Stock-based compensation expense recognized for all equity awards has been reported in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Research and development expense	$	664	$	913	$	1,327	$	1,824
Selling, general and administrative expense		4,707		2,452		9,342		4,856
Total	$	5,371	$	3,365	$	10,669	$	6,680

During the three and six months ended June 30, 2025, $0.3 million and $0.5 million of stock compensation expense was capitalized into inventory, respectively. No stock-based compensation expense was capitalized into inventory during the three and six months ended June 30, 2024.

As of June 30, 2025, the total unrecognized stock-based compensation expense related to outstanding employee options was $53.9 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.6 years.

As of June 30, 2025 and December 31, 2024, there were 1,382 and 2,763 restricted stock units outstanding, respectively.

In September 2018, ARS Pharma adopted the 2018 Equity Incentive Plan. As a result of the Merger, on November 8, 2022 ARS Pharma assumed Silverback’s 2016 and 2020 Equity Incentive Plans, and Employee Stock Purchase Plan (“ESPP”). There were 111,918 shares and 43,679 shares of common stock purchased under the ESPP during the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, 25,737,116 shares were authorized under the 2016 and 2020 Equity Incentive Plans, of which 7,765,139 shares were available for future grant, and 13,033,358 shares were outstanding. As of June 30, 2025, 6,634,333 shares were authorized under the 2018 Equity Incentive Plan, of which 297,345 shares were available for future grant, and 4,240,014 shares were outstanding. The Company does not intend to grant future stock options or other equity awards under the 2016 or 2018 Equity Incentive Plans.

Stock options granted under the Company’s equity incentive plans expire no later than 10 years from the date of grant and generally vest over a four-year period, with vesting either occurring at a rate of 25% at the end of the first year and thereafter in 36 equal monthly installments or on a monthly basis. In the case of awards granted to the Company’s non-employee board members, vesting generally occurs on a monthly basis over three years or in full on an annual basis. The Company issues new shares of common stock upon the exercise of stock options.

A summary of the Company’s stock option activity for the six months ended June 30, 2025 is as follows:


						Weighted-
	Shares			Weighted-		Average		Aggregate
	Subject to			Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	Outstanding			Price		Life (Years)		(in thousands)
Outstanding at December 31, 2024		15,161,180		$	6.63
Granted		3,158,150		$	11.54
Exercised		(630,187	)	$	4.07
Forfeited		(417,153	)	$	11.23
Outstanding at June 30, 2025		17,271,990		$	7.51		7.7	$	174,541
Exercisable at June 30, 2025		9,540,712		$	5.72		6.8	$	114,815

The exercisable shares subject to options outstanding at June 30, 2025 in the table above include vested and early exercisable awards. The aggregate intrinsic value in the table above is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the Company’s common stock for all options that were in-the-money at June 30, 2025. The aggregate intrinsic value of options exercised during the six months ended June 30, 2025 and 2024 was $5.9 million and $3.4 million, respectively.

The weighted-average grant date fair value per share of option grants for the six months ended June 30, 2025 and 2024 was $8.60 and $4.52, respectively. The total fair value of shares vested during the six months ended June 30, 2025 and 2024 was $12.2 million and $9.9 million, respectively.

The fair value of stock options granted was estimated using a Black-Scholes option-pricing model (“Black-Scholes”) with the following weighted-average assumptions:


	Six Months Ended June 30,
	2025			2024
Expected term (in years)		6.0			6.0
Expected volatility		86.7	%		94.0	%
Risk-free interest rate		4.3	%		4.0	%
Expected dividend yield		—			—

The fair value of stock options was determined using the Black-Scholes assumptions below. Each of these inputs is subjective and generally requires significant judgment.

Fair Value of Common Stock. The fair market value of the Company’s common stock is based on its closing price as reported on the date of grant on the primary stock exchange on which the Company’s common stock is traded.

Expected Term. The expected term represents the period that the options granted are expected to be outstanding. The expected term of stock options issued is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term) as the Company has concluded that its stock option exercise history does not provide a reasonable basis upon which to estimate expected term.

Expected Volatility. Given the Company’s limited historical stock price volatility data, the Company derived the expected volatility from the average historical volatilities over a period approximately equal to the expected term of comparable publicly traded companies within its peer group that were deemed to be representative of future stock price trends as the Company has limited trading history for its common stock. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Risk-free Interest Rate. The risk-free interest rate is based on the U.S. Treasury rate, with maturities similar to the expected term of the stock options.