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Stock-Based Compensation | 3 Months Ended
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Mar. 31, 2022
Stock-Based Compensation |
Stock-Based Compensation | 7. Stock-Based Compensation ​ In 2014, the Company’s Board of Directors and stockholders approved and adopted the 2014 Stock Plan (the “2014 Plan”). The 2014 Plan was intended to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company. The 2014 Plan permitted the grant of options and restricted stock awards (including restricted stock purchase rights and restricted stock bonus awards). The maximum aggregate number of shares that may be subject to awards and sold under the 2014 Plan as of December 31, 2019 was 717,360 shares, which was subsequently increased to 4,842,180 in September 2020.The 2014 Plan was terminated on the date the 2020 Equity Incentive Plan (the “2020 Plan”), which is described below, became effective, and no additional awards will be made pursuant to the 2014 Plan. However, any outstanding awards granted under the 2014 Plan will remain outstanding, subject to the terms of the 2014 Plan award agreements, until such outstanding options are exercised or until any awards terminate or expire by their terms. In 2020, the Company’s Board of Directors and stockholders approved and adopted the 2020 Plan. The 2020 Plan is intended to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company. The maximum number of shares of common stock that may be issued under the 2020 Plan will not exceed 6,494,510 shares of the Company’s common stock, which is the sum of (i) 2,152,080 new shares, plus (ii) an additional number of shares not to exceed 4,342,430 shares, consisting of any shares of the Company’s common stock subject to outstanding stock options or other stock awards granted under the Company’s 2014 Plan that, on or after the 2020 Plan becomes effective, terminate or expire prior to exercise or settlement; are not issued because the award is settled in cash; are forfeited because of the failure to vest; or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price. In addition, the number of shares of the Company’s common stock reserved for issuance under the 2020 Plan automatically increases on January 1 of each year for a period of ten years, beginning on January 1, 2021 and continuing through January 1, 2030, in an amount equal to the lesser of (1) 5% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year, or (2) a lesser number of shares determined by the Company’s board of directors no later than December 31 of the immediately preceding year. The maximum number of shares of the common stock that may be issued on the exercise of incentive stock options under the 2020 Plan is 19,483,530 shares. The 2020 Plan permits the grant of options restricted stock awards, stock appreciation rights, restricted stock unit awards, performance awards, and other awards. In 2022, the Company’s Board of Directors approved and adopted the 2022 Inducement Plan (the “2022 Inducement Plan”). Under the 2022 Inducement Plan, initially 2,000,000 shares of common stock were reserved for issuance. The exercise price for each option and stock appreciation right shall be established at the discretion of the Board, provided that the exercise price of a stock option will not be less than 100% of the fair market value of the Company’s common stock on the date of grant. Specific vesting for stock options and stock appreciation rights is service related and determined in each award agreement, where stock options and stock appreciation rights are fully vested at the grant date or follow a graded vesting schedule. Stock options and stock appreciation rights granted under the Plan generally expire ten years after the date of grant. Stock Option Valuation The fair value of stock option grants is estimated using the Black-Scholes option-pricing model. The Company lacks company-specific historical and implied volatility information. Therefore, it estimated its expected stock volatility based on the historical volatility of a publicly traded set of peer companies in addition to its own historical volatility. For options with service- based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to nonemployees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is 0% since the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The assumptions that the Company used to determine the estimated grant-date fair value of stock options granted to employees and directors under the 2020 Plan and the 2022 Inducement Plan were as follows, presented as a weighted average: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, | ​ | March 31,
​ | ​ | 2022 | ​ | 2021
Risk-free interest rate |  | ​ | 1.69% |  | ​ | 0.43%
Expected term (in years) | ​ | ​ | 6.06 | ​ | ​ | 5.93
Expected volatility | ​ | ​ | 79.17% | ​ | ​ | 77.34%
Expected dividend yield |  |  | — | ​ | ​ | —
​ Stock Option Activity The following table summarizes the stock option activity under the 2014 Plan, the 2020 Plan and the 2022 Inducement Plan: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Weighted | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted | ​ | Average | ​ | ​ | ​
​ | ​ | ​ | ​ | Average | ​ | Remaining | ​ | ​ | ​
​ | ​ | Number of | ​ | Exercise | ​ | Contractual | ​ | Aggregate
​ | ​ | Shares | ​ | Price | ​ | Term | ​ | Intrinsic Value
​ | ​ | ​ | ​ | ​ | ​ | (in years) | ​ | (in thousands)
Outstanding as of December 31, 2021 |  | 5,768,028 |  | $ | 15.99 |  | 8.82 |  | $ | 11,365
Granted | ​ | 2,663,650 | ​ | ​ | 7.07 | ​ | ​ | ​ | ​ | —
Exercised(1) | ​ | (22,744) | ​ | ​ | 4.02 | ​ | — | ​ | ​ | —
Forfeited | ​ | (40,581) | ​ | ​ | 22.39 | ​ | — | ​ | ​ | —
Outstanding as of March 31, 2022(2) | ​ | 8,368,353 | ​ | $ | 13.16 | ​ | 8.76 | ​ | $ | 1,031
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Options vested and exercisable as of March 31, 2022 | ​ | 2,138,539 | ​ | $ | 13.44 | ​ | 8.29 | ​ | $ | 710
Options expected to vest as of March 31, 2022 | ​ | 6,229,814 | ​ | $ | 13.06 | ​ | 8.92 | ​ | $ | 321
​
(1) | Exercised amount includes vesting of early exercised options.
(2) | Balance as of March 31, 2022 includes 39,609 unvested early exercised stock options.
Early Exercise of Stock Options In September 2020, one employee and one non-employee paid $0.6 million to early exercise 135,525 options with exercise prices ranging from $4.406 per share to $4.824 per share. As of March 31, 2022, 95,916 of such shares had vested with the remaining shares vesting over their respective terms. The terms of the 2014 Plan permit certain option holders to exercise options before their options are vested, subject to certain limitations. The early exercised options are subject to the same vesting provisions in the original stock option awards. Shares issued as a result of early exercise that have not vested are subject to repurchase by the Company upon termination of the purchaser’s employment, at the price paid by the purchaser. Such shares are not deemed to be outstanding for accounting purposes until they vest and are therefore excluded from shares outstanding and from basic and diluted net loss per share until the repurchase right lapses and the shares are no longer subject to the repurchase feature. A liability is recognized related to the cash proceeds of the unvested options and is reclassified into common stock and additional paid-in capital as the shares vest and the repurchase right lapses. Accordingly, the Company has recorded the unvested portion of the exercise proceeds of $0.2 million in other current liabilities as of March 31, 2022. Restricted Stock Awards In June 2020, the Company granted to certain employees 789,095 shares of restricted common stock (the “RSAs”) under the 2014 Plan as consideration for services with a deemed value of $2.40 per share, or $1.9 million. The following table summarizes the restricted stock activity under the Plan during the three months ended March 31, 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Number of Shares | ​ | Grant Date Fair Value
Unvested restricted stock as of December 31, 2021 |  | ​ | 493,185 |  | $ | 2.40
Granted | ​ | ​ | — | ​ | ​ | —
Vested | ​ | ​ | (49,318) | ​ | ​ | 2.40
Forfeited | ​ | ​ | — | ​ | ​ | —
Unvested restricted stock as of March 31, 2022 |  | ​ | 443,867 | ​ | $ | 2.40
​ 2020 Employee Stock Purchase Plan In 2020, the Company’s board of directors and stockholders approved and adopted the 2020 ESPP. The ESPP became effective immediately prior to the date of the underwriting agreement related to the IPO. 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 the common stock purchased under the ESPP is equal to the lesser of (i) 85% of the fair market value of a share of the Company’s common stock on the first day of an offering; or (ii) 85% of the fair market value of a share of the Company’s common stock on the date of purchase. Each offering period is not to exceed 27 months and will include one or more purchase periods (each a “Purchase Period”) as approved by the Company’s board of directors in the offering. The current offering period will consist of two (2) six month purchase periods (each a “Purchase Period”) during which payroll deductions of the participants are accumulated under the ESPP. The last business day of each Purchase Period is referred to as the “Purchase Date.” The first Purchase Period commenced on November 18, 2020 with a purchase date of May 15, 2021. The second Purchase Period commenced on May 16, 2021 and had a purchase date of November 15, 2021. The third Purchase Period commenced on November 16, 2021 and has a purchase date of May 16, 2022. A total of 430,416 shares of common stock were initially reserved for issuance pursuant to the ESPP. The ESPP is a compensatory plan as defined by the authoritative guidance for stock-based compensation. The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock offered under the ESPP. Stock-based compensation expense related to the ESPP was $0.1 million and less than $0.1 million for the three months ended March 31, 2022 and 2021, respectively. Stock-Based Compensation Expense Stock-based compensation expense related to awards granted under the 2014 Plan, the 2020 Plan, the 2020 ESPP Plan and the 2022 Inducement Plan was classified in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended March 31,
​ | ​ | 2022 | ​ | 2021
Research and development |  | $ | 3,067 |  | $ | 1,734
General and administrative |  |  | 1,898 | ​ | ​ | 1,474
Total |  | $ | 4,965 | ​ | $ | 3,208
​

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