12. Shareholders’ Equity

(a) Issued share capital

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The authorized share capital of the Company amounting to € 13,600,000 consists of 170,000,000 ordinary shares and 170,000,000 preference shares with a par value of € 0.04 per share. At December 31, 2025, 107,710,916 ordinary shares were issued which is comprised of 105,361,064 ordinary shares fully paid and outstanding as well as 2,349,852 ordinary shares held by the Company as treasury shares (2024: 2,498,389). These treasury shares are issued and not outstanding. In the prior year, exercise of share options or vesting of RSUs were incorrectly presented as (395,559) and treasury shares issued were incorrectly presented as 394,481.

In December 2022, the Company issued 9,381,586 shares to Lilly pursuant to the amended and restated licensing and research collaboration between the Company and Lilly (Note 16), resulting in gross proceeds of € 14,122,000, with no significant transaction costs.

In September 2024, the Company filed a shelf registration statement on Form F-3, which permitted: (a) the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $ 300,000,000 of its ordinary shares, warrants and/or units; and (b) as part of the $ 300,000,000, the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $ 75,000,000 of its ordinary shares that may be issued and sold under a sales agreement (the “sales agreement”) with Cantor Fitzgerald & Co. (“Cantor”) in one or more at-the-market (“ATM”) offerings. The Company will pay Cantor a commission equal to 3% of the gross proceeds of the sales price of all ordinary shares sold through it as sales agent under the sale agreement. As of December 31, 2025, no shares have been issued pursuant to this ATM facility.

In October 2024, the Company consummated an underwritten public offering of 18,000,000 ordinary shares (the “offering”) at a public offering price of $ 3.50 per share (the “public offering price”). In addition, the Company granted the underwriters a 30-day option to purchase up to 2,700,000 additional ordinary shares at the public offering price, less underwriting discounts and commissions. The option was partially exercised on October 31, 2024, resulting in the issuance of 1,940,072 shares. The gross proceeds from the Offering and subsequent partial exercise of the underwriters’ option, amounted to $ 69,790,000 (€ 64,600,000) while the transaction costs amounted to approximately € 4,365,000, resulting in net proceeds of approximately € 60,235,000.

Concurrently with the Offering, the Company entered into a share purchase agreement with Lilly in a separately negotiated transaction (the “concurrent private placement”), pursuant to which the Company agreed to offer and sell, and Lilly agreed to purchase, 3,523,538 ordinary shares at a price per share equal to the public offering price, for total gross proceeds of approximately $ 12,300,000, subject to a purchase price cap of $ 15,000,000, the consummation of the Offering and the satisfaction of other customary closing conditions. The proceeds of $ 12,300,000 (€ 11,400,000) from the concurrent private placement were received on October 25, 2024. The ordinary shares purchased in the concurrent private placement are not subject to any underwriting discounts or commissions.

(b) Equity settled employee benefit reserve

The costs of share options and RSUs for employees, members of the Board are recognized in the income statement, together with a corresponding increase in equity during the vesting period, taking into account (deferral of) corporate income taxes. The accumulated expense of share-based compensation recognized in the income statement is shown separately in the equity category ‘equity settled employee benefit reserve’ in the ‘statement of changes in equity’. On September 25, 2017, the Company established a Dutch foundation named Stichting Bewaarneming Aandelen ProQR for holding shares in trust for employees, members of the Board of the Company and its group companies who from time to time could exercise options under the Company’s equity incentive plans.

(c) Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

(d) Share options and restricted stock units

The Company operates an equity-settled share-based compensation plan which was introduced in 2013. Options and RSUs may be granted to employees, members of the Board and consultants. The compensation expenses included in operating costs for this plan were € 4,014,000 in 2025 (2024: € 2,544,000), of which € 2,848,000 (2024: € 1,984,000) was recorded in general and administrative costs and € 1,166,000 (2024: € 560,000) was recorded in research and development costs based on employee allocation.

Options granted under this stock option plan are exercisable once vested. Any vesting schedule may be attached to the granted options and RSUs. Typical vesting periods are:

The options expire ten years after date of grant. Options granted under the stock option plan are granted at exercise prices which equal either the face value or the fair value of the ordinary shares of the Company at the date of the grant.

The fair value of the options is estimated at the date of grant using the Black-Scholes option-pricing model, with on average the following assumptions:

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Risk-Free Interest Rate

The risk-free interest rate is based upon the U.S. Treasury yield curve in effect at the time of grant, with a term that approximates the expected life of the option.

Expected Dividend Yield

The Company currently does not pay dividends and has no plans to do so.

Expected Volatility

The historical volatility assumption was based on the stock price over the expected term preceding the grant date.

Expected Term

The expected term of the options reflects the anticipated timing of exercises and forfeitures, which is estimated using a simplified method based on the current vesting schedule of awards. The expected life of options represents the average of the 4-year vesting period and 10-year contractual term.

Options

The resulting weighted average grant date fair value of the options amounted to € 1.58 in 2025 (2024: € 1.51). The stock options granted have a 10-year life following the grant date and are assumed to be exercised seven years from date of grant for all awards.

Movements in the number of options outstanding and their related weighted average exercise prices are as follows:

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The options granted during the year include 1,414,000 options subject to achievement of specified non-market performance conditions. As at December, 31, 2025 these non-market performance conditions were met and the related share based compensation expense was recognized in the income statement.

The options outstanding at December 31, 2025 had an exercise price in the range of € 0.56 to € 18.62 (2024: € 0.64 to € 21.06) and a weighted-average contractual life of 6.5 years (2024: 6.3 years). The weighted-average share price at the date of exercise for share options exercised in 2025 was € 1.87 (2024: € 2.09).

Restricted Stock Units

The fair value of RSUs is determined at the grant date by using the Company’s share price at the grant date. The resulting weighted average grant date fair value of the RSUs amounted to € 2.76 in 2023. No RSUs were granted in 2025 or 2024.

Movements in the number of RSUs outstanding are as follows:

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Refer to Note 26 for the share-based compensation granted to Board of directors and senior management personnel.