The Board of Directors, at its sole discretion, shall determine the exercise price. Stock options expire 7 to 10 years from the date of grant. The stock options generally vest 25% upon the one-year anniversary of the service inception date and then ratably each month over the remaining 36 months. Upon termination of service, any unvested stock options are automatically returned to Company. Vested stock options that are not exercised within the specified period, according to the terms and conditions of the option plan, following the termination as an employee, consultant, or service provider to the Company are surrendered back to the Company. Those stock options are added back to the pool and made available for future grants.

The Company’s 2019 Stock Option and Grant Plan (the “2019 Plan”) provided for the Company to grant stock options and other stock-based awards to employees and non-employees to purchase the Company’s common stock. On March 24, 2020, the Board of Directors approved an increase to the total authorized options under the 2019 Stock Option and Grant Plan to 3,464,316. Upon the effectiveness of the 2020 Plan (as defined below), no further issuances will be made under the 2019 Plan.

On July 15, 2020, the Company’s Board of Directors approved an amendment for stock options outstanding under the 2019 Stock Option and Grant Plan to provide for immediate 100% vesting for all outstanding options under the plan upon the consummation of a Sale Event, as defined by the amendment.

The 2020 Stock Option and Incentive Plan (the “2020 Plan”) became effective on July 22, 2020, the date immediately prior to the date on which the registration statement for the Company’s IPO became effective. The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards, cash-based awards and dividend equivalent rights to the Company’s officers, employees, directors and consultants. The number of shares of common stock initially reserved for issuance under the 2020 Plan is 3,809,818 which shall be cumulatively increased on January 1, 2021 and each January 1 thereafter by 5% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s compensation committee of the board of directors. The 2020 Plan replaced the 2019 Plan, as the Company’s board of directors is not expected to make additional awards under the 2019 Plan following the completion of the IPO. However, the 2019 Plan will continue to govern outstanding equity awards granted thereunder.

The 2020 Employee Stock Purchase Plan (the “2020 ESPP”) was approved by the Company’s board of directors on July 15, 2020, and the Company’s stockholders on July 20, 2020, and became effective on July 22, 2020, the date immediately prior to the date on which the registration statement for the Company’s IPO was declared effective. The ESPP initially reserved and authorized the issuance of up to a total 317,484 shares of common stock to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1, 2021 and each January 1 thereafter by the lesser of 634,969 shares of common stock, 1% of the outstanding number of shares of common stock on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s compensation committee. As of December 31, 2020, no shares had been issued under the 2020 ESPP.

The following table summarizes stock option activity for the year ended December 31, 2020:

	Stock Options
	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (In thousands)
Outstanding as of December 31, 2019		1,387,003		$	4.62		4.8
Granted		3,504,715			10.43
Forfeited		(102,863	)		7.18
Exercised		(236,459	)		2.77
Outstanding as of December 31, 2020		4,552,396		$	9.13		8.2	$	112,412
Vested and expected to vest as of December 31, 2020		4,552,396		$	9.13		8.2	$	112,412
Exercisable at December 31, 2020		861,388		$	4.93		5.0	$	24,889

The following table summarizes stock-based compensation expense, and also the allocation within the consolidated statements of operations and comprehensive loss:

	Year Ended December 31,
(in thousands)	2020		2019
Research and development	$	425	$	170
General and administrative		3,867		639
Total stock-based compensation expense	$	4,292	$	809

The weighted-average grant-date fair value of options awarded during the year ended December 31, 2020 and 2019 was approximately $7.75 per share and $0.49 per share, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2020 and 2019 was $3.1 million and $0.2 million, respectively. The aggregate grant date fair value of stock options vested during the years ended December 31, 2020 and 2019 were $0.8 million and $0.7 million, respectively. As of December 31, 2020, there was a total of $23.6 million of unrecognized employee compensation costs related to non-vested stock option awards expected to be recognized over a weighted average period of 3.4 years.

The Company estimates the fair value of stock-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables, such as expected term, volatility, risk-free interest rate, and expected dividends. Each of these inputs is subjective and generally requires significant judgment to determine.

The following table summarizes the range of key assumptions used to determine the fair value of stock options granted during:

	Year Ended December 31,
	2020	2019
Risk-free interest rate	0.36% - 1.35%	2.50%
Expected term (in years)	5 - 6		5
Expected volatility	90% - 102%		93	%
Expected dividend yield	0%		0	%
Estimated fair value of common stock	$2.95 - $33.12	$2.38

Expected Term—The Company has opted to use the “simplified method” for estimating the expected term of stock options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the stock option (7 to 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 has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock options.

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 Company’s stock options.

Expected Dividend—The Company has not declared any dividends in its history and does not expect to issue dividends over the life of the stock options and therefore has estimated the dividend yield to be zero.

Fair value of Profit Certificates or Common Stock— Prior to the IPO, the fair value of the profit certificates or common stock underlying the stock options has historically been determined by the board of directors, with input from management. Because there had been no public market for the Company’s common stock (or profit certificates), the board of directors had determined the fair value of the common stock (or profit certificates) on the grant-date of the stock options by considering a number of objective and subjective factors, including profit certificate or common stock valuations performed by an unrelated third-party specialist, valuations of comparable companies, sales of the Company’s preferred stock to unrelated third parties, operating and financial performance, the lack of liquidity of the Company’s capital stock, and general and industry-specific economic outlook. The board of directors intended all stock options granted to be exercisable at a price per share not less than the estimated per share fair value of common stock (or profit certificates) underlying those stock options on the date of grant. After the IPO, the fair value of common stock underlying the stock options is determined based on the closing price of the Company’s common stock as quoted by the stock exchange.