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Stock-Based Compensation
3 Months Ended
Mar. 31, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation

11. Stock-Based Compensation

2021 Employee Stock Purchase Plan

In April 2021, the Company’s board of directors and stockholders approved the 2021 ESPP. The 2021 ESPP became effective immediately prior to the effectiveness of the Company’s registration statement on Form S-1 for its IPO. The 2021 ESPP provides employees the opportunity to purchase shares at a 15% discount at the lower of the share price at the beginning or end of six-month offering periods. 852,971 shares have been reserved and approved for this purpose for the 2021 plan year. Beginning on January 1, 2022, the number of shares reserved and available for issuance under the plan will increase on each January 1 through January 1, 2031, by the lesser of (A) 3,000,000 shares of common stock, (B) 1% of the cumulative number of shares of common stock issued and outstanding on the immediately preceding December 31st or (C) such lesser number of shares of common stock as determined by the Board. On January 1, 2022, an additional 414,513 shares were added to the 2021 ESPP, representing 1% of total common shares outstanding at December 31, 2021.The expense incurred under this plan for the three months ended March 31, 2022 was immaterial to the financial statements. The amounts have been included in the total stock-based compensation line items in the accompanying financial statements and disclosures.

Equity Incentive Plans

In April 2021, the Company’s board of directors and stockholders approved the 2021 Plan and terminated the 2018 Plan with respect to any unissued awards. The 2021 Plan became effective immediately prior to the effectiveness of the Company’s registration statement on Form S-1 for its IPO. The 2021 Plan provides for the issuance of up to 3,015,907 new share-based awards, as well as the 3,381,382 options to purchase common stock then outstanding under the 2018 Plan, for a total of 6,397,289 shares. To the extent outstanding options granted under the 2018 Plan are cancelled, forfeited, or otherwise terminated without being exercised and would otherwise have been returned to the share reserve under the 2018 Plan, the number of shares underlying such awards will be available for future grant under the 2021 Plan. Beginning on January 1, 2022, the number of shares reserved and available for issuance under the 2021 Plan will increase on each January 1 through January 1, 2031 by the lesser of (A) 5% percent of the number of shares of stock issued and outstanding on the immediately preceding December 31st or (B) such lesser number of shares of common stock as determined

by the Board. On January 1, 2022 an additional 2,072,569 shares were added to the 2021 Plan, representing 5% of total common shares outstanding at December 31, 2021.

As of March 31, 2022, 2,451,066 shares remained available for future grant under the 2021 Plan. 5,882,848 options were outstanding under the 2021 Plan and 2018 Plan as of March 31, 2022.

The Company’s 2021 Plan provides for the Company to sell or issue common stock or restricted common stock or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, nonemployees and members of the board of directors of the Company. The 2021 Plan is administered by the board of directors or at the discretion of the board of directors by the compensation committee of the board. The exercise prices, vesting periods, and other restrictions are determined at the discretion of the compensation committee of the board of directors, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the share of common stock on the date of grant and the contractual term of stock option may not be greater than 10 years. Stock options granted to date typically vest over four years.

Stock Option Valuation

The assumptions used to determine the fair values of stock options granted to employees and directors under the 2021 Plan and 2018 Plan are presented as follows:

 

 

 

Three months ended March 31,

 

 

2022

 

2021

Fair value of common stock

 

$7.58 - 16.56

 

$5.72 - 6.79

Dividend yield

 

—%

 

—%

Volatility

 

82.7% - 82.9%

 

80.6% - 83.0%

Risk-free interest rate

 

1.46 % - 1.70%

 

0.50% - 1.07%

Expected term (years)

 

6.25

 

6.25

Summary of Option Activity

The Company’s stock option activity regarding employees, directors, and nonemployees is summarized as follows (in thousands excepts share and per share amounts):

 

 

 

Shares

 

 

Weighted-
Average
Exercise
Price

 

 

Weighted-
Average
Remaining
Contractual
Life (in years)

 

 

Aggregate
intrinsic
value

 

Options outstanding—January 1, 2021

 

 

2,745,185

 

 

$

4.20

 

 

 

9.40

 

 

$

4,183

 

Granted

 

 

1,076,022

 

 

 

9.19

 

 

 

 

 

 

 

Exercised

 

 

(149,707

)

 

 

2.12

 

 

 

 

 

 

 

Cancelled

 

 

(7,605

)

 

 

1.38

 

 

 

 

 

 

 

Forfeited

 

 

(20,099

)

 

 

5.79

 

 

 

 

 

 

 

Options outstanding—December 31, 2021

 

 

3,643,796

 

 

$

5.75

 

 

 

8.69

 

 

$

34,754

 

Granted

 

 

2,473,700

 

 

 

9.07

 

 

 

 

 

 

 

Exercised

 

 

(10,680

)

 

 

2.83

 

 

 

 

 

 

 

Cancelled

 

 

 

 

 

 

 

 

 

 

 

 

Forfeited

 

 

(149,202

)

 

 

7.71

 

 

 

 

 

 

 

Options outstanding—March 31, 2022

 

 

5,957,614

 

 

$

7.09

 

 

 

9.02

 

 

$

16,418

 

Options exercisable—March 31, 2022

 

 

1,297,253

 

 

$

4.34

 

 

 

8.12

 

 

 

 

Options vested and expected to vest—March 31, 2022

 

 

2,652,637

 

 

$

2.69

 

 

 

7.58

 

 

 

 

 

Additional information with regard to stock option activity involving employees and directors is as follows (in thousands except per share amounts):

 

 

 

Three months ended March 31,

 

 

 

2022

 

 

2021

 

Weighted-average grant-date fair value per option of total options granted

 

$

6.49

 

 

$

4.73

 

Aggregate intrinsic value of stock options exercised

 

 

76

 

 

 

166

 

 

As of March 31, 2022, total unrecognized compensation cost related to the unvested awards to employees, directors, and nonemployees is $25.0 million, which is expected to be recognized over a weighted-average period of 3.4 years.

Restricted Stock Units
 

The fair values of restricted stock units (“RSUs”) are based on the fair market value of the Company’s common stock on the date of grant. Each RSU represents a contingent right to receive one share of the Company’s common stock upon vesting. In general, RSUs vest (i) annually in four equal installments on the grant anniversary or (ii) incrementally over two years. The following table summarizes the Company’s RSU activity for the three months ended March 31, 2022:

 

 

 

Number of Restricted
Stock Units

 

 

Weighted-
Average Grant
Date Fair Value

 

Outstanding at January 1, 2022

 

 

 

 

$

 

Granted

 

 

864,802

 

 

 

9.08

 

Vested

 

 

 

 

 

 

Forfeited

 

 

(5,033

)

 

 

9.10

 

Outstanding at March 31, 2022

 

 

859,769

 

 

$

9.08

 

As of March 31, 2022, total unrecognized compensation cost related to the unvested awards to employees is $7.2 million, which is expected to be recognized over a weighted-average period of 2.3 years.

Stock-Based Compensation

The Company recorded stock-based compensation expense regarding its employees, directors, and nonemployees as follows (in thousands):

 

 

 

Three months ended March 31,

 

 

 

2022

 

 

2021

 

Research and development expense

 

$

1,276

 

 

$

326

 

General and administrative expense

 

 

921

 

 

 

509

 

Total

 

$

2,197

 

 

$

835