Stock-Based Compensation

12 Months Ended

Dec. 31, 2024

Stock-Based Compensation

Stock-Based Compensation

12. Stock-Based Compensation

The Company’s results of operations include expenses relating to stock-based awards as follows (in thousands):

	Year Ended December 31,
	2024		2023		2022
Research and development	$	1,016	$	755	$	1,039
General and administrative		1,987		1,392		1,653
Total	$	3,003	$	2,147	$	2,692

Valuation Assumptions

The Company estimated the fair value of employee stock options using the Black-Scholes valuation model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of employee stock options were estimated using the following assumptions for the years ended December 31, 2024, 2023 and 2022:

	Year Ended December 31,
	2024		2023		2022
Risk-free interest rate	4.3	%	3.9	%	3.0	%
Expected volatility	102.3	%	97.1	%	83.8	%
Expected term (in years)	5.8		5.7		5.5
Expected dividend yield	0	%	0	%	0	%

Risk-free Interest Rate: The risk-free interest rate is estimated based on the U.S. Treasury securities with maturity dates commensurate with the expected term of the equity award.

Volatility: The expected volatility in 2024 and 2023 was determined based on the Company’s historical stock price volatility. In 2022, the Company utilized the average historical stock price volatility of a peer group of publicly traded companies to represent its expected future stock price volatility, due to the insufficient trading history of the Company’s common stock. For purposes of identifying these peer companies, the Company considered the industry, stage of development, size and financial leverage of potential comparable companies. For each grant, the Company measured historical volatility over a period equivalent to the expected term.

Expected Term: The Company uses the simplified method prescribed in the ASC 718, Compensation—Stock Compensation, to calculate the expected term of options granted to employees and directors.

Expected Dividends: The Company has not paid and does not anticipate paying any dividends in the near future.

At December 31, 2024 and 2023, the unrecognized compensation expense associated with respect to options granted to employees was $11.8 million and $4.5 million, respectively, and is expected to be recognized on a straight-line basis over 2.71 and 2.27 years, respectively.