XML 23 R16.htm IDEA: XBRL DOCUMENT
v3.24.1.1.u2

Share-Based Compensation | 3 Months Ended
--- | ---
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | 8. Share-Based Compensation 2023 Stock Option and Incentive Plan The Company’s 2023 Stock Option and Incentive Plan (the “2023 Plan”), which became effective on October 30, 2023, provides for the grant of up to 5,000,000 of the Company’s ordinary shares. The 2023 Plan allows the Company to make equity-based and cash-based incentive awards such as stock options, share appreciation rights, RSUs, restricted share awards, unrestricted share awards, cash-based awards, and dividend equivalent rights to officers, employees, non-employee directors, and consultants, subject to the provisions of the 2023 Plan. Option awards must be granted with an exercise price per ordinary share at least equal to the fair value of one ordinary share on the date of grant. The term of each option award will be fixed by the 2023 Plan Administrator and may not exceed 10 years from the date of grant. Stock options granted generally vest over a four-year period, with 25% vesting on the one-year anniversary of the grant date and the remaining 75% vesting quarterly over the remaining three years, assuming continued service, and with vesting acceleration in full immediately prior to a change in control. RSUs generally vest and are settled over a four-year period, with 25% vesting and settling upon each of the first four anniversaries of the grant date. The 2023 Plan provides that the number of shares reserved and available for issuance under the 2023 Plan will be automatically increased on January 1, 2025, and each January 1 thereafter, in an amount equal to (i) 5% of the outstanding number of the Company’s ordinary shares on the immediately preceding December 31, or (ii) such lesser number of shares as determined by the 2023 Plan Administrator. The ordinary shares underlying any awards under the 2023 Plan that are forfeited, cancelled or held back upon exercise of settlement of an award to satisfy the exercise price or any tax withholding obligation, or are otherwise terminated or forfeited (other than by exercise) will be added back to the ordinary shares available for issuance under the 2023 Plan. At March 31, 2024, 430,191 ordinary shares were reserved and available for issuance under the 2023 Plan. 2023 Employee Stock Purchase Plan The Company’s 2023 Employee Stock Purchase Plan (the “ESPP”) became effective on October 30, 2023. The ESPP initially reserves and authorizes the issuance of up to a total of 100,000 of the Company’s ordinary shares to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1, 2025 and each January 1 thereafter through January 1, 2034, by the least of (i) 100,000 ordinary shares, (ii) 1% of the outstanding number of ordinary shares on the immediately preceding December 31, or (iii) such lesser number of ordinary shares as determined by the administrator of the ESPP. The number of shares reserved under the ESPP is subject to adjustment in the event of a share split, share dividend, or other change in the Company’s capitalization. 2024 Inducement Stock Option and Incentive Plan The Company’s 2024 Inducement Stock Option and Incentive Plan (the “2024 Plan”), which became effective on January 12, 2024, provides for the grant of up to 300,000 of the Company’s ordinary shares. The 2024 Plan allows the Company to make equity-based incentive awards such as non-qualified stock options, share appreciation rights, RSUs, restricted share awards, unrestricted share awards, and dividend equivalent rights to persons who (a) were not previously an employee or director of the Company or (b) are commencing employment with the Company following a bona fide period of non-employment with the Company, 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), subject to the provisions of the 2024 Plan. The 2024 Plan is administered by the Company’s Board of Directors, which may in turn delegate authority to administer the plan to a committee of the Board of Directors, referred to herein as the 2024 Plan Administrator. Subject to the terms of the 2024 Plan, the 2024 Plan Administrator has the authority to determine recipients, the number of shares subject to awards to be granted, the type of award, and the terms and conditions of the awards, including the exercise period and vesting terms. The fair market value of the shares on any given date is determined in good faith by the 2024 Plan Administrator; provided, however, that if the shares are listed on a national securities exchange or traded on any established market, the determination is made by reference to the closing price on such date. If there is no closing price for such date, the determination is made by reference to the last date preceding such date for which there is a closing price. Option awards must be granted with an exercise price per ordinary share at least equal to the fair value of one ordinary share on the date of grant. The term of each option award will be fixed by the 2024 Plan Administrator and may not exceed 10 years from the date of grant. Stock options granted generally vest over a four-year period, with 25% vesting on the one-year anniversary of the grant date and the remaining 75% vesting quarterly over the remaining three years, assuming continued service, and with vesting acceleration in full immediately prior to a change in control. RSUs generally vest and are settled over a four-year period, with 25% vesting and settling upon each of the first four anniversaries of the grant date. The ordinary shares underlying any awards under the 2024 Plan that are forfeited, cancelled or held back upon exercise of settlement of an award to satisfy the exercise price or any tax withholding obligation, or are otherwise terminated or forfeited (other than by exercise) will be added back to the ordinary shares available for issuance under the 2024 Plan. At March 31, 2024, 279,000 ordinary shares were reserved and available for issuance under the 2024 Plan. Converted Awards On November 13, 2023, the Company entered into the employee matters agreement with the Former Parent under which the Company agreed to convert all outstanding Former Parent stock options and RSUs held by the Company’s employees under the Former Parent’s share-based compensation plans into the Company stock options and RSUs under the 2023 Plan in accordance with the conversion ratio set forth in the agreement. On December 14, 2023, the Former Parent and the Company amended the employee matters agreement to adjust the conversion ratio used to calculate the number of the Company’s RSUs issuable to each employee in exchange for each RSU of the Former Parent. All outstanding equity awards held by the Company’s employees were converted and issued under the 2023 Plan in December 2023 in accordance with the amended employee matters agreement. Except for the number of underlying shares and the exercise price of the stock options, the converted awards retain substantially the same terms and conditions of the original awards, including their term and vesting conditions. Former Parent Share-based Compensation Plans The Former Parent had share-based compensation plans which provided for granting equity awards, including non-qualified and incentive stock options, RSUs, RSU awards, cash-based awards, and performance shares to employees, officers and directors of, and consultants to, the Former Parent. Prior to the Separation, all share-based compensation plans were managed on a consolidated basis by the Former Parent and share-based compensation expense was allocated to the Company related to stock options, time-based RSU awards and performance-based RSU awards issued by the Former Parent. Accordingly, the amounts presented for periods prior to the Separation are not necessarily indicative of future share-based compensation and do not necessarily reflect the amount that the Company would have issued as an independent company for the periods presented. Stock Plan Activity The following average assumptions were used to estimate the fair value of stock options granted by the Company three months ended March 31, 2024 using the Black-Scholes option pricing model:
|  | Three Months Ended March 31, 2024 |
Risk-free interest rate |  |  | 4.1 | %
Dividend rate |  |  | 0 | %
Expected volatility |  |  | 87.4 | %
Expected life (years) |  |  | 6.2 |
A summary of stock option activity under the 2023 Plan and the 2024 Plan for the three months ended March 31, 2024 is as follows:
|  | Number of Options |  |  | Weighted-Average Exercise Price |
Options outstanding at December 31, 2023 |  |  | 3,348,715 |  |  | $ | 4.53 |
Granted |  |  | 359,874 |  |  | $ | 5.37 |
Cancelled/forfeited |  |  | (338,687 | ) |  | $ | 4.64 |
Options outstanding at March 31, 2024 |  |  | 3,369,902 |  |  | $ | 4.61 |
Options exercisable at March 31, 2024 |  |  | 1,355,800 |  |  | $ | 4.65 |
The weighted average grant date fair value of stock options granted during the three months ended March 31, 2024 was $4.05. At March 31, 2024, there were 3.1 million stock options vested or expected to vest, with a weighted average exercise price of $4.61 per share, a weighted average contractual remaining life of 6.8 years and an aggregate intrinsic value of $1.8 million. At March 31, 2024, the aggregate intrinsic value of stock options exercisable was $0.8 million with a weighted average remaining contractual term of 4.7 years. The number of stock options expected to vest was determined by applying the pre-vesting forfeiture rate to the total number of outstanding options. The intrinsic value of a stock option is the amount by which the market value of the underlying shares exceeds the exercise price of the stock option. At March 31, 2024, there was $4.4 million of unrecognized share-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period of 1.9 years. A summary of RSU activity under the 2023 Plan and the 2024 Plan for the three months ended March 31, 2024 is as follows:
|  | Number of Shares |  |  | Weighted-Average Grant Date Fair Value Per Share |
Unvested outstanding at December 31, 2023 |  |  | 1,129,512 |  |  | $ | 4.45 |
Granted |  |  | 193,776 |  |  | $ | 5.34 |
Vested |  |  | (232,810 | ) |  | $ | 4.32 |
Cancelled/forfeited |  |  | (102,381 | ) |  | $ | 4.70 |
Unvested outstanding at March 31, 2024 |  |  | 988,097 |  |  | $ | 4.63 |
At March 31, 2024, there was $3.2 million of unrecognized share-based compensation expense related to unvested RSUs, which will be recognized over a weighted average remaining contractual term of 1.8 years. The following table represents share-based compensation expense included in the Company’s unaudited condensed consolidated statements of operations and comprehensive loss:
|  | Three Months Ended March 31, |
(in thousands) |  | 2024 |  |  | 2023 |
Research and development |  | $ | 1,066 |  |  | $ | 2,222 |
General and administrative |  |  | 1,133 |  |  |  | 531 |
Total share-based compensation expense |  | $ | 2,199 |  |  | $ | 2,753 |

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480429/718-10-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//718/tableOfContent Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480429/718-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480429/718-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2)(i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480429/718-10-50-2 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (l) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480429/718-10-50-2 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration