The Company grants stock-based awards under its 2021 Stock Option and Incentive Plan (the “2021 Plan”), which was approved by its stockholders in February 2021 and amended and restated in January 2023. The Company also has outstanding stock option awards under its 2017 Stock Option and Grant Plan (the “Private Disc Plan”), the 2017 Stock Option and Grant Plan (the “Gemini 2017 Plan”), and the 2021 Inducement Plan, but is no longer granting awards under these plans. The Company also grants awards under its 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which was approved by the Company's stockholders in July 2021 and amended and restated in January 2023. In addition, subject to approval by the Company's board of directors, the Company may grant stock-based awards outside of the 2021 Plan as an inducement to its executives.

Total stock-based compensation expense recorded as research and development and general and administrative expenses, respectively, for employees, directors and non-employees is as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Research and development	$	1,543	$	345
General and administrative		2,515		679
Total stock-based compensation expense	$	4,058	$	1,024

The following table summarizes unrecognized stock-based compensation expense as of March 31, 2024.


	Unrecognized Expense (In Thousands)		Weighted-Average Remaining Period of Recognition (In Years)
Restricted stock units	$	22,595		3.87
Stock options		30,753		3.37
Total unrecognized equity-based compensation expense	$	53,348

For purposes of calculating stock-based compensation, the Company determines the fair value of the restricted stock units based on the fair value of the Company’s common stock at the time of grant.

On February 7, 2024, the Company granted a restricted stock unit award for 36,666 shares of common stock outside of the 2021 Plan to its newly appointed Chief Financial Officer, Jean Franchi, as an inducement for entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). The restricted stock unit award vests with respect to 25% of the underlying shares on each of the first, second, third and fourth anniversaries of the vesting date as set by the Company policy, subject to Ms. Franchi’s continued employment with the Company.

On February 26, 2024, the Company granted a restricted stock unit award for 36,666 shares of common stock outside of the 2021 Plan to its newly appointed Chief Commercial Officer, Pamela Stephenson, as an inducement for entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). The restricted stock unit award vests with respect to 25% of the underlying shares on each of the first, second, third and fourth anniversaries of the vesting date as set by the Company policy, subject to Ms. Stephenson’s continued employment with the Company.

The following table summarizes restricted stock unit activity for the three months ended March 31, 2024.


	Number of Units			Weighted- Average Grant Date Fair Value
Restricted stock units as of December 31, 2023		—		$	-
Granted		371,034		$	64.14
Forfeited		(2,320	)	$	63.90
Restricted stock units as of March 31, 2024		368,714		$	64.14

For purposes of calculating stock-based compensation, the Company estimates the fair value of stock options on the grant date using the Black-Scholes option-pricing model. This model incorporates various assumptions, including the expected volatility, expected term, and interest rates.

On February 7, 2024, the Company granted an option to purchase 55,000 shares of common stock outside of the 2021 Plan to its newly appointed Chief Financial Officer, Jean Franchi, as an inducement for entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). The option award has a ten-year term, with 25% of the underlying shares vesting and becoming exercisable on February 7, 2025, and the balance of the option award vesting in equal monthly installments over 36 months thereafter, subject to Ms. Franchi’s continued employment with the Company, and has an exercise price of $65.25.

On February 26, 2024, the Company granted an option to purchase 55,000 shares of common stock outside of the 2021 Plan to its newly appointed Chief Commercial Officer, Pamela Stephenson, as an inducement for entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). The option award has a ten-year term, with 25% of the underlying shares vesting and becoming exercisable on February 26, 2025, and the balance of the option award vesting in equal monthly installments over 36 months thereafter, subject to Ms. Stephenson’s continued employment with the Company, and has an exercise price of $64.66.

The following table summarizes stock option activity for the three months ended March 31, 2024.


	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value (In Thousands)
Outstanding at December 31, 2023		2,459,037		$	13.82		7.81	$	109,078
Granted		616,871			64.59
Exercised		(95,467	)		8.44
Forfeited		(30,924	)		50.32
Expired		(1,244	)		14.51
Outstanding at March 31, 2024		2,948,273		$	24.23		8.05	$	114,368
Exercisable at March 31, 2024		1,329,424		$	10.67		6.99	$	69,546

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the common stock as of the end of the period. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2024 and 2023 was $5.5 million and $0.5 million, respectively.

The weighted-average assumptions used to estimate the fair value of stock options granted were as follows:


	Three Months Ended March 31,
	2024			2023
Risk-free interest rate		4.01	%		3.86	%
Expected term (in years)		6.03			6.05
Expected volatility		58	%		62	%
Expected dividend yield		0	%		0	%
Fair value per share of common stock	$	64.59		$	23.10

The total fair value of options vested during the three months ended March 31, 2024 and 2023 was $1.5 million and $0.8 million, respectively.

As of March 31, 2024, the Company had issued 63,061 shares of restricted common stock to the founders of Disc Medicine, Inc. prior to the merger (now known as Disc Medicine OpCo, Inc.), pursuant to subscription agreements and to certain key employees pursuant to the Private Disc Plan at $0.0001 per share. The stock restrictions relate to the sale and transferability of the stock and lapse over the defined vesting period in the restricted stock agreement. The vesting period is generally contingent upon continued employment or consulting services being provided to the Company. In the event of termination, the Company has the right, but not the obligation to repurchase the unvested shares at the original purchase price. As of March 31, 2024, these awards of restricted common stock were fully vested.

A summary of restricted common stock activity is as follows:


	Three Months Ended March 31,
	2024		2023
Unvested at the beginning of the year		—		1,916
Vested		—		(958	)
Unvested at the end of the period		—		958

During the three months ended March 31, 2024 and 2023, 5,736 shares and zero shares, respectively, of common stock were issued under the 2021 ESPP.