Stock option plans

12 Months Ended

Dec. 31, 2023

Stock option plan

Stock option plans

9. Stock option plans

In September 2019, the Company’s Board of Directors approved the 2019 Equity Incentive Plan (the “2019 Plan) and each outstanding option to purchase Aprea AB ordinary shares pursuant to a previous plan was cancelled and the Company issued to each holder of such Aprea AB option, a substitute option to purchase, on the same terms and conditions as were applicable to such Aprea AB option, shares of the Company’s common stock pursuant to the 2019 Plan.

The Board of Directors has the discretion to provide for accelerated vesting under the 2019 Plan. At December 31, 2023, there were 61,637 shares available for future grant under the 2019 Plan.

The Company recorded stock-based compensation expense of $0.4 million, $17.0 million and $7.8 million during the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, there was $0.6 million of

unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the 2019 Plan, which is expected to be recognized over a weighted-average period of approximately 2.8 years.

The fair value of each option award is estimated on the date of grant using Black-Scholes, with the assumptions noted in the table below. Expected volatility for the Company’s common stock was determined based on an average of the historical volatility of a peer group of similar public companies. The expected term of options granted to employees was calculated using the simplified method, which represents the average of the contractual term of the option and the weighted-average vesting period of the option. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate expected term. The contractual life of the option was used for the expected life of options granted to non-employee. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The risk-free rate for periods within the expected life of the option is based upon the Swedish Government Bond Rate in effect at the time of grant.

The assumptions used in Black-Scholes are as follows:

	Year ended December 31,
	2023	2022	2021
Expected volatility	84.8%-91.6%	84.4%-89.6%	88.1%-90.2%
Risk‑free rate	3.41%-4.73%	1.95%-2.69%	0.96%-1.04%
Expected dividend yield	0%	0%	0%
Expected term in years	5.50-10.00	6.08-10.00	5.50 - 6.08

A summary of option activity under the Plan during the years ended December 31, 2023, 2022 and 2021 are as follows:

			Weighted‑		Weighted
			average		average
			exercise		remaining	Aggregate
	Number of		price per		contractual	intrinsic
	options		share		term (in years)	value
Outstanding at December 31, 2020		188,552	$	182.00	6.8
Granted		58,980		117.40
Exercised		(11,319)		18.40
Cancelled/Forfeited		(6,905)		330.60
Outstanding at December 31, 2021		229,308	$	169.00	6.6
Granted		96,798		31.40
Options assumed in Atrin merger		163,733		14.21
Exercised		—		—
Cancelled/Forfeited		(9,565)		118.60
Outstanding at December 31, 2022		480,274	$	89.49	6.8	$
Granted		123,062		5.68
Exercised		—		—
Cancelled/Forfeited		(6,870)		21.80
Outstanding at December 31, 2023		596,466	$	72.95	6.2	$	45,825
Exercisable at December 31, 2023		464,086	$	91.82	5.3	$	—
Vested or expected to vest at December 31, 2023		596,466	$	72.95	6.2	$	45,825

The weighted-average grant date fair value of options granted during the years ended December 31, 2023, 2022 and 2021, was $4.35, $23.68 and $85.82, per share, respectively.

Restricted Stock Units

During the year ended December 31, 2023, the Company granted the following RSU’s:

● a total of 17,493 RSUs to executive officers of the Company which vest ratably on the 1^st, 2^nd and 3^rd anniversaries of the grant date.

● a total of 3,000 RSUs to non-employee directors of the Company which vest on the one-year anniversary of the grant date.

During the year ended December 31, 2022, the Company granted the following RSU’s:

● a total of 9,320 RSUs to executive officers of the Company which vest ratably on the 1^st, 2^nd and 3^rd anniversaries of the grant date.

● a total of 3,414 RSUs to non-employee directors of the Company which vest on the one-year anniversary of the grant date.

● a total of 11,330 RSUs to executive officers and certain other employees of the Company which vest ratably on the 1^st, 2^nd and 3^rd anniversaries of the grant date. These RSUs vested on May 16, 2022 in connection with the acquisition of Atrin.

During the year ended December 31, 2021, the Company granted the following RSU’s:

● a total of 25,000 RSUs to executive officers and certain other employees of the Company, 800 of which were canceled prior to vesting. The remaining RSUs vested on May 16, 2022 in connection with the acquisition of Atrin.

● a total of 1,150 RSUs to non-employee directors of the Company. These RSUs vested on May 16, 2022 in connection with the acquisition of Atrin.

As of December 31, 2023, there was $0.2 million of unrecognized compensation cost related to RSUs granted under the 2019 Plan, which is expected to be recognized over a weighted-average period of approximately 1.7 years.

The following table shows restricted stock unit activity during the year ended December 31, 2023:

		Weighted‑
		average
		grant date
	Shares	fair value
Outstanding at December 31, 2020	—	$	—
Granted	26,150		118.20
Vested	(5,365)		118.80
Cancelled/Forfeited	(800)		120.00
Outstanding at December 31, 2021	19,985	$	118.20
Granted	24,064		28.68
Vested	(30,981)		88.21
Cancelled/Forfeited	(334)		114.60
Outstanding at December 31, 2022	12,734	$	21.80
Granted	20,493		8.81
Vested	(5,102)		21.80
Cancelled/Forfeited	(4,255)		21.80
Outstanding at December 31, 2023	23,870	$	10.00