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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
SHARE-BASED COMPENSATION | NOTE 3: SHARE-BASED COMPENSATION The Company previously granted stock options under its 2015 Stock Incentive Plan (the “2015 Plan”). As of December 31, 2024 there were 29,935 stock options outstanding under the 2015 Plan and no remaining stock options available to be granted under the 2015 Plan. On March 12, 2019, the Company’s board of directors adopted, and, on March 14, 2019 the Company’s stockholders approved, the Precision BioSciences, Inc. 2019 Incentive Award Plan (“2019 Plan”) and the 2019 Employee Stock Purchase Plan (“2019 ESPP”), both of which became effective on March 27, 2019. On April 24, 2024, the Company’s board of directors adopted, and on June 4, 2024, the Company’s stockholders approved, the amendment and restatement of the Precision BioSciences, Inc. 2019 Incentive Award Plan (as amended and restated, the “2019 Plan”). The 2019 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other share-based awards. The 2019 Plan had 180,190 stock options and 970,278 restricted stock units (“RSUs”) outstanding as of December 31, 2024. The number of shares available for issuance under the 2019 Plan initially equaled 158,333 shares of common stock. The 2019 Plan provides for an annual increase to the number of shares of common stock available for issuance on the first day of each calendar year beginning January 1, 2020 and ending on and including January 1, 2029 by an amount equal to the lesser of (i) 4% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as determined by the board of directors. As of December 31, 2024, the aggregate number of shares available for issuance under the 2019 Plan has been increased by 534,177 pursuant to this provision. A dditionally, the number of shares available for issuance under the plan was increased by an additional 630,000 shares in connection with the amendment and restatement of the 2019 Plan approved at the Company’s annual meeting of stockholders on June 4, 2024. Any shares that are subject to awards outstanding under the Company’s 2006 Plan and 2015 Plan as of the effective date of the 2019 Plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased, or canceled without having been fully exercised or forfeited, to the extent so unused, will become available for award grants under the 2019 Plan. As of December 31, 2024, 99,638 shares were available to be issued under the 2019 Plan. Up to 17,500 shares of the Company’s common stock were initially reserved for issuance under the 2019 ESPP. The 2019 ESPP provides for an annual increase to the number of shares available for issuance on the first day of each calendar year beginning January 1, 2020 and ending on and including January 1, 2029 by an amount equal to the lesser of (i) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by our board of directors. As of December 31, 2024, the aggregate number of shares available for issuance under the 2019 ESPP has been increased by 133,543 shares pursuant to this provision. T he purchase price of the shares under the 2019 ESPP, in the absence of a contrary designation, will be 85% of the lower of the fair market value of our common stock on the first trading day of the offering period or on the purchase date. As of December 31, 2024, we had issued 56,911 shares under the 2019 ESPP. As of December 31, 2024, 94,132 shares were available to be issued under the 2019 ESPP. The Company recognized share-based compensation expense related to the ESPP of $0.1 million during the years ended December 31, 2024 and 2023. On August 9, 2021, the Company’s board of directors approved the adoption of the Precision BioSciences, Inc. 2021 Employment Inducement Incentive Award Plan (as amended, the “Inducement Award Plan”). The Inducement Award Plan provides for the grant of non-qualified stock options, stock appreciation rights, restricted stock, RSUs and other share-based awards to newly hired employees who have not previously been an employee or member of the board, or an employee who is being rehired following a bona fide period of non-employment by the Company. No more than 500,000 shares of the Company’s common stock may be issued under the Inducement Award Plan. As of December 31, 2024, 320,878 shares were available to be issued under the Inducement Award Plan. The Inducement Award Plan had 166,426 stock options and 5,242 RSUs outstanding as of December 31, 2024. The Company recorded employee and nonemployee share-based compensation expense as follows (in thousands):
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |
Employee |  | $ | 11,023 |  |  | $ | 12,364 |
Nonemployee |  |  | 1,581 |  |  |  | 1,676 |
|  | $ | 12,604 |  |  | $ | 14,040 |
Share-based compensation expense is included in the following line items in the statements of operations (in thousands):
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |
Research and development |  | $ | 2,560 |  |  | $ | 4,355 |
General and administrative |  |  | 10,044 |  |  |  | 9,685 |
|  | $ | 12,604 |  |  | $ | 14,040 |
Determining the appropriate fair value model to measure the fair value of the stock option grants on the date of grant and the related assumptions requires judgment. The fair value of each stock option grant is estimated using a Black-Scholes option-pricing model on the date of grant using the following inputs:
|  | Years Ended December 31, |
|  | 2024 |  |  | 2023 |
Estimated dividend yield |  |  | 0.00 | % |  |  | 0.00 | %
Weighted-average expected stock price volatility |  |  | 87.93 | % |  |  | 87.15 | %
Weighted-average risk-free interest rate |  |  | 3.67 | % |  |  | 3.89 | %
Expected term of options (in years) |  |  | 5.63 |  |  |  | 5.78 |
Weighted-average fair value per option |  | $ | 10.58 |  |  | $ | 17.41 |
The expected volatility rates are estimated based on the actual volatility of a peer group comprising the Company and other comparable public companies over the expected term. The expected term represents the average time that stock options are expected to be outstanding. The Company does not have sufficient history of exercising stock options to estimate the expected term of employee stock options and thus utilizes a weighted value considering actual history and estimated expected term based on the midpoint of final vest date and expiration date. The risk-free rate is based on the United States Treasury yield curve at the time of grant for the expected term of the option. The following table summarizes activity in the Company’s stock option plans for the years ended December 31, 2023 and December 31, 2024 :
|  | Outstanding Option Shares |  |  | Weighted- Average Exercise Price |
Balance as of December 31, 2022 |  |  | 457,097 |  |  |  | 191.07 |
Granted |  |  | 20,443 |  |  |  | 23.61 |
Exercised |  |  | (3,196 | ) |  |  | 9.59 |
Forfeited/canceled |  |  | (124,683 | ) |  |  | 221.38 |
Balance as of December 31, 2023 |  |  | 349,662 |  |  |  | 172.13 |
Granted |  |  | 85,034 |  |  |  | 10.58 |
Exercised |  |  | — |  |  |  | — |
Forfeited/canceled |  |  | (58,145 | ) |  |  | 166.04 |
Balance as of December 31, 2024 |  |  | 376,551 |  |  |  | 136.59 |
The intrinsic value of stock options exercised was $0 for the year ended December 31, 2024 as no stock options were exercised during the period. For December 31, 2023, the intrinsic value of stock options exercised was less than $0.1 million. During the year ended December 31, 2024, the Company granted 881,233 RSUs with a grant date fair value of $9.1 million. The fair value of the RSUs will be recognized as expense over the requisite vesting period. The following table summarizes the Company’s RSU activity for the years ended December 31, 2024 and December 31, 2023:
|  | RSU Awards |  |  | Weighted-Average Grant Date Fair Value |
Unvested RSUs as of December 31, 2022 |  |  | 120,550 |  |  |  | 106.49 |
Granted |  |  | 161,161 |  |  |  | 34.49 |
Forfeited |  |  | (19,961 | ) |  |  | 109.19 |
Vested |  |  | (46,893 | ) |  |  | 112.02 |
Unvested RSUs as of December 31, 2023 |  |  | 214,857 |  |  |  | 51.03 |
Granted |  |  | 881,233 |  |  |  | 10.33 |
Forfeited |  |  | (18,438 | ) |  |  | 23.04 |
Vested |  |  | (102,132 | ) |  |  | 55.51 |
Unvested RSUs as of December 31, 2024 |  |  | 975,520 |  |  |  | 14.32 |
There was approximately $12.7 million of total unrecognized compensation cost related to unvested stock options and RSUs as of December 31, 2024, which is expected to be recognized over a weighted-average period of 1.6 years. The following table summarizes certain information about stock options granted under the stock option plans which are vested or expected to vest as of December 31, 2024 and December 31, 2023.
Years Ended December 31, |  |  |  | Number of Options |  |  | Weighted- Average Remaining Contractual Life (in years) |  |  | Weighted- Average Exercise Price |
2024 |  | Expected to be exercisable |  |  | 376,551 |  |  |  | 7.10 |  |  | $ | 136.59 |
2024 |  | Currently exercisable |  |  | 248,617 |  |  |  | 6.31 |  |  | $ | 178.27 |
2023 |  | Expected to be exercisable |  |  | 349,662 |  |  |  | 7.15 |  |  | $ | 172.13 |
2023 |  | Currently exercisable |  |  | 223,019 |  |  |  | 6.58 |  |  | $ | 199.00 |
The following table summarizes certain information about stock options outstanding under the stock option plans for the years ended December 31, 2024 and December 31, 2023, respectively:
Year Ended December 31, 2024 |
Exercise price |  | Number of Options Outstanding |  |  | Weighted- Average Remaining Life |  |  | Number of Options Exercisable |
$10.33 - $46.50 |  |  | 130,872 |  |  |  | 8.40 |  |  |  | 41,626 |
$50.40 - $100.20 |  |  | 77,207 |  |  |  | 7.35 |  |  |  | 61,168 |
$122.40 - $174.90 |  |  | 50,056 |  |  |  | 6.87 |  |  |  | 37,295 |
$189.30 - $293.70 |  |  | 60,916 |  |  |  | 6.20 |  |  |  | 53,729 |
$305.10 - $480.00 |  |  | 57,500 |  |  |  | 4.97 |  |  |  | 54,799 |
|  |  | 376,551 |  |  |  |  |  |  | 248,617 |
Year Ended December 31, 2023 |
Exercise price |  | Number of Options Outstanding |  |  | Weighted- Average Remaining Life |  |  | Number of Options Exercisable |
$12.30 - $46.50 |  |  | 67,401 |  |  |  | 7.65 |  |  |  | 27,084 |
$50.40 - $100.20 |  |  | 77,327 |  |  |  | 8.34 |  |  |  | 49,906 |
$122.40 - $174.90 |  |  | 64,477 |  |  |  | 7.35 |  |  |  | 35,163 |
$189.30 - $293.70 |  |  | 65,372 |  |  |  | 7.10 |  |  |  | 46,526 |
$305.10 - $480.00 |  |  | 75,085 |  |  |  | 5.33 |  |  |  | 64,340 |
|  |  | 349,662 |  |  |  |  |  |  | 223,019 |

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