8. Stockholders' Equity

Common Stock

In November 2021, the Company entered into an Open Market Sale Agreement (the "Sales Agreement") with Jefferies LLC ("Jefferies") as the Company's sales agent. On March 5, 2024, the Company filed a universal shelf registration statement on Form S-3, (the “2024 Shelf Registration Statement”), and included a prospectus relating to the Sales Agreement. Under the 2024 Shelf Registration Statement, the Company may offer and sell debt securities, common stock, preferred stock, units and/or warrants from time to time at an indeterminate aggregate offering price in one or more offerings. In November 2024, the Company filed a prospectus supplement relating to the Sales Agreement, pursuant to which, in accordance with the Sales Agreement, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $300.0 million in an “at-the-market” offering. During the three months ended March 31, 2026, the Company did not issue or sell any shares of common stock pursuant to the Sales Agreement.

2020 Stock Incentive Plan

In August 2020, the Company’s board of directors adopted and the Company’s stockholders approved the 2020 Stock Incentive Plan (the "2020 Plan"), which became effective on September 16, 2020. The 2020 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards to employees, directors, consultants and advisors of the Company. The 2020 Plan is administered by the Company’s board of directors or by a committee appointed by the board of directors. Upon the effectiveness of the 2020 Plan, the Company ceased granting awards under the 2018 Stock Incentive Plan. The number of shares initially reserved for issuance under the 2020 Plan was 4,884,233. The number of shares of common stock reserved for issuance under the 2020 Plan may automatically increase on the first day of each fiscal year, beginning with the fiscal year commencing on January 1, 2021 and continuing for each fiscal year until, and including the fiscal year commencing on, January 1, 2030, in an amount equal to the lower of (1) 5% of the shares of common stock outstanding on such date and (2) an amount determined by the Company’s board of directors. On January 1, 2026, 8,247,527 shares were added to the shares reserved for issuance under the 2020 Plan in the sixth of these annual increases.

As of March 31, 2026, 8,516,757 shares remained available for future issuance under the 2020 Plan.

2020 Employee Stock Purchase Plan

In August 2020, the Company’s board of directors adopted and the Company’s stockholders approved the 2020 Employee Stock Purchase Plan (the “2020 ESPP”), which became effective September 16, 2020. The 2020 ESPP is administered by the Company’s board of directors or by a committee appointed by the board of directors. The 2020 ESPP initially provides participating employees with the opportunity to purchase up to an aggregate of 488,414 shares of common stock. The number of shares of common stock reserved for issuance under the 2020 ESPP may automatically increase on the first day of each fiscal year, beginning with the fiscal year commencing on January 1, 2021 and continuing for each fiscal year until, and including the fiscal year commencing on, January 1, 2030, in an amount equal to the least of (1) 1,953,656 shares of common stock, (2) 1% of the shares of common stock outstanding on such date, and (3) an amount determined by the board of directors.

As of March 31, 2026, no offering periods have commenced under the 2020 ESPP and 488,414 shares remained available for issuance.

2024 Inducement Stock Incentive Plan

In March 2024, the Company's board of directors adopted the 2024 Inducement Stock Incentive Plan (the "2024 Inducement Plan"). The 2024 Inducement Plan provides for the grant of nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards with respect to an aggregate of 900,000 shares of Common Stock (subject to adjustment as provided in the 2024 Inducement Plan). Awards under the 2024 Inducement Plan may only be granted to new employees who were not previously an employee or director of the Company or are commencing employment with the Company following a bona fide period of non-employment, in either case, as an inducement material to the individual’s entering into employment with the Company and in accordance with the requirements of Nasdaq Stock Market Rule 5635(c)(4). In February 2026, the Company's board of directors approved an additional 2,200,000 shares for issuance under the 2024 Inducement Plan. During the three months ended March 31, 2026, the Company did not grant any inducement equity awards under the 2024 Inducement Plan.

As of March 31, 2026, 2,707,447 shares remained available for future issuance under the 2024 Inducement Plan.

Stock option valuation

To date, the Company has granted stock options that vest solely based on continued service to the Company, which it calls service-based vesting conditions, stock options that vest based on both continued service to the Company and certain market-based conditions, which it calls service- and market-based vesting conditions, and stock options that vest based on the achievement of certain pre-defined performance conditions, which it calls performance-based vesting conditions. The fair value of stock option grants is estimated using the Black-Scholes option-pricing model for stock options with service-based and performance-based vesting conditions. Stock-based compensation expense is recognized for stock option grants that vest upon satisfaction of service and/or performance conditions if it is probable that the required performance condition will be achieved. The fair value is determined based upon the quoted price of the Company’s common stock. The Company lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. 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 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 based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The fair value of stock options with service- and market-based vesting conditions is estimated using a Monte Carlo valuation method, incorporating various option pricing inputs.

Stock option activity

The intrinsic value of options exercised for the three months ended March 31, 2026 and 2025 totaled $0.4 million and $0.9 million, respectively. The weighted-average grant date fair value of the options granted during the three months ended March 31, 2026 and 2025 was $10.71 per share and $7.69 per share, respectively. As of March 31, 2026 there was $86.5 million of unrecognized compensation expense, which the Company expects to recognize over a weighted-average period of 2.8 years.

In July 2025, the Company granted stock options to purchase 591,685 shares of common stock that vest over a three-year term from the grant date contingent upon the achievement of certain market conditions. The fair value of these stock options was estimated using a Monte Carlo valuation method, incorporating various option pricing inputs. The estimated grant date fair value of $2.8 million will be recognized as expense over the three-year service period and $0.4 million was recognized as expense during the three months ended March 31, 2026.

Restricted stock units

A restricted stock unit ("RSU") represents the right to receive one share of common stock upon vesting of the RSU. The Company grants RSUs with service conditions that vest in four equal annual installments provided that the employee remains employed with the Company, RSUs with service conditions that vest in sixteen equal quarterly installments provided that the employee remains employed with the Company and RSUs with performance-based vesting conditions. As of March 31, 2026, there are no RSUs with performance-based vesting conditions outstanding. The fair value of each RSU is based on the closing price of the Company’s common stock on the date of grant. A summary of the Company’s RSU activity and related information for the three months ended March 31, 2026 is as follows:

The fair value of RSUs vested during the three months ended March 31, 2026 and 2025 totaled $2.6 million and $7.0 million, respectively. The weighted average grant date fair value of RSUs granted during the three months ended March 31, 2025 was $12.25 per share. As of March 31, 2026, there was $77.2 million of unrecognized compensation costs related to unvested RSUs, which are expected to be recognized over a weighted-average period of 3.2 years.