Share-Based Payments

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

7. Share-Based Payments

In 2016, the Company adopted the 2016 Stock Plan. On July 8, 2020, the Company’s shareholders approved the 2020 Stock Option and Incentive Plan (the “2020 Stock Plan”), which became effective on the date immediately prior to the effectiveness of the Company’s registration statement on Form

S-1

for its IPO. The 2020 Stock Plan provides for the issuance of up to 8,376,080 of share-based awards. All of the Company’s employees, officers, directors and consultants are eligible to be granted options, restricted stock units (“RSUs”) and other stock-based awards under the terms of the 2020 Stock Plan. There were 8,275,722 share-based awards available for grant at September 30, 2020.

Subsequent to July 20, 2020, no

further

awards will be made under the 2016 Stock Plan and all future equity-based awards will be granted under the 2020

Stock

Plan. To the extent outstanding options granted under the 2016 Plan are cancelled, forfeited or otherwise terminated without being exercised and would otherwise have been returned to the share reserve under the 2016 Plan, the number of shares underlying such awards will be available for future grant under the 2020 Stock Plan.

The following table summarizes the stock option activity under the 2016 Stock Plan and the 2020 Stock Plan for the nine months ended September 30, 2020:


	Number of Stock Options			Weighted- Average Exercise Price		Weighted- Average Remaining Term (years)		Aggregate Intrinsic Value
Outstanding at December 31, 2019		5,306,176		$	4.62		8.99	$	3,214
Granted		2,649,713			7.67
Exercised		(283,275	)		4.09
Cancelled		(210,835	)		4.91

Outstanding at September 30, 2020		7,461,779		$	5.71		8.71	$	275,178

Vested at September 30, 2020		1,696,242		$	4.42		8.06	$	64,744

In the first quarter of 2020, the Company’s board of directors approved the issuance of options with performance-based vesting conditions to purchase 1,960,547 shares of common stock. The commencement of vesting is based on the achievement of certain scientific and operational milestones during a

two-year

period, for which the achievement is discretionary and subject to the approval of the Company’s board of directors. Accordingly, the Company is applying variable accounting for these awards until the board of directors approves the commencement of vesting of the options. The service inception date precedes the grant date for these awards as the awards have been authorized, the recipients are providing service prior to the grant date, and there are performance conditions that, if not met by the accounting grant date, would result in the forfeiture of the award. Therefore, the stock-based compensation expense to be recognized for the options is based on the fair value of the awards on the accounting grant date. The Company’s board of directors, in its discretion, determined that a portion of the performance conditions had been achieved during the second quarter of 2020. The Company has made a probability assessment of the likelihood for achievement of the remaining conditions as of September 30, 2020. The Company recognized stock-based compensation expense associated with the options for which the board of directors approved the commencement of vesting and for awards where achievement of the performance conditions is considered probable in the amount of $10,324

and $12,947

in the statement of operations for the

three and

nine month period

ended September 30, 2020

, respectively

Stock-based compensation expense included in the Company’s consolidated statements of operations and comprehensive loss is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Research and development expenses	$	5,367	$	734	$	8,205	$	1,935
General and administrative expenses		6,562		514		9,211		1,215

	$	11,929	$	1,248	$	17,416	$	3,150

As of September 30, 2020, total unrecognized compensation cost related to the unvested stock-based awards was $55,762, which is expected to be recognized over a weighted average period of 2.64 years.