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Stockholder's Equity
 6 Months Ended
Jun. 30, 2023
Equity [Abstract]  
Stockholder's Equity

9. Stockholder’s Equity

Common Stock

On May 17, 2023, we completed an underwritten registered offering (“URO”) of common stock pursuant to which we issued and sold 6,110,000 shares of our common stock at a purchase price of $6.55 per share. We received net proceeds from the URO of approximately $37.4 million after deducting commissions and other offering expenses. The URO was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-264517).

Equity Incentive Plan

The Company grants stock options under the 2021 Stock Incentive Plan (the “2021 Plan”). The Company also has stock options outstanding under the 2016 Stock Incentive Plan (“2016 Plan”), but is no longer granting awards under such plan. All shares of common stock underlying any awards that are forfeited, cancelled, expired, repurchased, or otherwise terminated under the 2021 and 2016 Plans are added back to the shares of common stock available for issuance under the 2021 Plan. On January 1, 2023 the number of shares available for issuance under the 2021 Plan increased by 1,450,299 shares as a result of the evergreen provision. As of June 30, 2023, 3,091,538 shares of common stock remain available for future issuance under the 2021 Plan.

The total compensation expense recognized in the statements of operations associated with all the stock-based compensation awards granted by the Company is as follows (in thousands):

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Research and development

 

$

984

 

 

$

1,069

 

 

$

2,056

 

 

$

2,066

 

General and administrative

 

 

895

 

 

 

886

 

 

 

1,823

 

 

 

1,789

 

Total

 

$

1,879

 

 

$

1,955

 

 

$

3,879

 

 

$

3,855

 

 

The weighted-average fair value of the stock options granted during the six months ended June 30, 2023 was $2.23. As of June 30, 2023, the total unrecognized stock-based compensation expense for unvested options was $15.9 million which is expected to be recognized over a weighted average period of 2.5 years.

The following table summarizes stock option activity under the 2021 Plan for the six months ended June 30, 2023:

 

 

 

Number of
Options

 

 

Weighted-
Average
Exercise
Price

 

 

Weighted-
Average
Remaining
Contractual
Term (Years)

 

 

Aggregate
Intrinsic
Value
(thousands)

 

Outstanding as of December 31, 2022

 

 

6,589,479

 

 

$

7.29

 

 

 

7.73

 

 

$

362

 

Granted

 

 

1,561,115

 

 

 

3.00

 

 

 

 

 

 

 

Exercised

 

 

(29,485

)

 

 

4.11

 

 

 

 

 

 

 

Cancelled or forfeited

 

 

(562,439

)

 

 

6.18

 

 

 

 

 

 

 

Outstanding as of June 30, 2023

 

 

7,558,670

 

 

$

6.50

 

 

 

7.72

 

 

$

12,170

 

Vested or expected to vest as of June 30, 2023

 

 

7,558,670

 

 

$

6.50

 

 

 

7.72

 

 

$

12,170

 

Options exercisable as of June 30, 2023

 

 

3,695,490

 

 

$

6.45

 

 

 

6.62

 

 

$

5,915

 

 

The aggregate intrinsic value of options exercised for the six months ended June 30, 2023 and 2022 was $0.1 million and $1.2 million, respectively.

The fair value of each option award granted is estimated on the date of grant using the Black-Scholes option pricing model and the weighted average assumptions. The underlying assumptions used to value stock options granted to participants using the Black-Scholes option-pricing presented on a weight average basis were as follows:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Risk-free interest rate

 

 

3.89

%

 

 

1.67

%

 

 

3.91

%

 

 

2.23

%

Expected dividend yield

 

 

0

%

 

 

0

%

 

 

0

%

 

 

0

%

Expected option term (in years) range

 

5.71

 

 

6.07

 

 

6.03

 

 

5.99

 

Expected stock price volatility

 

 

87.23

%

 

 

83.55

%

 

 

86.55

%

 

 

84.41

%

 

Employee Stock Purchase Plan

On March 20, 2021, the Company’s stockholders approved the 2021 Employee Stock Purchase Plan (the “ESPP”), which became effective on March 30, 2021. The ESPP initially provides participating employees with the opportunity to purchase up to an aggregate of 346,613 shares of the Company’s common stock. An annual increase in the number of shares of common stock reserved and available for issuance under the ESPP shall be equal to 1% of the number of shares of common stock outstanding on the immediately preceding December 31; and such lesser number of shares as determined by the Administrator as provided in the ESPP. As of June 30, 2023, there has been no increase in the shares reserved and available for issuance and no shares have been purchased by employees under the ESPP.