term portion of the unvested stock liability totals $0.1 million and is classified as accrued expenses on the accompanying consolidated balance sheet. The long-term portion of the unvested stock liability totals $0.1 million and is classified as other non-current liabilities on the accompanying consolidated balance sheet.

Total non-cash stock-based compensation expense for all stock awards and purchase rights, net of forfeitures recognized as they occur, that was recognized in the consolidated statement of operations is as follows (in thousands):

	Year Ended December 31,		Year Ended December 31,
	2019		2018
Research and development	$	1,207	$	251
General and administrative		1,045		191
Total	$	2,252	$	442

The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee and nonemployee stock option grants were as follows:

	Year Ended December 31,	Year Ended December 31,
	2019	2018
Risk-free interest rate	2.23%	2.83%
Expected volatility	93.58%	88.29%
Expected term (in years)	5.77	5.91
Expected dividend yield	0%	0%

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

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 as provided by the SEC. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the options.

Expected dividend yield. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not intend to pay dividends.

Forfeitures. The Company reduces stock-based compensation expense for actual forfeitures during the period.

Unrecognized compensation expense for stock options at December 31, 2019 was $8.6 million which is expected to be recognized over a weighted-average period of 3.26 years.

Common stock reserved for future issuance consists of the following as of December 31, 2019 and 2018:

	December 31,		December 31,
	2019		2018
Stock options issued and outstanding		1,821,093		420,483
Warrants for common stock		80,428		-
Awards available under the 2018 Equity Incentive Plan		813,473		1,363,119
Employee stock purchase plan		503,716		343,275
Total		3,218,710		2,126,877