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Stock-based Compensation | 9 Months Ended
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Sep. 30, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-based Compensation | Stock-based Compensation 2017 Stock Incentive Plan The Company adopted the CARISMA Therapeutics Inc. 2017 Stock Incentive Plan, as amended (the Legacy Carisma Plan), that provided for the grant of incentive stock options to employees, directors, and consultants. The maximum term of options granted under the Legacy Carisma Plan was ten years, and stock options typically vested over a four-year period. The Company’s stock options vest based on the terms in the awards agreements and generally vest over four years. Upon completion of the Merger, the Company assumed the Legacy Carisma Plan and the outstanding and unexercised options issued thereunder and ceased granting awards under the Legacy Carisma Plan. 2014 Stock Incentive Plan Stock options outstanding under the 2014 Amended and Restated Stock Incentive Plan (the 2014 Plan) generally vest over a four-year period and are exercisable for a period of ten years from the date of grant. As of September 30, 2024, approximately 3.8 million shares of common stock remained available for issuance. 2014 Employee Stock Purchase Plan The Carisma Therapeutics Inc. 2014 Employee Stock Purchase Plan had 0.2 million shares of common stock available for issuance as of September 30, 2024. The following table summarizes stock option activity for the nine months ended September 30, 2024:
| Options |  | Weighted average exercise price |  | Weighted average remaining contractual term (years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2023 | 6,023,370 |  | $ | 3.94 |  |  |  |  |
Exercised | (3,810) |  | 0.99 |  |  |  |  | $ | 4 |
Granted | 3,766,765 |  | 1.76 |  |  |  |  |
Forfeited | (1,008,687) |  | 4.70 |  |  |  |  |
Outstanding as of September 30, 2024 | 8,777,638 |  | $ | 2.92 |  |  | 7.9 |  | $ | 620 |
Exercisable as of September 30, 2024 | 3,871,741 |  | $ | 2.37 |  |  | 6.4 |  | $ | 619 |
The weighted-average grant-date per share fair values of options granted during the nine months ended September 30, 2024 and 2023 were $1.44 and $4.42, respectively. The fair values in the nine months ended September 30, 2024 and 2023 were estimated using the Black-Scholes option-pricing model based on the following assumptions:
| Nine Months Ended September 30,
| 2024 |  | 2023
Risk-free interest rate | 3.77% - 4.59% |  | 2.92% - 4.03%
Expected term | 6 years |  | 6 years
Expected volatility | 103.00% - 112.10% |  | 57.77% - 65.00%
Expected dividend yield | — |  |  | — |
Stock-Based Compensation Expense The Company recorded stock-based compensation expense in the following expense categories in its accompanying unaudited interim consolidated statements of operations:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Research and development | $ | 384 |  |  | $ | 418 |  |  | $ | 776 |  |  | $ | 452 |
General and administrative | 731 |  |  | 430 |  |  | 2,021 |  |  | 991 |
| $ | 1,115 |  |  | $ | 848 |  |  | $ | 2,797 |  |  | $ | 1,443 |
In connection with the revised operating plan, 869,800 options were forfeited during the nine months ended September 30, 2024, resulting in a reduction in stock-based compensation expense related to research and development and general and administrative employees. The Company recognized stock-based compensation expense of $0.2 million related to the modification of Sesen Bio options assumed in connection with the Merger during nine months ended September 30, 2023. Compensation cost for awards not vested as of September 30, 2024 was $10.8 million and will be expensed over a weighted-average period of 2.7 years.

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