In December 2020, the Company adopted the 2020 Incentive Award Plan (“2020 Plan”), which became effective on December 10, 2020. The 2020 Plan initially reserved 2,606,546 shares of common stock for the issuance of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance bonus awards, performance stock units, dividend equivalents or other stock or cash based award granted to employees, directors and consultants of the Company. The number of shares reserved for future issuance under the 2020 Plan will increase annually on the first day of each fiscal year beginning in 2021 and ending in 2030 by the lesser of (i) 5% of the shares of common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by the Company's board of directors, provided, however, no more than 18,000,000 shares of the Company's common stock may be issued upon the exercise of incentive stock options. In 2021, an additional 1,334,099 shares of common stock became available for issuance under the 2020 Plan, as a result of the operation of the automatic annual increase provision. All options are exercisable over a period not to exceed the contractual term of ten years from the date the stock options were issued. As of December 31, 2021, there were 2,690,097 shares available for grant under the 2020 Plan.

Following the effectiveness of the 2020 Plan, the Company will not make any further grants under the 2015 Equity Incentive Plan (the “2015 Plan”). However, the 2015 Plan continues to govern the terms of options that remain outstanding under the 2015 Plan.

The 2015 Plan provided for grants of stock options, stock appreciation rights, restricted stock and restricted stock unit awards to employees, directors and consultants of the Company. As of December 31, 2021, options to purchase 2,519,217 shares of common stock were outstanding under the 2015 Plan. All options are exercisable over a period not to exceed the contractual term of ten years from the date the stock options were issued and are granted at prices not less than the estimated fair market value of the Company’s common stock on the grant date as determined by the board of directors. If an individual owns stock representing more than 10% of the Company’s outstanding shares, the exercise price of each share shall be at least 110% of the fair market value on the date of grant.

No additional grants will be made under the 2015 Plan, and all outstanding grants under the 2015 Plan that are repurchased, forfeited, expire or are cancelled are returned back to the 2015 Plan and are not available for grant under the 2020 Plan.

In December 2020, the Company adopted the 2020 Employee Stock Purchase Plan (the “2020 ESPP”). Under the 2020 ESPP, 252,337 shares of the Company's common stock were initially reserved for employee purchases of the Company's common stock under terms and provisions established by the Company's board of directors and approved by the Company's stockholders. The number of shares reserved for future issuance under the 2020 ESPP will increase annually on the first day of each fiscal year beginning in 2021 and ending in 2030 by the lesser of (i) 1% of the shares of common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by the Company's board of directors, provided, however, no more than 15,000,000 shares the Company's common stock may be issued under the 2020 ESPP. On March 28, 2022, an additional 25,000 shares of common stock became available for future issuance under the 2020 ESPP, as a result of the operation of this automatic annual increase provision.

Under the 2020 ESPP the Company's employees may purchase common stock through payroll deductions at a price equal to 85% of the lower of the fair market value of the stock at the beginning of the offering period or at the end of each applicable purchase period. The 2020 ESPP provides for a series of overlapping 24-month offering periods comprising four six-month purchase periods. The initial offering period under the 2020 ESPP is longer than 24 months, commencing February 15, 2021 and ending on May 14, 2023. Contributions under the 2020 ESPP are limited to a maximum of 15% of an employee's eligible compensation.

The following table summarizes the stock options activity for the year ended December 31, 2021:


				Options Outstanding
	Number of Shares Available for Grant			Number of Shares Underlying Outstanding Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Balances at December 31, 2020		2,606,546			3,194,113		$	11.05		8.46	$	97,105
Options authorized		1,334,099			—
Options granted		(1,566,150	)		1,566,150			34.83
Options exercised		—			(563,387	)		6.26
Options expired		4,324			(4,324	)		36.33
Options forfeited		311,278			(311,278	)		29.17
Balances at December 31, 2021		2,690,097			3,881,274		$	19.86	$	7.97	$	24,666
Shares exercisable, December 31, 2021					1,592,139		$	12.75	$	7.07	$	17,280
Shares vested and expected to vest, December 31, 2021					3,881,274		$	19.86	$	7.97	$	24,666

The following table is a summary of stock compensation expense for employees and nonemployees by function (in thousands):


	Year Ended December 31,
	2021		2020
Research and development	$	6,847	$	2,670
General and administrative		6,952		2,314
Total stock-based compensation expense	$	13,799	$	4,984

During the years ended December 31, 2021 and 2020 the Company granted 1,521,150 and 1,267,743 stock options to employees with a weighted-average grant date fair value of $34.46 and $11.84 per share, respectively and 45,000 and 54,000 stock options to nonemployees with a weighted-average grant date fair value of $47.42 and $11.05 per share, respectively. The total fair value of options vested during the years ended December 31, 2021 and 2020 was $13.8 million and $5.0 million, respectively. As of December 31, 2021, the unrecognized stock-based compensation expense of unvested options was $37.7 million and is expected to be recognized over a weighted-average period of 2.7 years.

Stock-based compensation expense recorded for employee options was $13.3 million and $4.6 million for the years ended December 31, 2021 and 2020, respectively. Stock-based compensation expense recorded for nonemployee consultants was $0.5 million and $0.4 million for the years ended December 31, 2021 and 2020, respectively.

Prior to the Company’s IPO, the fair value of the shares of common stock underlying the stock options was estimated by the board of directors at various dates considering the Company’s most recently available third-party valuations of common stock as well as a number of objective and subjective factors including valuation of comparable companies, sales of redeemable convertible preferred stock, operating and financial performance and general and industry specific economic outlook, amongst other factors. The fair value was determined in accordance with the guidance provided by the American Institute of Certified Public Accountants’ Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Subsequent to the Company’s IPO, the fair value of the Company’s common stock is determined based on its closing market price on the respective grant date.

The Company estimates the fair value of employee and nonemployee stock options using the Black-Scholes option pricing model. The fair value of employee and nonemployee options is recognized on a straight-line basis over the requisite service period of the awards. The fair value of the Company's stock options was estimated using the following assumptions for the years ended December 31, 2021 and 2020.


	Year Ended December 31, 2021		Year Ended December 31, 2020
	Employee	Nonemployee	Employee	Nonemployee
Expected term	5.8 – 6.3 years	6.3 years	5.5 – 6.3 years	6.0 years
Expected volatility	80.0% – 84.3%	83.5%	82.1% – 83.8%	82.1% – 83.1%
Risk-free interest rate	0.6% – 1.3%	0.6%	0.4% – 0.7%	0.4% – 0.7%
Expected dividend yield	0%	0%	0%	0%

Expected Term. The expected term for employee options is calculated using the simplified method as the Company does not have sufficient historical information to provide a basis for estimate. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. The expected term for nonemployee options is the contractual term of the options.

Expected Volatility. The expected volatility was estimated based on a study of publicly traded peer companies as the Company did not have sufficient trading history for its common stock. The Company selected the peer group based on similarities in industry, stage of development, size and financial leverage with the Company’s principal business operations. For each grant, the Company measured historical volatility over a period equivalent to the expected term.

Risk-free Interest Rate. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues whose term is similar in duration to the expected term of the respective stock option.

Expected Dividend Yield. The Company has not paid and does not anticipate paying any dividends on its common stock in the future. Accordingly, the Company has estimated the dividend yield to be zero.