The 2020 Equity Incentive Plan (the “2020 Plan”) was approved by the board of directors on September 24, 2020. The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards, cash-based awards and dividend equivalent rights to the Company’s officers, employees, directors and consultants. The number of shares of common stock initially reserved for issuance under the 2020 Plan is 4,406,374, which shall be increased, upon approval by the board of directors, on January 1, 2021 and each January 1 thereafter, in an amount equal to the least of (i) 4,406,374 shares of common stock, (ii) five percent (5%) of the outstanding common stock on the immediately preceding December 31, or (iii) such number of common stock determined by the board of directors no later than the immediately preceding December 31. For 2021, the board of directors exercised its discretion under clause (iii) to increase the number of shares of common stock reserved for issuance under the 2020 Plan by a lesser amount of 1,363,084 shares, effective as of January 1, 2022. As of December 31, 2021, there were 4,951,680 shares available for issuance under the 2020 Plan.

The 2020 Employee Stock Purchase Plan (the “2020 ESPP”) was approved by the board of directors on September 24, 2020. A total of 400,752 shares of common stock were initially reserved for issuance under this plan, which shall be increased, upon approval by the board of directors, on January 1, 2021 and each January 1 thereafter, to the lesser of (i) 801,504 shares of common stock, (ii) 1% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, or (iii) an amount determined by the board of directors or any of its committees no later than the last day of the immediately preceding fiscal year. For 2021, the 2020 ESPP reserved shares were increased under clause (iii) by zero shares, effective as of January 1, 2022. On November 19, 2021, employees exercised their right to purchase 10,480 shares under the 2020 ESPP. As of December 31, 2021, 47,066 shares are issued or outstanding, and there were 801,464 shares available for issuance, under the 2020 ESPP.

In 2013, the Company adopted the 2013 Stock Plan (the “2013 Plan”). On September 24, 2020, this plan was replaced by the 2020 Plan, and future issuances of incentive instruments will be governed by that plan. Subject to the provisions of the 2020 Plan, the Company had the option to either forfeit or repurchase remaining shares under the 2013 Equity Incentive Plan on or after the registration date. The Company chose to forfeit the remaining shares.

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

				Options Outstanding
									Weighted- Average
							Weighted		Remaining		Aggregate
	Shares			Number			Average		Contractual		Intrinsic
	Available			of			Exercise		Life		Value
	for Grant			Options			Price		(in years)		(in 000s)
Balances, December 31, 2020		4,609,725			4,090,970		$	3.14		7.13	$	238,792
Shares reserved for issuance		1,343,334			–
Options retired under 2013 Equity Plan		(237,542	)		–
Options granted		(807,180	)		807,180		$	29.22
Options forfeited / cancelled		43,343			(43,343	)	$	6.89
Options exercised		–			(608,800	)	$	2.03
Balances, December 31, 2021		4,951,680			4,246,007		$	8.22		6.86	$	68,506
At December 31, 2021
Vested and expected to vest					4,246,007		$	8.22		6.86	$	68,506
Exercisable					2,668,149		$	3.48		5.80	$	52,952

The weighted average grant date fair value of stock options granted during the year ended December 31, 2021 and 2020 was $20.03 and $3.34, respectively.

The aggregate intrinsic value of options vested and exercisable as of December 31, 2021 and 2020 is calculated based on the difference between the exercise price and the fair value of our common stock. The intrinsic value of options exercised in 2021 and 2020 was $18,534 and $245, respectively.

As of December 31, 2021, the total compensation cost related to nonvested service-based awards not yet recognized is $15,708. The weighted-average period over which the nonvested awards is expected to be recognized is 3.1years.

The Company estimated the fair value of stock options using the Black-Scholes options valuation model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of employee stock options was estimated using the following assumptions:


	Year Ended December 31,
	2021	2020	2019
Risk-free interest rate	0.35% - 1.30%	0.31% - 1.51%	1.49% - 2.51%
Expected life (in years)	5.50 - 6.44	4.92 - 6.40	5.27 - 6.37
Dividend yield	0%	0%	0%
Expected volatility	76.50% - 79.90%	70.70% - 77.60%	72.07% - 72.69%

The weighted average assumptions used to estimate the fair value of stock options granted and stock purchase rights under the ESPP are as follows:

Expected Term: The Company uses the simplified method to calculate expected term described in the SEC’s Staff Accounting Bulletin No. 107, which takes into account vesting term and expiration date of the options.

Volatility: Volatility is based on an average of the historical volatilities of comparable publicly traded companies for the expected term.

Risk Free Interest Rate: The risk-free rate is based on the U.S. Treasury yields in effect at the time of grant for periods corresponding with the expected term of the option.

Dividend Yield: The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and therefore, used an expected dividend yield of zero in the valuation model.

Stock-based compensation expense recorded under ASC 718 related to options granted was allocated to research and development and general and administrative expense as follows: