Equity Incentive Plans

3 Months Ended

Mar. 31, 2025

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plans

. Equity Incentive Plans

In January 2024, the Company’s board of directors adopted, and stockholders approved, the Company’s 2024 Equity Incentive Plan (the “2024 Plan”), which became effective on February 6, 2024. The 2024 Plan superseded the Company’s 2019 Equity Incentive Plan (the “2019 Plan”). No share awards can be granted under the 2019 Plan from the effective date of the 2024 Plan. Shares subject to outstanding equity awards granted under the 2019 Plan may be added to the 2024 Plan as such shares become available from time to time if awards terminate, expire, or lapse for any reason without the delivery of shares, or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price.

As of March 31, 2025, incentive stock options, nonstatutory stock options and restricted stock units had been granted under the 2024 Plan. As of March 31, 2025, 4,953,253 shares of the Company’s common stock were reserved for issuance under the 2024 Plan.

In January 2024, the Company’s board of directors and stockholders adopted the Company’s 2024 Employee Stock Purchase Plan (the “ESPP”), which became effective on February 6, 2024. As of March 31, 2025, 844,000 shares of common stock were reserved for future issuance under the ESPP.

In September 2024, the Company adopted the 2024 Inducement Equity Incentive Plan (the “Inducement Plan”). As of March 31, 2025, 3,354,579 shares were granted and 645,741 shares were available for future grant under the Inducement Plan.

Stock Options

Stock options issued under the 2019 Plan, 2024 Plan and the Inducement Plan generally vest over a four-year period and expire ten years from the date of grant. Certain options provide for accelerated vesting if there is a change in control, as defined in the individual award agreements and the Company’s severance policies.

A summary of option activity under the 2019 Plan, 2024 Plan and the Inducement Plan is as follows:

	Number of Options			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2024		7,595,922		$	5.83		7.58	$	760
Options granted		687,679		$	3.08
Options exercised		(3,955	)	$	0.73
Options forfeited		(250,766	)	$	5.77
Options expired		(49,070	)	$	4.64
Outstanding at March 31, 2025		7,979,810		$	5.60		7.44	$	30
Exercisable at March 31, 2025*		1,813,209		$	4.54		4.46	$	30
Vested and expected to vest at March 31, 2025		7,979,810		$	5.60		7.44	$	30

* Includes 186,769 shares of unvested stock options for which the holders have the right to early exercise such options as of March 31, 2025.

Aggregate intrinsic value represents the difference between the fair value of the underlying common stock and the exercise price. The weighted-average grant date fair value of options granted for the three months ended March 31, 2025 and 2024 was $2.44 and $17.52, respectively. The total fair value of options that vested during the three months ended March 31, 2025 and 2024 was $2.9 million and $0.5 million, respectively. The intrinsic value of options exercised during the three months ended March 31, 2025 and 2024 was less than $0.1 million and $3.1 million, respectively, and is calculated as the difference between the exercise price and the fair value of common stock as of the exercise date. As of March 31, 2025, total unrecognized stock-based compensation expense was $27.9 million, which is expected to be recognized over a weighted-average period of 3.1 years.

Restricted Stock Units

During the three months ended March 31, 2025, the Company granted Restricted Stock Units (“RSUs”) for 112,000 shares with a weighted-average grant date fair value per share of $2.70. RSU shares vest over a four-year period. The fair value of the RSUs equals the fair value of the Company's common stock as of the grant date. The estimated fair value of RSUs granted was $0.3 million. As of March 31, 2025, total unrecognized compensation expense for RSUs was $2.8 million, which is expected to be recognized over weighted-average period of 3.2 years.

	Number of RSUs			Weighted- Average Grant Rate Fair Value
Unvested at December 31, 2024		549,001		$	7.19
Granted - RSUs		112,000			2.70
Forfeited - RSUs		(25,834	)		6.88
Unvested at March 31, 2025		635,167		$	6.41

During the year ended December 31, 2024, the Company granted performance RSUs for 100,000 shares with a weighted-average grant date fair value per share of $8.05. There was no activity for performance RSUs during the three months ended March 31, 2025. Performance RSU shares vest in full upon the Company receiving certain regulatory approvals within 36 months from the grant date. The fair value of the performance RSUs equals the fair value of the Company's common stock as of the grant date. The estimated fair value of performance RSUs granted was $0.8 million. As of March 31, 2025, total unrecognized compensation expense for performance RSUs was $0.8 million. Compensation expense of $0.8 million for performance RSUs is expected to be recognized when it is probable that the performance criteria will be achieved over the remaining vesting term. As of March 31, 2025, the performance criteria was not probable and no expense was recognized.
 

Stock-Based Compensation Expense

The Black-Scholes option pricing model, used to estimate fair value of the option awards, requires the use of the following assumptions:

•Fair value of common stock. Prior to the IPO, the fair market value of common stock was determined by the Board of Directors with assistance from management and external valuation experts. The approach to estimating the fair market value of common stock was consistent with the methods outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Subsequent to the IPO, the fair value of common stock is the Company’s closing price per share on the Nasdaq Global Select Market at the grant date.

•Expected Term. The expected term of options granted represents the period of time that the options are expected to be outstanding. Due to the lack of historical exercise history, the expected term of the Company’s stock options has been determined by calculating the midpoint of the contractual term of the options and the weighted-average vesting period.

•Expected Volatility. The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company did not have any trading history for the common stock. The Company will continue to analyze the historical stock price volatility and expected term assumption as more historical data for the common stock becomes available.

•Risk-Free Interest Rate. The risk-free interest rate assumption is based on the U.S. Treasury instrument whose term was consistent with the expected term of the Company’s stock options.

•Dividends. The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used.

The fair value of options granted was estimated using the Black-Scholes valuation model using the following assumptions for the three months ended March 31, 2025 and 2024, respectively:

	Three Months Ended March 31,
	2025	2024
Expected volatility	96.0% - 97.1%	93.0%
Expected dividend yield	0%	0%
Expected term (in years)	5.35 - 6.08	6.07 - 6.08
Risk-free interest rate	4.0% - 4.5%	4.1% - 4.2%

The following table presents the classification of stock-based compensation expense related to stock options granted (in thousands):

	Three Months Ended March 31,
	2025		2024
Research and development	$	806	$	581
General and administrative		1,355		1,697
Total stock-based compensation expense	$	2,161	$	2,278

In January 2024, in connection with the Former CEO note forgiveness (see Note 8), the Company recognized stock-based compensation expense of $1.1 million in general and administrative expenses in the statement of operations and comprehensive loss for the three months ended March 31, 2024.