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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | 8. Stock-Based Compensation Equity Plans The Company inherited the 2017 Equity Incentive Plan (the "2017 Plan") as part of its merger with Tocagen, Inc. in June 2020. The 2017 Plan was terminated in May 2021 and replaced by the 2021 Equity Incentive Plan (the “2021 Plan”). The 2017 Plan will continue to govern outstanding awards issued under the 2017 Plan. The 2021 Plan, as amended and restated most recently in August 2024, has an aggregate of 340,000 authorized shares. The 2021 Plan provides for the grant of incentive stock options (“ISOs”), non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, other forms of equity compensation and performance cash awards. ISOs may be granted only to employees. All other awards may be granted to employees, including officers, and to non-employee directors and consultants of the Company and its affiliates. Service-based awards generally vested over a four-year period, with the first 25% of such awards vesting following twelve months of continued employment or service with the remaining awards vesting monthly in equal installments over the following thirty-six months. For certain service-based awards to the board of directors, vesting occurs in thirty-six equal monthly installments over a three-year period for initial grants and in twelve equal monthly installments over a twelve-month period for subsequent grants. As of December 31, 2024, there were 129,508 shares available for issuance under the 2021 Plan. On July 26, 2020, the Company adopted the 2020 Inducement Equity Incentive Plan (the “2020 Inducement Plan”) and reserved 20,000 shares for future grant under the 2020 Inducement Plan. The 2020 Inducement Plan was amended on March 14, 2024 to increase the shares available for grant by an additional 60,000. As of December 31, 2024, there were 70,200 shares available for issuance under the 2020 Inducement Plan. Stock Options The risk-free interest rate assumption for stock options is based on the U.S. Treasury yield curve rate at the date of grant with a maturity approximating the expected term of the option. All option awards generally expire ten years from the date of grant. The expected term assumption for options granted to employees is determined using the simplified method that represents the average of the contractual term of the option and the weighted average vesting period of the option. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate expected term. Due to the Company’s limited trading of its common stock, it does not have the relevant company-specific historical data to support its expected volatility. As such, the Company utilized a weighted approach by blending its own historical price data with the historical volatility of a group of similar companies in the life sciences industry whose shares are publicly traded. The Company selected the peer group based on comparable characteristics, including development stage, product pipeline, and market capitalization. The Company computes historical volatility data using the daily closing prices during the equivalent period of the calculated expected term of the stock-based awards. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The fair value per share of common stock is the closing stock price on the option grant date. The weighted average grant-date fair value of stock options granted in the years ended December 31, 2024 and 2023 was $14.25 and $16.41, respectively. The weighted-average assumptions used to value these stock options using the Black-Scholes option-pricing model were as follows.
|  | Year ended December 31, 2024 |  |  | Year Ended December 31, 2023 |
Fair value of common stock |  | $ | 16.88 |  |  | $ | 19.61 |
Risk-free interest rate |  |  | 4.08 | % |  |  | 4.30 | %
Dividend yield |  |  | 0.00 | % |  |  | 0.00 | %
Expected term of options (years) |  |  | 5.98 |  |  |  | 5.62 |
Volatility |  |  | 110.15 | % |  |  | 114.50 | %
The table below summarizes the stock option activity during the year ended December 31, 2024:
|  | Number of Shares Outstanding |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value (in thousands) |
Balances at December 31, 2023 |  |  | 105,791 |  |  | $ | 206.47 |  |  | 7.17 |  |  | $ | 30 |
Granted |  |  | 123,600 |  |  | $ | 16.92 |  |  |  | — |  |  |  | — |
Exercised |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Cancelled/Forfeited |  |  | (16,890 | ) |  | $ | 114.74 |  |  |  | — |  |  |  | — |
Balances at December 31, 2024 |  |  | 212,501 |  |  | $ | 103.51 |  |  | 7.82 |  |  | $ | 760 |
Vested and expected to vest at December 31, 2024 |  |  | 212,501 |  |  | $ | 103.51 |  |  | 7.82 |  |  | $ | 760 |
Exercisable at December 31, 2024 |  |  | 68,703 |  |  | $ | 265.62 |  |  | 6.49 |  |  | $ | 113 |
The aggregate intrinsic value of stock options as of December 31, 2024 is based on the Company’s closing stock price of $22.71 per share. Restricted Stock Unit Awards Restricted stock units vest over four years with one sixteenth of the restricted stock units vesting every quarter. Restricted stock unit award transactions during the year ended December 31, 2024 were as follows:
|  |  |  |  | Weighted Avg |
|  |  |  |  | Grant Date |
|  | Shares |  |  | Fair Value |
Outstanding at December 31, 2023 |  |  | 42,237 |  |  | $ |  | 34.22 |
Granted |  |  | — |  |  | $ |  | — |
Forfeited/Cancelled |  |  | (3,600 | ) |  | $ |  | 25.75 |
Issued as Common Stock |  |  | (10,100 | ) |  | $ |  | 25.13 |
Outstanding at December 31, 2024 |  |  | 28,537 |  |  | $ |  | 38.50 |
The aggregate fair value of RSUs vested during the year ended December 31, 2024 was $146 thousand. 2017 Employee Stock Purchase Plan In May 2021, the Company’s board of directors reactivated the Company’s 2017 Employee Stock Purchase Plan (“ESPP”) which had previously been suspended. The ESPP allows eligible employees to withhold up to 15% of their earnings to purchase shares of the Company’s common stock at a price per share equal to the lower of (i) 85% of the fair market value of a share of the Company’s common stock on the first date of an offering or (ii) 85% of the fair market value of a share of the Company’s common stock on the date of purchase. The Company had 31,483 shares available for future issuance under the ESPP as of December 31, 2024. The number of shares of common stock reserved for issuance will automatically increase on January 1 of each calendar year through January 1, 2027, by the lesser of (a) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, (b) 12,000 shares, or (c) a number determined by the Company’s board of directors that is less than (a) and (b). The Company issued 958 and 700 shares under the ESPP during the year ended December 31, 2024 and 2023, respectively. The ESPP is considered a compensatory plan. The Company recorded stock-based compensation expense related to its ESPP of $8 thousand and $12 thousand for the years ended December 31, 2024 and 2023, respectively. The fair value of the rights granted to employees under the ESPP was estimated using a Black-Scholes option-pricing model with the following weighted-average valuation assumptions:
|  | Year ended December 31, 2024 |  |  | Year Ended December 31, 2023 |
Fair value of common stock |  | $ | 16.34 |  |  | $ | 26.17 |
Risk-free interest rate |  |  | 5.32 | % |  |  | 5.20 | %
Dividend yield |  |  | 0.00 | % |  |  | 0.00 | %
Expected term of options (years) |  |  | 0.50 |  |  |  | 0.50 |
Volatility |  |  | 72.58 | % |  |  | 119.32 | %
Stock-Based Compensation Expense Stock-based compensation expenses included in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023 are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Research and development |  | $ | 1,075 |  |  | $ | 1,201 |
General and administrative |  |  | 2,020 |  |  |  | 2,083 |
Total |  | $ | 3,095 |  |  | $ | 3,284 |
As of December 31, 2024, there was unrecognized stock-based compensation expense of $2.6 million related to stock options and restricted stock units with service conditions, which is expected to be recognized over a weighted-average period of 2.72 years. Total unrecognized stock-based compensation as of December 31, 2024 was approximately $0.5 million related to restricted stock units with performance based vesting. The performance based conditions are tied to development milestones which have not been met.

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