6. Stockholders’ Equity (Deficit)

Sales Agreement

In May 2025, the Company entered into a Sales Agreement (the “Agreement”) with Leerink Partners LLC (“Leerink Partners”) relating to the offer and sale of up to $75.0 million in shares of its Class A common stock, par value $0.001 per share (the “Shares”). The Company is not obligated to make any sales of Shares under the Agreement. Any sales under the Agreement will be made pursuant to an “at-the-market offering” (the “ATM Program”) in accordance with Rule 415(a)(4) under the Securities Act of 1933, as amended. The Company has not sold any shares of its Class A common stock under the Agreement during the three months ended June 30, 2025.

Common Stock

The Company has two classes of common stock: Class A common stock and Class B common stock. Class A common stock has one vote per share and Class B common stock has no votes per share. As of June 30, 2025, of the authorized 200,000,000 shares of Class A common stock, 19,190,723 shares of Class A common stock were issued and outstanding, and of the authorized 20,000,000 shares of Class B common stock, 6,729,172 shares of Class B common stock were issued and outstanding.

Class A common stock reserved for future issuance consisted of the following:

 There are no shares of Class B common stock reserved for future issuance as of June 30, 2025 and December 31, 2024.

Stock Options

In March 2024, the Company's board of directors and its stockholders adopted and approved the 2024 Equity Incentive Plan (the “2024 Plan”). The 2024 Plan is the successor of the Company's 2012 Equity Incentive Plan (the “2012 Plan”). However, awards outstanding under the 2012 Plan will continue to be governed by their existing terms. The 2024 Plan allowed for the issuance of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted shares, restricted stock units, and other stock awards to the Company's employees, members of its board of directors, and consultants. 

The number of shares initially reserved for issuance under the 2024 Plan was 2,700,000. As of June 30, 2025, there were 1,700,924 shares of the Company’s Class A common stock available for issuance under the 2024 Plan. The aggregate number of shares reserved for issuance under the 2024 Plan will automatically increase on the first day of each fiscal year of the Company, commencing in 2025 and ending in (and including) 2034, by a number equal to the lesser of (a) 5% of the aggregate shares of Class A common stock and Class B common stock issued and outstanding as of the last day of the prior fiscal year, or (b) a number of shares of Class A common stock determined by the Company's board of directors.

Under the 2024 Plan, the exercise price for options granted under the 2024 Plan may not be less than 100% of the fair market value of the Class A common stock on the grant date. Optionees will be permitted to pay the exercise price in cash or, with the consent of the compensation committee (i) with shares of common stock that the optionee already owns, (ii) by an immediate sale of shares through a broker approved by the Company, (iii) by instructing the Company to withhold a number of shares otherwise deliverable upon exercise having an aggregate fair market value that does not exceed the exercise price, or (iv) by other methods permitted by applicable law.  

The Company's board of directors (or a committee thereof to which the Company's board of directors has delegated authority) may amend or terminate the 2024 Plan at any time. If the Company's board of directors amends the 2024 Plan, it does not need stockholder approval of the amendment unless required by applicable law, regulation or rules. The 2024 Plan will terminate automatically ten years after the date when the Company's board of directors adopted the 2024 Plan.

In April 2025, the Company granted inducement awards outside of the 2024 Plan to the Company's Chief Medical Officer and Head of Development in the form of an option to purchase 286,000 shares of the Company's Class A common stock with an exercise price per share equal to $4.50. The option awards were granted as an inducement material to his commencement of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). These inducement awards are included in stock-based compensation and the following tables.

Stock option activity is as follows:

The aggregate intrinsic value of options exercised during the six months ended  June 30, 2025 and 2024 was $0.2 million and $0.4 million, respectively, determined as of the date of exercise.

Options exercisable include options which are not vested but are available to be early exercised. As of June 30, 2025, there were no options available to be early exercised. As of  December 31, 2024, of the 2,114,772 options exercisable, 35,794 options were available to be early exercised.

The Company estimated the fair value of stock options using the Black-Scholes valuation model. The Company accounts for any forfeitures of options when they occur. Previously recognized compensation expense for an award is reversed in the period that the award is forfeited. The fair value of stock options expected to vest was estimated using the following weighted-average assumptions:

The weighted-average grant-date fair value per share of stock options granted and expected to vest as of their grant date during the three months ended June 30, 2025 and 2024 was $3.33 and $13.53 per share, respectively. The weighted-average grant-date fair value per share of stock options granted and expected to vest as of their grant date during the six months ended June 30, 2025 and 2024 was $6.37 and $13.55 per share, respectively.

The Company recorded $1.3 million and $1.1 million in stock-based compensation in general and administrative and research and development, respectively, for the three months ended June 30, 2025. The Company recorded $0.9 million and $0.6 million in stock-based compensation in general and administrative and research and development, respectively, for the three months ended June 30, 2024.

The Company recorded $2.8 million and $2.2 million in stock-based compensation in general and administrative and research and development, respectively, for the six months ended June 30, 2025. The Company recorded $1.3 million and $1.0 million in stock-based compensation in general and administrative and research and development, respectively, for the six months ended June 30, 2024.

As of June 30, 2025, there was approximately $25.4 million of total unrecognized stock-based compensation related to stock-based compensation arrangements, which is expected to be recognized over a weighted-average period of approximately 2.9 years. 

Employee Stock Purchase Plan

In March 2024, the Company's board of directors and its stockholders adopted and approved the 2024 Employee Stock Purchase Plan (the “2024 ESPP”). The 2024 ESPP became effective as of  April 9, 2024. The purpose of the 2024 ESPP is to provide eligible employees with an opportunity to increase their interest in the success of the Company by purchasing shares of Class A common stock from the Company on favorable terms and to pay for such purchases through payroll deductions or other approved contributions. The new payroll deduction rate may be any whole percentage of the participant’s compensation, but not less than 1% nor more than 15%.

The number of shares initially reserved for issuance under the 2024 ESPP was 280,000. As of June 30, 2025, there were 472,203 shares of the Company’s common stock reserved and available for issuance under the 2024 ESPP. The number of shares reserved for issuance under the 2024 ESPP will automatically increase on the first day of each fiscal year of the Company, commencing in 2025 and ending in (and including) 2044, by a number equal to the lesser of (i) 280,000 shares, (ii) 1% of the aggregate shares of Class A common stock and Class B common stock issued and outstanding on the last day of the prior fiscal year, or (iii) a number of shares determined by the Company's board of directors. The number of shares reserved under the 2024 ESPP will automatically be adjusted in the event of a stock split, stock dividend or a reverse stock split (including an adjustment to the per-purchase period share limit). 

During the six months ended June 30, 2025, there were 48,346 shares purchased under the 2024 ESPP and the recorded expense was $0.1 million. During the six months ended June 30, 2024, there were no shares purchased under the 2024 ESPP and the recorded expense was not material.