The Company operates various share based incentive plans for its staff and issues ordinary shares or ADSs when share-based awards are exercised.

The Company records share-based compensation expense related to share options and RSUs granted to employees and directors. The expense is included in Research and development and Selling, general and administrative costs, based on the nature of individual employees’ functions, and represents the relevant year's allocation of the expense. The costs of share-based compensation to employees are recognized in the Consolidated Statements of Operations and Comprehensive Loss, together with a corresponding increase in equity over the vesting period.

Options are issued with an exercise price of the closing market price on the day before the grant and generally vest over a period of one to four years and the contractual life of all options is ten years.

The following table shows the allocation of share-based compensation between research and development and selling, general and administrative costs (in thousands):


	December 31,
	2023		2022
Research and development	$	4,228	$	5,420
Selling, general and administrative	14,784		8,701
Total share-based compensation	$	19,012	$	14,121

The EMI Option Plan and the Pre-IPO Option Plan were adopted by our board of directors on September 18, 2006, and July 24, 2012, respectively. The total number of shares that may be issued under these plans is the current number of outstanding options over 114,000 ordinary shares, or 14,250 ADSs, for the EMI Option Plan and 1,320,000 ordinary shares, or 165,000 ADSs, for the Pre-IPO Option Plan.

No further awards have been granted under either plan since the 2017 Incentive Award Plan was adopted, and no further awards will be granted under them.

The 2017 Incentive Award Plan was adopted by our board of directors and became effective on April 26, 2017, in order to grant share based compensation to certain of the Company’s directors and employees. It provides for the grant of stock options, RSUs, and other share-based awards to Company’s directors, officers, employees and non-employee directors.

The number of options, the weighted average grant date fair value per stock option, and the weighted average exercise price are all shown below on a per ordinary shares basis. The Company’s ADSs that are listed on the Nasdaq Global Market each represent eight ordinary shares.


	Number of share options	Weighted average exercise price (1)		Weighted average remaining contractual term (years)	Aggregate intrinsic value (thousands)
Outstanding at January 1, 2022	12,695,200	$	1.38	6.5
Granted	9,024,000	0.90
Forfeited	(620,016)	1.04

Exercised	(1,822,688)	0.75
Outstanding at December 31, 2022	19,276,496	$	1.22	7.2	$	39,412
Granted	7,376,000	2.46
Forfeited	(464,680)	0.89
Expired	(240,000)	3.07
Exercised	(1,258,192)	1.55
Outstanding at December 31, 2023	24,689,624	$	1.56	7.4	$	24,022
Exercisable at December 31, 2023	12,904,640	$	1.30	5.8	$	15,574

(1) The exercise prices relate to the equivalent price for an ordinary share, calculated as one eighth of the ADS price.

The following summarizes the aggregate intrinsic value and cash receipts related to stock option exercise activity for the years ended December 31:


($ in thousands)	2023		2022
Aggregate intrinsic value of stock options exercised	$	1,861	$	2,413
Cash receipts from stock options exercised	$	1,949	$	1,372

The total fair values of the options, estimated using the Black-Scholes option-pricing model for equity-settled compensation, amounted to $13.2 million for options granted in the year ended December 31, 2023 and $5.9 million for instruments granted in the year ended December 31, 2022. The cost is amortized over the vesting period of the options on a straight-line basis using the graded-vesting method. The following assumptions were used for the Black-Scholes valuation of share options granted in 2023 and 2022.

Volatility is calculated using historical daily averages of the Company's share price over a period that is in line with the expected life of the options.

Prior to delisting from the AIM in October 2020, the fair value of ordinary shares was based on the closing share price of the Company’s shares on AIM on the evening before the date of grant. Subsequently, the fair value has been based on the closing price of ADSs traded on Nasdaq on the evening before the date of grant.

The risk-free interest rate has been based on U.K. Government debt yield for the relevant term at the time of grant up until October 20, 2020 when the company delisted from AIM. After this, appropriate U.S Treasury yield rates were used.

As the Company does not have sufficient history to estimate its expected term, the Company applied the simplified method of estimating the expected term of the options, as described in the SEC’s Staff Accounting Bulletins 107 and

110. The expected term, calculated under the simplified method, is applied to all stock options which have similar contractual terms. Using this method, the expected term is determined using the average of the vesting period and the contractual life of the stock options granted.

A summary of the weighted-average assumptions applicable to the share options granted in the applicable years is as follows:


	December 31,
	2023		2022
Risk-free interest rate	3.40% - 4.69%		2.09% - 4.20%
Expected lives, years	5-7		5-7
Expected volatility	80.64% - 87.26%		82.50% - 84.27%
Expected dividend yield	—	%	—	%
Grant date fair value (per share)	$1.69 - $3.27		$0.34 - $1.33


	Number of RSUs	Weighted average grant date fair value		Weighted average remaining contractual term (years)
Outstanding at January 1, 2022	38,347,352	$	0.97	1.2
Granted	12,877,864	1.07
Forfeited	(1,006,264)	1.03
Vested	(15,676,608)	0.96
Outstanding at December 31, 2022	34,542,344	$	1.01	1.2
Granted	3,596,872	1.66
Forfeited	(303,648)	1.10
Vested	(18,332,944)	0.99
Outstanding at December 31, 2023	19,502,624	$	1.14	1.2

The intrinsic value of RSUs that vested in the years ended December 31, 2023 and 2022, was $41.5 million and $14.3 million, respectively.

As of December 31, 2023, total compensation cost related to share options and RSUs granted but not yet recognized was $20.0 million. This cost will be amortized to expense over a weighted average remaining period of 1.9 years and will be adjusted for subsequent forfeitures.

The Company began issuing PRSUs during 2023. PRSUs will begin to vest upon achievement of certain performance goals and are subject to continued service. The fair value of PRSUs will be recognized over the remaining service period using the graded-vesting method once the performance conditions are determined to be probable of occurring. Due to the presence of the performance conditions, which are not yet considered probable under the applicable accounting framework, the Company recognized no compensation expense for the PRSUs in 2023.


	Number of PRSUs	Weighted average grant date fair value		Aggregate Intrinsic Value (thousands)
Outstanding at January 1, 2023	—	$	—
Granted	10,790,144	1.66
Forfeited	(60,000)	1.66
Outstanding at December 31, 2023	10,730,144	$	1.66	$	26,665