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 was 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 2023, the board's compensation committee, as the 2020 Plan administrator, 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 1,830,853 shares, effective as of January 1, 2023. As of September 30, 2023, there were 4,457,004 shares available for issuance under the 2020 Plan.

On September 9, 2022, the Company granted 374,899 Restricted Stock Units (“RSUs”) to employees pursuant to an employee retention program approved by the board's compensation committee. The RSUs have graded vesting on an annual basis for two years of continuous service, as per 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 2023, the 2020 ESPP reserved shares were increased under clause (iii) by 457,713 shares, effective as of January 1, 2023. As of September 30, 2023, 116,018 shares are issued or outstanding, and there were 685,446 shares available for issuance, under the 2020 ESPP.

The following table summarizes option activity for the nine-month period ended September 30, 2023:


				Options Outstanding
									Weighted-
							Weighted		Average		Aggregate
	Shares						Average		Remaining		Intrinsic
	Available			Number of			Exercise		Contractual Life		Value
	for Grant			Options			Price		(in years)		(in 000s)
Balances at December 31, 2022		4,618,292			5,278,771		$	10.40		6.82	$	17,244
Shares reserved for issuance		1,830,853			—			—
Options granted		(2,022,125	)		2,022,125		$	5.83
Options forfeited / cancelled		29,984			(29,984	)	$	15.22
Options exercised		—			(96,360	)	$	0.73
Balances at September 30, 2023		4,457,004			7,174,552		$	9.22		7.14	$	9,944
At September 30, 2023
Vested and expected to vest					7,174,552		$	9.22		7.14	$	9,944
Exercisable					4,055,276		$	8.33		5.72	$	8,898

At September 30, 2023, the total compensation cost related to nonvested awards not yet recognized was $23,991. The weighted-average period over which the nonvested awards is expected to be recognized was 2.6 years.

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


	Nine Months Ended		Nine Months Ended
	September 30,		September 30,
	2023		2022
Risk-free interest rate		3.45% - 4.18%		1.48% - 3.42%
Expected life (in years)		5.50 - 6.44		5.50 - 6.44
Dividend yield		0%		0%
Expected volatility		75.2% - 77.7%		77.00%-81.00%

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


	Nine Months Ended		Nine Months Ended
	September 30,		September 30,
	2023		2022
Risk-free interest rate		5.36%		1.57%
Expected life (in years)		0.49		0.49
Dividend yield		0%		0%
Expected volatility		76.50%		77.00%

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.

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.

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.

Volatility: Volatility is based on the historical volatility of the Company's publicly traded shares for the expected term.

The following table presents RSU activity under the 2020 Plan as of September 30, 2023:


	Number of Stock Units			Weighted-Average Grant Date Fair Value
Unvested shares at December 31, 2022		374,899		$	13.60
Granted		—			—
Vested		(120,385	)	$	13.60
Forfeited		(10,450	)	13.60
Unvested shares at September 30, 2023		244,064		$	13.60

As of September 30, 2023, there was $2,343 of unrecognized compensation cost related to RSUs that are expected to vest. These costs are expected to be recognized over a weighted average remaining vesting period of 0.9 years.

Stock-based compensation expense recorded under ASC 718 related to stock options and RSU's granted and common stock issued under the 2020 ESPP were allocated to research and development and general and administrative expense as follows:


	For the Three Months Ended				For the Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2023		2022		2023		2022
Research and development	$	1,500	$	836	$	4,139	$	2,293
General and administrative		1,824		1,612		5,270		4,850
Total stock-based compensation	$	3,324	$	2,448	$	9,409	$	7,143

Stock-based compensation expense by award type included within the condensed consolidated statements of operations is as follows:


	For the Three Months Ended				For the Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2023		2022		2023		2022
Stock options	$	2,644	$	2,290	$	7,414	$	6,862
Restricted stock units		625		103		1,832		103
Employee stock purchase plan		55		55		163		178
Total stock-based compensation	$	3,324	$	2,448	$	9,409	$	7,143