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Equity Incentive Plans

9 Months Ended

Sep. 30, 2024

Equity Incentive Plans

Equity Incentive Plans

8. Equity Incentive Plans

Equity Incentive Plans

On January 20, 2017, the Company’s stockholders approved the 2016 Equity Incentive Plan (the “2016 Plan”). Beginning on January 1, 2018, the number of shares of common stock authorized for issuance pursuant to the 2016 Plan was increased each January 1 by an amount equal to 4% of the Company’s outstanding common stock as of the end of the immediately preceding calendar year or such lesser amount as determined by the compensation committee of the Company’s Board of Directors.

On June 16, 2022, the Company’s stockholders approved the 2022 Equity Incentive Plan (the “2022 Plan”), which provides for a total of 750,000 new shares of the Company’s common stock to be granted. In addition, on June 16, 2023, and July 2, 2024, stockholders approved new shares of the Company’s common stock to be added to the 2022 Plan for future issuance of 2,250,000 and 2,000,000, respectively.

As of September 30, 2024, there were 2,573,313 shares available for grant under the Company’s equity incentive plans.

A summary of stock option activity under the Equity Plans is as follows:


					Weighted
					Average		Weighted			Aggregate
					Exercise Price		Average Remaining			Intrinsic
		Options			Per Share		Life in Years			Value
Outstanding at December 31, 2023		3,384,366		$	13.97		8.40		$	3,431
Granted		1,727,500		$	2.67
Exercised		(10,557)		$	2.77
Forfeited		(254,674)		$	5.69
Outstanding at September 30, 2024		4,846,635		$	10.40		8.24		$	527
Options exercisable at September 30, 2024		2,396,563		$	17.90		7.40
Options vested and expected to vest at September 30, 2024		4,846,635		$	10.40		8.24		$	527

The grant date fair value of the options granted during the nine months ended September 30, 2024 and 2023 was estimated at the date of grant using the Black-Scholes option valuation model. The expected life was estimated using the “simplified” method as defined by the SEC’s Staff Accounting Bulletin 107, Share-Based Payment. The expected volatility was based on the historical volatility of the Company. The risk-free interest rate was based on the continuous rates provided by the U.S. Treasury with a term approximating the expected life of the option. The expected dividend yield was 0% because the Company does not expect to pay any

dividends for the foreseeable future. The Company elected the straight-line attribution method in recognizing the grant date fair value of options issued over the requisite service periods of the awards, which are generally the vesting periods.

The weighted average grant date fair value for the stock options granted during the nine months ended September 30, 2024 and 2023 was $2.12 and $2.09 per share, respectively.

The assumptions that the Company used to determine the grant-date fair value of stock options granted to employees and directors during the nine months ended September 30, 2024 and 2023 were as follows, presented on a weighted average basis:


		Nine Months Ended September 30,
		2024		2023

Expected volatility		92.99	%	90.37	%
Weighted average risk-free interest rate		3.98	%	4.05	%
Expected dividend yield		0.00	%	0.00	%
Expected term (in years)		6.46		6.48

Stock options generally vest over a three or four year period, as determined by the compensation committee of the Board of Directors at the time of grant. The options expire 10 years from the grant date. As of September 30, 2024, there was approximately $5,633 of unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a remaining weighted-average period of approximately 1.93 years.

Restricted Stock Units (“RSUs”)

The Company did not grant any RSUs during the nine months ended September 30, 2024 and 2023.

The following table presents RSU activity under the 2016 Plan during the nine months ended September 30, 2024:


				Weighted
				Average Grant
		Number of Shares		Date Fair Value
Outstanding at December 31, 2023		262,500		$	19.97
Vested		(27,500)		$	25.70
Forfeited		(7,500)		$	19.40
Outstanding at September 30, 2024		227,500		$	19.29

As of September 30, 2024, there were 227,500 shares outstanding covered by RSUs that are expected to vest with a weighted average grant date fair value of $19.29 per share and an aggregate grant date fair value of approximately $4,388. As of September 30, 2024, there was approximately $516 of unrecognized compensation costs related to RSUs granted to employees, which are expected to be recognized as expense over a remaining weighted average period of 0.38 years.

The Company recognized stock-based compensation expense related to the issuance of stock option awards and RSUs to employees and non-employees in the condensed consolidated statements of operations during the three and nine months ended September 30, 2024 and 2023 as follows:

Stock Based Compensation Expense


		Three Months Ended September 30,						Nine Months Ended September 30,
		2024			2023			2024			2023

Research and development		$	720		$	737		$	2,076		$	2,086
General and administrative			619			563			1,881			1,789
Total		$	1,339		$	1,300		$	3,957		$	3,875