In November 2021, our Board adopted, and our stockholders approved, the 2021 Equity and Incentive Plan (“2021 Equity Plan”), which became effective on November 4, 2021. The 2021 Equity Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, awards of restricted stock, restricted stock units and other stock-based awards. The number of shares of our common stock reserved for issuance under the 2021 Equity Plan is equal to 2,496,934, subject to an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2022 and continuing until, and including, the fiscal year ending December 31, 2031, equal to the lesser of (i) 4% of the number of shares of common stock outstanding on the last day of the calendar month before the date of each automatic increase or (ii) such other amount determined by our Board. As of December 31, 2024, we had 423,022 shares available for future grant under the 2021 Equity Plan.

In November 2021, our Board adopted and our stockholders approved the IO Biotech, Inc. 2021 Employee Stock Purchase Plan (“2021 ESPP”), which became effective on November 4, 2021. The number of shares of our common stock reserved for issuance under the 2021 ESPP is equal to 257,272, subject to an annual increase, to be added on the first day of each fiscal year, beginning January 1, 2022, equal to the lesser of (1) 1% of the number of shares of common stock outstanding on the last day of the calendar month before the date of each automatic increase; (2) 257,272 shares of our common stock; or (3) such other amount as determined by our Board. As of December 31, 2024, the Board had not yet approved any offering under the 2021 ESPP.

In September 2023, our Board adopted the 2023 Inducement Award Plan (“2023 Inducement Plan”), which became effective on September 28, 2023. The 2023 Inducement Plan provides for the grant of non-statutory stock options, stock appreciation rights, awards of restricted stock, restricted stock units and other stock-based awards to eligible employees who satisfy the standards for inducement grants under Nasdaq Global Market rules. The number of shares of our common stock reserved for issuance under the 2023 Inducement Plan is equal to 1,976,427. As of December 31, 2024, there were 1,666,427 shares available for future grant under the 2023 Inducement Plan.

The following table summarizes our stock options activity for the years ended December 31, 2024 and 2023:


	Number of Options and Warrants			Weighted- average exercise price per share		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value (in thousands)
Outstanding December 31, 2022		3,920,172		$	10.77		8.1	$	—
Granted		2,519,994		$	1.99		—	$	—
Cancelled or forfeited		(588,243	)	$	8.74		—	$	—
Outstanding December 31, 2023		5,851,923		$	7.20		8.4	$	102
Granted		3,397,382		$	1.60			$	—
Cancelled or forfeited		(281,700	)	$	3.90			$	—
Outstanding, December 31, 2024		8,967,605		$	5.18		8.1	$	1
Exercisable at December 31, 2024		3,792,936		$	8.47		7.2	$	—

All share-based awards granted are measured based on the fair value on the date of the grant and compensation expense is recognized with respect to those awards over the requisite service period, which is generally the vesting period of the respective award. Forfeitures related to equity-based compensation awards are recognized as they occur, and we reverse any previously recognized compensation cost associated with forfeited awards in the period the forfeiture occurs.

For the years ended December 31, 2024 and 2023, we recorded equity-based compensation expense of $6.5 million and $8.1 million, respectively, related to the issuance of stock options and warrants. As of December 31, 2024, there was $8.2 million of unrecognized compensation cost related to unvested stock-based compensation arrangements that is expected to be recognized over a weighted average period of 2.6 years.

The fair values of the options granted were estimated based on the Black-Scholes model, using the following assumptions:


	Year Ended December 31,
	2024	2023
Expected volatility	80.1% - 89.2%	86.4% - 102.2%
Risk-free interest rate	3.5% - 4.7%	3.5% - 4.5%
Expected term (in years)	5.5 - 6.1	5.5 - 6.1
Expected dividend yield	0%	0%

Equity-based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands):


	December 31,
	2024		2023
Research and development	$	2,559	$	4,204
General and administrative		3,967		3,855
Total equity-based compensation	$	6,526	$	8,059

We did not recognize any tax benefits for stock-based compensation during the years ended December 31, 2024 and 2023.