The Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair value.

The fair value of stock options is determined using the Black-Scholes option pricing model, using assumptions which are subjective and require significant judgment and estimation by management. The risk-free rate assumption was based on observed yields from governmental zero-coupon bonds with an equivalent term. The expected volatility assumption was based on historical volatilities of a group of comparable industry companies whose share prices are publicly available. The peer group was developed based on companies in the pharmaceutical industry. The expected term of stock options represents the weighted-average period that the stock options are expected to be outstanding. Because the Company does not have historical exercise behavior, the Company determined the expected life assumption using the simplified method for stock options granted to employees, which is an average of the options ordinary vesting period and the contractual term. For stock options granted to the Company’s board of directors (the “Board”), the Company determined the expected life assumption using the simplified method as the starting point with an average period of 12 months added to take into account the extended range of time of 12 to 18 months that vested stock options granted to Board members may be exercised upon termination. The expected dividend assumption was based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not expect to pay dividends at any time in the foreseeable future. The Company recognizes forfeitures on an actual basis and as such did not estimate forfeitures to calculate stock-based compensation.

Restricted Stock Units (“RSUs”) are measured and recognized based on the quoted market price of our common stock on the date of grant.

On July 10, 2024, the Company held its Annual Meeting of Stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved an amendment to the Company's 2020 Long Term Incentive Plan (the “2020 Plan”). The 2020 Plan, as amended, (i) reflects an increase in the limit on the aggregate number of shares of the Company’s common stock that may be delivered pursuant to all awards granted under the 2020 Incentive Plan by an additional 3,500,000 shares so that the new aggregate share limit under the 2020 Plan is 17,960,000 shares, and (ii) extends the date through which the Company may grant new awards under the 2020 Plan from November 15, 2030 to April 28, 2034.

On May 1, 2023, the Company issued stock option awards to its employees with both time-based and performance-based vesting requirements, totaling 7,381,857 stock options, with 1,476,372 of the granted stock options subject to the Company’s customary time-based vesting schedule. The remaining 5,905,485 stock options granted are subject to both customary time-based vesting requirements and performance-based vesting requirements that are based on the same clinical development milestones applicable to the Second Closing and Third Closing of the 2023 Private Placement as specified in the 2023 Securities Purchase Agreement.

In December 2023, the Company amended the performance-based vesting requirements with its named executive officers and other employees that upon the Second Closing and Third Closing, a full or prorated amount of each closing installment shall vest based on the percentage of funding received relative to the total funding opportunity represented by the investors’ Second Closing and Third Closing subscription amounts. On June 13, 2024 and November 20, 2024, the performance-based vesting requirement based on the milestones applicable to the Second Closing and Third Closing were satisfied and 5,763,085 stock options were issued.

The 2014 Stock Incentive Plan (the “2014 Plan”) was closed to new grants following the approval of the 2020 Plan, and therefore, there were no shares reserved for issuance under the 2014 Plan as of December 31, 2024. The number of shares reserved for issuance under the 2020 Plan and Employee Stock Purchase Plan was 6,373,242 and 24,077 shares, respectively, as of December 31, 2024.

The following table summarizes all option activity under the 2014 Plan, 2020 Plan and inducement grants:


	Shares Issuable Under Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (in thousands)
						(In years)
Outstanding as of January 1, 2023		5,218,033		$	8.69		8.1	$	—
Granted		11,026,451			2.10
Forfeited / Canceled		(862,631	)		8.07
Outstanding as of December 31, 2023		15,381,853		$	4.21		8.9	$	235
Granted		622,000			2.22
Exercised		(50,000	)		2.30
Forfeited / Canceled		(316,465	)		7.29
Outstanding as of December 31, 2024		15,637,388		$	4.02		7.5	$	20,628
Options vested and expected to vest as of December 31, 2024		15,637,388		$	4.02		7.5	$	20,628
Options exercisable as of December 31, 2024		8,667,177		$	5.37		6.8	$	7,898

Intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the common stock for the options that had exercise prices that were lower than the fair value per share of the common stock on the date of exercise. The aggregate intrinsic value of options exercised during the year ended December 31, 2024 was $0.1 million.

The Company estimates the fair value of stock option awards on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:


	Year Ended December 31,
	2024	2023

Expected stock price volatility	101.3%	90.5%
Risk-free interest rate	4.2%	3.7%
Expected life of options (in years)	6.9	6.1
Estimated dividend yield	—%	—%

The per share weighted average grant date fair value of stock options granted during the years ended December 31, 2024 and 2023 was $1.93 and $1.60, respectively.

The following table shows the RSU activity, as follows:


	Shares Issuable Under RSUs			Weighted Average Grant Date Fair Value
				(In years)
Outstanding as of January 1, 2023		15,000		$	2.47
Granted		—			—
RSUs Vested		(15,000	)		2.47
Forfeited / Canceled		—			—
Outstanding as of December 31, 2023		—		$	—
Granted		46,000			1.97
RSUs Vested		—			—
Forfeited / Canceled		—			—
Outstanding as of December 31, 2024		46,000		$	1.97

Total compensation expense related to all of the Company’s stock-based awards for the years ended December 31, 2024 and 2023 was comprised of the following (in thousands):


	Year Ended December 31,
	2024		2023
Stock-based compensation classified as:
Research and development expense	$	4,277	$	1,491
General and administrative expense		8,845		5,054
Total stock-based compensation expense	$	13,122	$	6,545

As of December 31, 2024, total unrecognized stock-based compensation expense related to non-vested equity awards was $17.6 million, which is expected to be recognized over an estimated weighted-average period of 2.4 years.