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Share-Based Compensation
3 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Share-Based Compensation

11. Share-Based Compensation

 

The Company adopted on August 10, 2022, and the stockholders approved on August 18, 2022, the 2022 Stock Plan (the “Plan”). The Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock awards. The Plan, through the grant of stock awards, is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and provide a means by which the eligible recipients may benefit from increases in value of the common stock. In September 2022, the Company issued a total of 101,250 options with a strike price of $3.28 per share to employees, directors, and scientific advisory board members under this Plan. In February 2023, the Company issued an additional total of 3,689,750 options with a strike price of $2.28 per share to employees and directors under this Plan. In August 2023, a total of 2,500 options with a strike price of $3.28 per share were forfeited. In March 2024, the Company issued 216,875 options with a strike price of $13.00 per share to employees under this Plan. Generally, awards granted by the Company vest over four years and have an exercise price equal to the estimated fair value of the common stock as determined by the board of directors with consideration given to contemporaneous valuations of the Company’s common stock prepared by an independent third-party valuation firm.

 

As of March 31, 2024, and December 31, 2023, there were 8,494,625 and 8,711,500 shares, respectively, available for future issuance under the Plan.

 

Stock-based compensation expense is recognized in the Condensed Statements of Operations as follows:

 

(in thousands of dollars)  2024   2023 
  

For the Three Months Ended

March 31,

 
(in thousands of dollars)  2024   2023 
Research and development  $74   $66 
General, administrative and other   406    382 
Total stock-based compensation expense  $480   $448 

 

In addition to this $480 thousand stock-based compensation expense for stock options, a $45 thousand stock-based compensation expense was recognized for the grant of 2,500 shares of Series C Preferred Stock to the CEO during the three months ended March 31, 2024.

 

Unrecognized stock-based compensation costs related to unvested awards and the weighted-average period over which the costs are expected to be recognized as of March 31, 2024, are as follows:

 

   Stock Options 
Unrecognized stock-based compensation expense (in thousands)  $6,899 
Expected weighted-average period compensation costs to be recognized (years)   3.1 

 

A summary of the Company’s stock option activity is as follows:

 

   Stock Options  

Weighted-Average

Exercise Price per

Share

  

Weighted-Average

Remaining Contractual Life

(years)

  

Aggregate

Intrinsic Value

(in thousands)

 
Outstanding as of December 31, 2023   3,788,500   $2.31    9.1     
Granted   216,875   $13.00    10.0     
Exercised      $         
Forfeited/Canceled      $         
Outstanding as of March 31, 2024   4,005,375   $2.89    8.9    31,742 
Exercisable as of March 31, 2024   1,168,720   $2.34    8.9    9,896 

 

The fair value of stock options granted to employees, directors, and consultants was estimated on the date of grant using the Black-Scholes option pricing model using the following assumptions:

 

Assumptions: 

Three Months

Ended

March 31, 2024

    Three Months Ended March 31, 2023  
Risk-free interest rate   4.2%     3.89 %
Expected volatility   97%     90 %
Expected term (years)   7.0      7.0  
Expected dividend   0%     0 %

 

During the three months ended March 31, 2024, the weighted-average grant date fair value of the options granted was $10.79 per share.