On May 16, 2024, the Company's stockholders approved the 2024 Equity Compensation Plan (the “2024 Plan”) authorizing the issuance of up to 2,000,000 shares, succeeding the 2014 Equity Incentive Plan (the “2014 Plan”), under which no further grants may be made pursuant to the terms of the 2014 Plan. Pursuant to the 2024 Plan, the board of directors may grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares, performance units, incentive bonus awards, other cash-based awards and other stock-based awards to employees, officers, non-employee directors, and other individual service providers.

Under the terms of the 2024 Plan and 2014 Plan, the Company granted stock options and RSUs to employees, officers, non-employee directors, consultants and advisors. Stock options have a ten-year term and an exercise price equal to the fair market value of a share of our common stock on the grant date. Stock options generally vest over four years with 25% vesting on the one-year anniversary of the grant date and the remainder vesting in equal monthly installments thereafter, except for grants to non-employee directors that vest annually. RSUs generally vest over a period of one to four years in annual installments beginning on the first anniversary of the grant date.

As of September 30, 2024, an aggregate of 910,009 shares of common stock were reserved for issuance upon the exercise or vesting of outstanding awards under the 2014 Plan. No additional grants can be made under the 2014 Plan.

As of September 30, 2024, an aggregate of 88,561 shares of common stock were reserved for issuance upon the exercise or vesting of outstanding awards and up to 1,908,656 shares of common stock may be issued pursuant to awards granted under the 2024 Plan.

Stock-based Compensation Expense

Stock Options

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes stock option pricing model that uses the assumptions noted in the following table, except for the expected term for non-employees as noted in the following paragraph. The expected term of employee and non-employee director stock options granted under the 2014 Plan and 2024 Plan, all of which qualify as “plain vanilla” per SEC Staff Accounting Bulletin 107, is determined based on the simplified method due to the Company’s limited operating history. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post-vesting termination behavior among our employee population. For non-employee stock options, excluding directors, the Company has elected to utilize the contractual term as the expected term. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with that used to value the stock option. The Company accounts for forfeitures as they occur.

The weighted average grant date fair value of stock options granted during the nine months ended September 30, 2024 and 2023 was $25.17 and $4.20 per share, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2024 and 2023 was approximately $1.1 million and $0.1 million, respectively. As of September 30, 2024, there was approximately $6.1 million of total unrecognized compensation expense, related to non-vested share-based stock option compensation arrangements. The unrecognized compensation expense is estimated to be recognized over a weighted average period of 1.45 years as of September 30, 2024.

Restricted Stock Units

A RSU represents the right to receive one share of our common stock upon vesting of the RSU. The fair value of each RSU is based on the closing price of our common stock on the date of grant. The Company accounts for forfeitures as they occur.

As of September 30, 2024, there was $5.7 million of unrecognized compensation expense related to unvested RSUs, which are expected to be recognized over a weighted average period of 1.98 years.