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Equity-Based Compensation

12 Months Ended

Dec. 31, 2021

9. Equity-Based Compensation

Equity Plans

As of December 31, 2021, the Company has three active equity plans, the 2018 Stock Option and Incentive Plan (the “2018 Plan”), the 2017 Stock Option and Incentive Plan (the “2017 Plan”), and the 2018 Employee Stock Purchase Plan (the “2018 ESPP”).

2018 Stock Option and Incentive Plan

The 2018 Plan was adopted by the Company’s Board of Directors on May 2, 2018, and approved by the Company’s stockholders on May 11, 2018. The 2018 Plan has replaced the 2017 Plan as no additional awards will be granted under that plan following the consummation of the IPO. At December 31, 2021 there were 2,394,091 shares available to grant under the 2018 Plan.

The 2018 Plan provides for the grant of equity-based incentive awards, including incentive stock options, non-qualified stock options, restricted stock awards, unrestricted stock awards and restricted stock units to the Company’s officers, employees, directors and other key persons (including consultants). Stock options and restricted stock units granted under the 2018 Plan to employees generally vest over four years. The shares of common stock underlying any awards that are forfeited, cancelled, repurchased or are otherwise terminated by the Company under the 2018 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan.

The 2018 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2019, by 4% 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 Board of Directors or compensation committee (the “Annual Increase”). These limits are subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization.

2017 Stock Option and Incentive Plan

The 2017 Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock awards, unrestricted stock awards and restricted stock units. Stock options granted under the 2017 Plan to employees generally vest over four years. The shares of common stock underlying any awards that are forfeited, cancelled, repurchased or are otherwise terminated by the Company under the 2017 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan.

2018 Employee Stock Purchase Plan

On May 2, 2018, the Board of Directors adopted the 2018 ESPP, and it was approved by the stockholders on May 11, 2018. At December 31, 2021 there were 1,137,373 shares available to grant under the 2018 ESPP and no shares had been issued. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2019 through January 1, 2028, by the lesser of (i) 353,614 shares of common stock, (ii) 1% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31 or (iii) such lesser number of shares as determined by the 2018 ESPP administrator. The number of shares reserved under the 2018 ESPP is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization.

Total Equity-Based Compensation Expense

The Company recorded equity-based compensation expense related to all equity-based awards, which was allocated as follows in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2021 and 2020 (in thousands):


	Year Ended
	December 31,
	2021		2020
Research and development expense	$	10,176	$	3,554
General and administrative expense		12,973		7,621
	$	23,149	$	11,175

Equity-based compensation during the year ended December 31, 2020 includes $1.5 million related to the modification of certain equity awards.

The following table summarizes the Company’s unrecognized equity-based compensation expense as of December 31, 2021:



	As of December 31, 2021
		Unrecognized Expense (in thousands)	Weighted Average Remaining Period of Recognition (years)
Restricted Stock Units		12,079	3.3
Stock Options		45,364	2.4
	$	57,443

Restricted Stock Awards

The following table summarizes the Company’s restricted stock award activity for the current year:


		Weighted
		Average Fair
		Value per Share
	Number of Shares	at Issuance
Restricted stock awards as of December 31, 2020	57,969	$	5.77
Vested	(57,969)	$	5.77
Restricted stock awards as of December 31, 2021	—	$	—

Restricted Stock Units

The following table summarizes the Company’s restricted stock unit activity for the current year:


		Weighted
		Average Grant
	Number of Units	Date Fair Value
Restricted stock units as of December 31, 2020	—	$	—
Granted	392,661	$	49.48
Forfeited	(77,760)	$	57.98
Restricted stock units as of December 31, 2021	314,901	$	47.38

Stock Options

The following table summarizes the Company’s stock option activity for the current year:


				Weighted
		Weighted		Average
	Number of	Average		Remaining	Aggregate
	Shares	Exercise Price		Contractual Term	Intrinsic Value
				(in years)	(in thousands)
Outstanding as of December 31, 2020	3,679,931	$	14.96	8.01	$	123,600
Granted	1,462,930	$	49.23
Exercised	(556,629)	$	12.38
Cancelled	(842,832)	$	29.12
Outstanding as of December 31, 2021	3,743,400	$	25.55	8.06	$	26,272
Options exercisable as of December 31, 2021	1,544,062	$	18.42	7.18	$	14,851

Using the Black-Scholes option pricing model, the weighted average fair value of options granted during the year ended December 31, 2021 was $36.08.

The following weighted average assumptions were used in determining the fair value of options granted in the years ended December 31, 2021 and 2020:


	Year Ended
	December 31,
	2021		2020
Risk-free interest rate	0.86	%	0.92	%
Expected dividend yield	0.0	%	0.0	%
Expected term (years to liquidity)	6.22		6.21
Expected volatility	87.62	%	82.09	%