Stock-based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

10. Stock-based Compensation

The Company grants stock-based awards under its 2023 Stock Option and Incentive Plan (the "2023 Plan"), which was approved by the Company’s stockholders in November 2023 and became effective in November 2023 in connection with completion of the Merger. The Company also has outstanding stock option awards under the "Legacy Korro 2019 Plan", the Frequency 2014 Stock Incentive Plan (the "2014 Plan"), the 2019 Incentive Award Plan (the "Frequency 2019 Plan"), but is no longer granting awards under these plans. The Company also has the option to grant awards under the 2023 Employee Stock Purchase Plan (the "2023 ESPP"), which was approved by the Company’s stockholders in November 2023 and became effective in November 2023 in connection with completion of the Merger.

Stock-based Compensation Expense

Total stock-based compensation expense recognized in the consolidated statements of operations and comprehensive loss for the three and the six months ended June 30, 2024 and 2023 was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Research and development	$	334	$	157	$	613	$	246
General and administrative		633		244		1,219		504
Total stock-based compensation expense	$	967	$	401	$	1,832	$	750

Stock Option Activity

The fair value of stock options granted during the six months ended June 30, 2024 and 2023 was calculated on the date of grant using the following weighted-average assumptions:


	Six Months Ended June 30,
	2024			2023
Risk-free interest rate		4.3	%		3.6	%
Expected dividend yield		—	%		—	%
Expected term (in years)		6.0			6.0
Expected volatility		74.6	%		69.5	%

Using the Black-Scholes option pricing model, the weighted-average grant date fair value of stock options granted during the six months ended June 30, 2024 and 2023 was $32.46 and $13.87 per share, respectively.

The following table summarizes changes in stock option activity during the six months ended June 30, 2024 (in thousands, except per share amounts):


	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2023		1,323,151		$	23.49		8.4	$	36,310
Granted		122,766		$	47.45
Exercised		(14,138	)	$	21.95
Forfeited		(82,457	)	$	17.85
Cancelled		(50,914	)	$	119.02
Outstanding as of June 30, 2024		1,298,408		$	22.38		8.4	$	20,214
Exercisable at June 30, 2024		483,542		$	23.38		7.0	$	8,491

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the common stock as of the end of the period. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2024 and 2023 was $0.4 million and $0.1 million, respectively.

As of June 30, 2024, there was unrecognized stock-based compensation expense related to unvested stock options of $11.2 million, which the Company expects to recognize over a weighted-average period of approximately 2.9 years.