In September 2021, the Company's Board of Directors adopted, and its stockholders approved, the 2021 Incentive Award Plan (the 2021 Plan). Upon the adoption of the 2021 Plan, the Company restricted the grant of future equity awards under the 2020 Equity Incentive Plan (the 2020 Plan).

The 2021 Plan provides for the grants of stock options and other equity-based awards to employees, non-employee directors, and consultants of the Company. A total of 5,570,000 shares of the Company’s common stock were initially reserved for issuance pursuant to the 2021 Plan. In addition to 4,537,850 reserved shares, the number of shares reserved under the 2021 Plan also included 1,032,150 shares of the Company’s common stock that remained available for issuance under the 2020 Plan as of immediately prior to the effectiveness of the 2021 Plan. The 2021 Plan share reserve will be increased by the number of shares under the 2020 Plan that are repurchased, forfeited, expired or cancelled after the effective date of the 2021 Plan. In addition, the number of shares of the Company’s common stock available for issuance under the 2021 Plan automatically increases on the first day of each fiscal year, beginning with the Company’s 2022 fiscal year, in an amount equal to the lesser of (1) 5% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding fiscal year, or (2) such smaller amount as determined by the Company’s Board of Directors. On January 1, 2022, the number of shares reserved for issuance under the 2021 Plan was increased to 7,696,809 shares and on January 1, 2023, the number of shares reserved for issuance under the 2021 Plan was increased to 9,828,531 shares. As of March 31, 2023, 6,138,644 shares were authorized for issuance under the 2021 Plan, inclusive of shares added from cancellations under the 2020 Plan.

A summary of the Company’s stock option activity for the period ended March 31, 2023 is as follows (in thousands, expect share and per share data and years):


	Options			Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2022		5,890,869		$	7.91		8.8	$	13,492
Granted		541,300		$	8.55
Exercised		(97,227	)	$	1.68
Cancelled		(208,849	)	$	11.68
Outstanding at March 31, 2023		6,126,093		$	7.94		8.5	$	55,897
Exercisable at March 31, 2023		1,975,304		$	7.06		7.5	$	20,377
Vested and expected to vest as of March 31, 2023		6,126,093		$	7.94		8.5	$	55,897

The Company estimated the fair value of stock options using the Black-Scholes valuation model. The Company accounts for forfeitures of options when they occur. Previously recognized compensation expense for an award is reversed in the period that the award is forfeited. The fair value of stock options was estimated using the following assumptions (excluding option modifications):


	Three Months Ended March 31,
	2023	2022
Stock Options:
Stock price	$7.07 - 13.20	$10.96 - 12.31
Risk-free rate of interest	3.5 - 4.2%	1.6 - 2.0%
Expected term (years)	6.0 - 6.1	6.0 - 6.1
Expected stock price volatility	89.2 - 89.7%	86.4 - 90.4%
Dividend yield	—	—

Stock-based compensation expense recognized for all equity awards has been reported in the statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Research and development expense	$	1,460	$	1,478
General and administrative expense		973		2,494
Total	$	2,433	$	3,972

During the period ended March 31, 2022, the Company recognized $1.2 million additional stock-based compensation expense within general and administrative expenses related to accelerated vesting of options of a former executive.

The weighted-average grant date fair value of options granted for the three months ended March 31, 2023 and 2022 was $6.51 and $8.52 per share, respectively.

Forfeitures resulting in the reversal of compensation expense were immaterial for the three months ended March 31, 2023 and 2022.

As of March 31, 2023, the unrecognized compensation cost related to outstanding employee and nonemployee options was $24.5 million, and is expected to be recognized as expense over a weighted-average period of approximately 2.3 years.

In September 2021, the Company’s Board of Directors and stockholders approved and adopted the 2021 Employee Stock Purchase Plan (ESPP). The ESPP became effective on the business day immediately prior to the effective date of the Company’s first registration statement. A total of 380,000 shares of the Company’s common stock were initially reserved for issuance pursuant to the ESPP. In addition, the number of shares of the Company’s common stock available for issuance under the ESPP will automatically increase on the first day of each fiscal year, beginning with the Company’s 2022 fiscal year, in an amount equal to the lesser of (1) 1% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding fiscal year, or (2) such smaller amount as determined by the Company’s Board of Directors. On January 1, 2022, the number of shares reserved for issuance under the ESPP was increased to 805,361 shares and on January 1, 2023, the number of shares reserved for issuance under the ESPP was increased to 1,231,705 shares.

The ESPP permits eligible employees who elect to participate in an offering under the ESPP to have up to 15% of their eligible earnings withheld, subject to certain limitations, to purchase shares of common stock pursuant to the ESPP. The price of common stock purchased under the ESPP is equal to 85% of the lower of the fair market value of the common stock at the commencement date of each offering period or the relevant date of purchase. Each offering period is 24 months, with new offering periods commencing every six months on or about the dates of March 15 and September 15 of each year. During the three months ended March 31, 2023 and 2022, the Company issued 32,442 and 27,518 shares, respectively, of common stock in connection with the ESPP. As of March 31, 2023, there were 1,153,344 shares available for future purchase under the ESPP.

The Company estimated the fair value of shares purchased under the ESPP, using the Black-Scholes valuation model. The fair value of shares purchased under the ESPP was estimated using the following assumptions:


	Three Months Ended March 31,
	2023	2022
Stock Options:
Stock price	$14.77	$11.03
Risk-free rate of interest	4.1 - 4.9%	0.9 - 2.0%
Expected term (years)	0.5 - 2.0	0.5 - 2.0
Expected stock price volatility	99.2 - 122.5%	80.7 - 89.8%
Dividend yield	—	—

During the three months ended March 31, 2023 and 2022, the Company recognized compensation expense of $0.1 million and $0.2 million, respectively, related to the ESPP. As of March 31, 2023, the remaining unrecognized compensation expense related to the ESPP was $0.7 million, and is expected to be recognized as expense over a weighted-average period of approximately 1.4 years.

Certain individuals were granted the ability to early exercise their stock options prior to the IPO. 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. As of March 31, 2023 and December 31, 2022, 225,581 and 277,081 unvested shares issued under early exercise provisions were subject to repurchase by the Company, respectively. As of March 31, 2023 and December 31, 2022, the Company recorded $0.1 million and $0.2 million, respectively, associated with early exercised stock options in other long-term liabilities.