The Company granted options under its 2015 Equity Incentive Plan (the “2015 Plan”) until July 2020 when it was terminated as to future awards, although it continues to govern the terms of options that remain outstanding under the 2015 Plan. The 2015 Plan allows for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock unit awards and other stock awards. Awards can be made to officers, directors, employees, non-employee directors, and consultants of the Company. In connection with the Board of Directors’ and stockholders’ approval of the 2020 Plan, the 2015 Plan was terminated as to future awards and any options or awards outstanding under the 2015 Plan remain outstanding and effective. As of December 31, 2020, there were an aggregate of 2,211,562 shares of common stock issuable upon the exercise of outstanding options under the 2015 Plan.

The Company’s 2020 Performance Incentive Plan (the “2020 Plan”) which was adopted by the Company’s board of directors in June 2020 and approved by the Company’s stockholders in July 2020, became effective upon the consummation of the IPO. Upon the effectiveness of the 2020 Plan, no further grants may be made under the Company’s 2015 Plan. The Company’s 2020 Plan allows for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, stock bonuses, restricted stock, stock units and other forms of awards including cash awards to its officers, directors, employees, consultants and advisors.

As of December 31, 2020, a total of 2,660,371 shares of the Company’s common stock were authorized for issuance with respect to awards granted under the 2020 Plan. The share limit will automatically increase on the first trading day in January of each year (commencing in 2021) by an amount equal to the lesser of (1) 5% of the total number of outstanding shares of the Company’s common stock on the last trading day in December in the prior year, or (2) such lesser number as determined by the Company’s board of directors. Any shares subject to awards granted under the 2020 Plan or the 2015 Plan that are not paid, delivered or exercised before they expire or are canceled or terminated, or otherwise fail to vest, as well as shares used to pay the purchase or exercise price of such awards or related tax withholding obligations, will become available for new award grants under the 2020 Plan. A total of 1,542,532 options had been granted and 1,390,402 shares was available for issuance under the 2020 Plan for the year ended December 31, 2020.

The following table summarizes the stock option activity during the year ended December 31, 2020 (in thousands, except number of shares, exercise prices and contractual term):

	Number of shares			Weighted-average exercise price		Weighted-average remaining contractual term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2019		2,329,516		$	3.59		9.6	$	668
Granted		1,782,794			19.52
Exercised		(183,287	)		2.18
Forfeited		(288,308	)		9.40
Outstanding at December 31, 2020		3,640,715		$	11.00		9.0	$	183,742
Exercisable at December 31, 2020		654,195		$	5.34		8.6	$	36,717
Vested and expected to vest at December 31, 2020		3,640,715		$	11.00		9.0	$	183,742

The aggregate intrinsic value represents the difference between the exercise price of stock options and the quoted market price of the Company’s common stock for all in-the-money stock options.

Additional information related to the Company’s stock options is summarized below (in thousands, except per share amounts):

	Year Ended December 31,
	2020		2019
Weighted-average grant-date fair value of stock option grants per share	$	12.84	$	2.70

Intrinsic value of options exercised	$	1,444	$	104
Fair value of options vested	$	2,664	$	656

The Company’s 2020 Employee Stock Purchase Plan (the “ESPP”), which was adopted by the Company’s board of directors in June 2020 and approved by the Company’s stockholders in July 2020, became effective upon the consummation of the IPO. A total of 295,599 shares of the Company’s common stock is initially available for issuance under the ESPP. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The ESPP provides for six-month offering periods, and at the end of each offering period, employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last trading day of the offering period. As of December 31, 2020, no shares had been issued under the ESPP, and the full number of shares authorized under the ESPP Plan was available for issuance purposes upon the effectiveness of the ESPP.

Certain individuals were granted the ability to early exercise their stock options. The shares of common stock issued from the early exercise of unvested stock options are restricted and continue to vest in accordance with the original vesting schedule. The Company has the option to repurchase any unvested shares at the original purchase price upon any voluntary or involuntary termination. The shares purchased by the employees and non-employees pursuant to the early exercise of stock options are not deemed, for accounting purposes, to be outstanding until those shares vest. The cash received in exchange for exercised and unvested shares related to stock options granted is recorded as a liability for the early exercise of stock options on the accompanying balance sheets and will be transferred into common stock and additional paid-in capital as the shares vest. Shares subject to repurchase by the Company were 77,393 shares and 132,249 shares, with the related liability of $0.1 million and $0.1 million as of December 31, 2020 and 2019, respectively, recorded under other long-term liabilities in the balance sheets.

As of December 31, 2020, the Company had reserved the following shares of common stock for future issuance:

	December 31, 2020
Common stock options granted and outstanding		3,640,715
Reserved for future equity award grants		1,390,402
Reserved for future ESPP issuances		295,599
		5,326,716

Share-based compensation expense for the years ended December 31, 2020 and 2019 were as follows (in thousands):

	Year Ended December 31,
	2020		2019
Research and development	$	1,871	$	376
General and administrative		4,877		571
Total share-based compensation expense	$	6,748	$	947

The total unrecognized compensation cost related to unvested share-based awards was $22.2 million, which is expected to be recognized over a weighted-average remaining service period of 3.4 years as of December 31, 2020.

In October 2020, the Company recorded share-based compensation expense of $2.3 million related to the modification of certain stock option granted to its former Chief Financial Officer, Matthew Plunkett, under a Separation and Release Agreement that was executed on October 2, 2020 (the “Termination Date”). In addition, the Company recorded severance benefits expense of $0.3 million in October 2020 that is payable within the 6 months after the Termination Date.

In September and November of 2019, the Company granted options subject to both a service-based condition and a performance-based condition that require the achievement of a Series B Milestone Closing (Note 10) before the options can be eligible for service vesting conditions. The performance-based condition was achieved in the third quarter of fiscal year 2020.

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

	Year Ended December 31,
	2020	2019
Common stock fair value	$4.29 - $61.47	$3.40 - $4.77
Risk-free interest rate	0.4% - 0.5%	1.5% - 2.3%
Expected volatility	74.8% - 81.4%	80.2% - 81.9%
Expected term (in years)	5.5 - 6.1	5.6 - 6.1
Expected dividend yield	—	—

The Company recognizes compensation costs related to stock options granted to employees and nonemployees based on the estimated fair value of the awards on the date of grant, net of forfeitures. The Company generally recognizes grant-date fair value of stock options granted to employees and non-employee service providers on a straight-line basis over the requisite service period, which is generally the vesting term of the respective awards. The Company determines the fair value of stock options with a service and performance condition, or performance-based options, based on the fair value of the Company’s common stock on the date of grant. The Company accounts for the impact of forfeitures as they occur. For purposes of calculating share-based compensation, the Company estimates the fair value of stock options issued using a Black-Scholes option-pricing model. The determination of the fair value of share-based payment awards utilizing the Black-Scholes option-pricing model is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends.

Expected term. The Company opted to use the “simplified method” for estimating the expected term of employee options, whereby the expected term equals the average of the vesting term and the original contractual term of the option (generally 10 years).

Expected volatility. Due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company based its estimate of expected volatility on the historical volatilities of the common stock of comparable publicly traded biopharmaceutical companies over a period equal to the expected term of the stock option grants. The comparable companies were chosen based on their similar size, stage in the life cycle, and financial leverage to the Company.

Risk-free interest rate. The risk-free rate assumption is based on the U.S. Treasury instruments with maturities similar to the expected term of the stock options.

Expected dividend yield. The Company has not issued any dividends and do not expect to issue dividends over the life of the options, as a result the estimated dividend yield is zero.