In 2015, the Company's Board of Directors adopted the 2015 Equity Incentive Plan, as amended in 2018, 2019 and 2020 (the “2015 Plan”), which provided for the grant of incentive stock options, nonqualified stock options or other awards including stock appreciation rights and restricted stock awards to the Company’s employees, officers, directors, advisors, and consultants. In May 2020, the Board of Directors adopted the 2020 Stock Option and Incentive Plan (the “2020 Plan”) and suspended the 2015 Plan. Awards outstanding under either the 2015 Plan or 2020 Plan that are cancelled, expire or otherwise terminated subsequent to May 2020 will become available for issuance as common stock under the 2020 Plan. Additionally, the 2020 Plan is subject to automatic increases on January 1 of each year beginning January 1, 2021. The number of shares added each January 1 will be equal to the lesser of: (i) 5% of the outstanding shares on the immediately preceding December 31 or (ii) such amount as determined by the administrator of the 2020 Plan, which is the compensation committee of the Board of Directors of the Company.

The 2020 Plan provides for the grant of incentive stock options, nonqualified stock options or other awards including stock appreciation rights, restricted stock awards and restricted stock units to the Company’s employees, officers, directors, advisors, and consultants. As of December 31, 2022, the 2020 Plan had 2,937,769 shares of common stock available for future issuance.

In 2022, the Board of Directors adopted the 2022 Inducement Plan ("Inducement Plan"), under which the Company may grant restricted stock units, stock options, stock appreciation rights, and restricted stock awards. As of December 31, 2022, 1,000,000 shares of common stock were available for issuance.

Options under the 2020 Plan may be granted for periods of up to 10 years and at prices no less than the market price of the Company’s common stock on the date of grant, provided, however, that the exercise price of an incentive stock option granted to a 10% shareholder shall not be less than 110% of the estimated fair value of the shares on the date of grant and the option is not exercisable after the expiration of five years from the date of grant.

The Company granted restricted stock awards under the 2015 Plan. The purchase price of the restricted common stock awards was the estimated fair value as determined by the Company's Board of Directors at the issuance date. The shares vest from one to four years and vesting could be accelerated upon a change in control. A holder of an award may pay a total purchase price or a part of the purchase price for granted shares at any time during the vesting periods. Upon termination of employment, the Company has the right to repurchase any unvested restricted shares. The repurchase price for unvested shares of common stock will be the lower of (i) the fair market value on the date of repurchase or (ii) their original purchase price. During the vesting term, holders of restricted stock awards are deemed to be common stock shareholders and have dividends and voting rights.

The Company accounted for restricted stock awards as early exercised options and recognized a liability in other liabilities when cash was received for the purchase of shares of restricted stock. As shares of restricted stock vested, the Company reclassified the liability to common stock and additional paid in capital. As of December 31, 2022 and 2021, the Company recorded a liability included in accrued expenses and other liabilities of nil and $2,000, respectively.

The aggregate fair value of restricted stock awards vested during the years ended December 31, 2022 and 2021 was $47,000 and $0.2 million, respectively. Total intrinsic value of outstanding unvested restricted stock awards as of December 31, 2022 and 2021 was nil and $0.3 million, respectively. As of December 31, 2022, there was no unrecognized compensation costs related to restricted stock awards.

Stock options issued under either the 2015 Plan or the 2020 Plan generally vest over four years and expire ten years from the date of grant. Certain options provide for accelerated vesting if there is a change in control, as defined in the respective plans.


	Year Ended December 31,
	2022			2021
Expected volatility	73.78%	-	80.64%	74.83%	-	76.31%
Risk-free interest rate	1.64 %	-	4.16 %	0.61 %	-	1.39 %
Expected dividend	—			—
Expected term (in years)	5.33	-	6.08	5.44	-	6.08
Underlying common stock fair value	4.92	-	24.23	15.20	-	38.23


	Number of Options	Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2021	3,620,180	$	14.56	8.25	$	16,735
Granted	2,517,884	$	11.65
Exercised	(140,443)	$	4.80
Forfeited	(428,054)	$	16.50
Outstanding as of December 31, 2022	5,569,567	$	13.34	7.96	$	43,696
Exercisable as of December 31, 2022	2,517,687	$	12.06	7.01	$	23,522

As of December 31, 2022, there was $27.7 million of unrecognized compensation costs that is expected to be recognized over the weighted-average periods of 2.6 years related to stock options. The total intrinsic value of time-based stock options exercised was $2.0 million and $6.9 million for December 31, 2022 and 2021, respectively. Intrinsic value represents the difference between the current fair value of the underlying stock and the exercise price of the stock option. The weighted-average grant date fair value of options granted during years ended December 31, 2022 and 2021 was $7.82 per share and $16.94 per share, respectively.

The service-based condition for restricted stock units ("RSUs") is generally satisfied over two years. The following table sets forth the outstanding RSUs and related activity for the year ended December 31, 2022:


	Restricted Stock Units	Weighted Average Grant Date Fair Value
Unvested balance as of December 31, 2021	—	—
Granted	525,825	17.43
Forfeited	(17,900)	17.30
Unvested balance as of December 31, 2022	507,925	17.43

Performance-based restricted stock units ("PSUs") vest upon the achievement of market and performance conditions. Market conditions include the Company's total shareholder return ("TSR") relative to the NASDAQ Biotechnology Index over the term of the award ending on June 30, 2024, and performance conditions consist of multiple clinical development milestones associated with bexotegrast. The performance vesting conditions generally must be satisfied within a two-year period and are forfeited if the vesting conditions are not met. Additionally, the number of shares of common stock issued upon vesting will range from 0% to 200% of the PSUs based on achievement of certain targets.

The fair value of PSUs with clinical development vesting conditions were determined to be equal to the fair market value of the Company's share price on the date of grant. The fair value of the TSR PSUs were derived from a Monte Carlo simulation model that used the following key assumptions:


Valuation date share price	$	17.57
Award term (years)	1.92
Volatility	70.62		%
Correlation coefficient	0.3508
Average peer group volatility	79.69		%
Average peer group correlation coefficient	0.4397
Risk free interest rate	2.84		%


	Performance Stock Units	Weighted Average Grant Date Fair Value
Unvested balance as of December 31, 2021	—	—
Granted*	354,532	29.15
Vested	—	—
Unvested balance as of December 31, 2022*	354,532	29.15
*PSUs granted and outstanding based on target level of achievement of 100%.


	Performance Stock Units	Weighted Average Grant Date Fair Value
Unvested balance as of December 31, 2021	—	—
Granted*	354,532	17.57
Vested	(177,266)	17.57
Unvested balance as of December 31, 2022*	177,266	17.57
*PSUs granted and outstanding based on target level of achievement of 100%.

In December 2022, the first milestone applicable to PSUs with clinical development vesting conditions was achieved, resulting in a $3.1 million cumulative catch-up of stock-based compensation expense for such PSUs. As of December 31, 2022 the Company considered the remaining clinical development performance conditions probable of achievement.

In June 2020, the Company adopted the Company's 2020 Employee Stock Purchase Plan (the "2020 ESPP"). The Company reserved 700,000 shares of common stock for future issuance under the plan. The 2020 ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1 of each calendar year, beginning January 1, 2021, by the least of (i) 1.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, (ii) 700,000 shares or (iii) such lesser amount as determined by the administrator of the 2020 ESPP, which is the compensation committee of the Board of Directors of the Company.

Under the 2020 ESPP, eligible employees may purchase shares of our common stock through payroll deductions that cannot exceed 15% of each employee’s salary. The 2020 ESPP provides for a six-month offering period. At the end of the purchase period, eligible employees are permitted to purchase shares of common stock at the lower of 85% of the fair market value at the beginning of the offering period or 85% of the fair market value at the end of the purchase period, subject to tax limitations on the total value of the purchase. The 2020 ESPP is considered a compensatory plan, and the Company recorded $0.4 million and $0.5 million in stock-based compensation expense for years ended December 31, 2022, and 2021, respectively. During the year ended December 31, 2022, 85,969 shares of common stock were issued under the 2020 ESPP. The Company used the Black-Scholes option pricing model to estimate stock-based compensation expense for the 2020 ESPP with the following assumptions:


	Year Ended December 31,
	2022		2021
Restricted stock awards	$	36	$	182
Stock options and ESPP	$	13,280	$	10,255
Restricted stock units	$	1,892	$	—
Performance-based restricted stock units	$	7,390	$	—
Total stock-based compensation expense	$	22,598	$	10,437
Research and development expenses	$	8,730	$	3,928
General and administrative expenses	13,867		6,509