Stock-Based Compensation Plans

3 Months Ended

Mar. 31, 2026

Share-Based Payment Arrangement [Abstract]

2021 Employee Stock Purchase Plan

On April 25, 2021, the Company adopted the 2021 Employee Stock Purchase Plan ("ESPP"), which was approved by stockholder vote at the 2021 Annual Meeting of Stockholders held on June 10, 2021. The ESPP provides eligible employees of the Company with an opportunity to purchase common stock of the Company through accumulated payroll deductions, which are included in other current liabilities until they are used to purchase Company shares. Eligible employees participating in the bi-annual offering period can choose to have up to the lesser of 15% of their annual base earnings or the IRS annual share purchase limit of $25,000 in aggregate market value to purchase shares of the Company’s common stock. The purchase price of the stock is the lesser of (i) 85% of the closing market price on the date of purchase and (ii) the closing market price at the beginning of the bi-annual offering period. The maximum number of shares initially reserved for delivery under the plan was 20,000 shares. An increase of 100,000 shares to 120,000 shares was approved by stockholders of the Company at the Company's Special Meeting of stockholders held on March 4, 2024.

The first enrollment period under the plan commenced on August 1, 2021 and the Company has issued 58,974 shares life-to-date under the ESPP. The Company recognized $16,000 and $26,000 of stock based compensation expense related to the plan during the three months ended March 31, 2026 and 2025, respectively.

Stock Option Programs

In July 2019, the Company’s stockholders approved the 2019 Omnibus Equity Incentive Plan, (as amended, the “2019 Plan”), which was adopted by the Board of Directors (the "Board") with an effective date of June 14, 2019. The 2019 Plan allows for the grant of equity awards to employees, consultants and non-employee directors. An initial maximum of 150,000 shares of the Company’s common stock were available for grant under the 2019 Plan. The 2019 Plan included an evergreen provision that allowed for the annual addition of up to 4% of the Company’s fully-diluted outstanding stock, with a maximum allowable increase of 490,000 shares over the term of the 2019 Plan. In accordance with this provision, the shares available for grant were increased in 2020 through 2023 by a total of 440,887 shares. At the Company's Annual Stockholders meeting on June 28, 2023, stockholders voted to increase the allowable shares under the 2019 plan by 444,000 shares as well as to eliminate the evergreen provision. On March 4, 2024, the stockholders voted at the Company's Special Meeting to increase the allowable shares under the 2019 plan by 910,000 shares. On June 4, 2025, at the Company’s 2025 Annual Meeting of Stockholders, the Company’s stockholders approved a proposal to amend the terms of the 2019 Plan to, among other things, increase the allowable shares under the 2019 plan by 700,000 shares. The 2019 Plan (as amended on June 28, 2023, March 4, 2024 and June 4, 2025) is currently administered by the Board, or, at the discretion of the Board, by a committee of the Board, which determines the exercise prices, vesting schedules and other restrictions of awards under the 2019 Plan at its discretion. Options to purchase stock may not have an exercise price that is less than the fair market value of underlying shares on the date of grant, and may not have a term greater than ten years. Incentive stock options granted to employees typically vest over four years. Non-statutory options granted to employees, officers, members of the Board, advisors, and consultants of the Company typically vest over three or four years.

Shares that are expired, terminated, surrendered or canceled under the 2019 Plan without having been fully exercised will be available for future awards.

Corporate Transaction Option Acceleration Plan

On February 4, 2025, the Company established a Corporate Transaction Option Acceleration Plan, pursuant to which in the case of a merger or consolidation of the Company with or into another corporation or a sale of substantially all of the stock of the Company each option award held by an eligible employee will become fully vested upon the occurrence of a Corporate Transaction.

Stock Option Movements During the Year

The following table summarizes stock option activity for the three months ended March 31, 2026 and 2025, respectively, for the 2019 Plan:


	Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding as of January 1, 2026	2,572,850	$	12.08
Granted	19,000	$	8.36
Exercised	—	$	—

Forfeited or expired	(9,544)	$	8.81
Outstanding as of March 31, 2026	2,582,306	$	12.06	8.01	$	3,330,853
Options exercisable as of March 31, 2026	1,128,145	$	14.98	7.00	$	386,493


	Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding as of January 1, 2025	1,613,605	$	15.20
Granted	19,500	$	10.20
Exercised	—	$	—
Forfeited or expired	(12,245)	$	15.70
Outstanding as of March 31, 2025	1,620,860	$	15.20	8.29	$	16,635
Options exercisable as of March 31, 2025	629,572	$	18.40	7.14	$	3,397

Measurement

The weighted-average assumptions used in the BSM option pricing model to determine the fair value of the employee and non-employee stock option grants relating to the 2019 Plan were as follows:

Risk-Free Interest Rate

The risk-free rate assumption is based on U.S. Treasury instruments with maturities similar to the expected term of the stock options.

Expected Dividend Yield

The Company has not issued any dividends and does not expect to issue dividends over the life of the options. As a result, the Company has estimated the dividend yield to be zero.

Expected Volatility

The Company estimates expected volatility based on the historical volatility of its own stock. The historical volatility data was computed using the daily closing prices during the equivalent period of the calculated expected term of the stock-based awards.

Expected Term

The expected term of options is estimated considering the vesting period at the grant date, the life of the option and the average length of time similar grants have remained outstanding in the past.

The weighted-average grant date fair value of equity classified stock options granted under the 2019 Plan during the three months ended March 31, 2026 and 2025 was $7.10 and $6.50, respectively. The following are the underlying assumptions used in the Black-Scholes option pricing model to determine the fair value of stock options granted to employees and to non-

employees under this stock plan. The expected term of the options for the three months ended March 31, 2025 includes a grant to a non-employee consultant where the term of the option is five years compared to employee grants that are ten years:


	Three Months Ended March 31,
	2026	2025
Risk-free interest rate	3.81%	4.36%
Expected dividend yield	0%	0%
Expected volatility	111.0%	95.2%
Expected term of options (years)	6.10	3.50

As of March 31, 2026, there was $10.5 million in total unrecognized compensation expense relating to the 2019 Plan, to be recognized over a weighted average period of 2.73 years.

Stock Options Granted Subject to Shares Available

On March 27, 2026, there was a total grant of 177,590 stock options that are subject to shareholder approval to increase the number of shares available for grant under the 2019 Plan. As there are currently insufficient shares available to cover the grant, these amounts are excluded from the shares reserved for future issuance table in Note 6. Of these grants, 126,850 were fully vested upon issuance. The weighted average grant date fair value of all these grants is $8.96. As of March 31, 2026, the stock-based compensation expense associated with these grants was $1.1 million and is recorded in other current liabilities on the Consolidated Balance Sheet until such time they receive shareholder approval and would then be reclassified to Additional Paid in Capital. There is $460,789 of unrecognized stock compensation associated with the unvested grants, to be recognized over a weighted average period of 2.99 years. The assumptions as of the grant date and March 31, 2026 are as follows: the risk free interest rate associated with these grants ranges from 4.06%-4.13%, volatility ranges from 110%-113%, there is no dividend and the expected term ranges from 5-5.8 years.

Stock Appreciation Rights Plan

On July 7, 2025, the Board of Directors of Immunic, Inc. authorized grants, of up to an aggregate of 3,500,000 stock appreciation rights (“SARs”) to the Company’s employees and executive officers. The SARs are settleable in cash until such time in which the Company has sufficient number of shares of common stock to support settlement of the SARs with shares. The Company intends to seek stockholder approval to increase the number of shares available under the Company's 2019 Omnibus Equity Incentive Plan. The exercise price of each SAR is $7.65, the closing price of the common stock on July 7, 2025.

The approximately 3,500,000 SARs granted consisted of five distinct tranches:

•Time Based SARs (TB SARs): There were 500,000 TB SAR's issued which will be exercisable beginning August 1, 2026. The number of TB SARs exercisable is fixed, and their exercisability is only subject to the time vesting condition. The TB SARs vest on August 1, 2026 and expire ten years from the date of grant.

•SARs tied to the exercise of Series A Warrants (SA SARs): The maximum number of SA SARs was capped at up to 1,000,000, but the number of SARs exercisable is determined based on the percentage of Series A Warrants to be exercised out of a total of 8,666,667 shares of Series A Warrants issued. As of March 31, 2026, all of the Series A warrants and SA SARs expired unexercised.

•SARs tied to the exercise of Series B Warrants (SB SARs): The maximum number of SB SARs is capped at up to 1,000,000, but the number of SARs exercisable is determined based on the percentage of Series B Warrants to be exercised out of a total of 8,666,667 shares of Series B Warrants issued. On February 17, 2026, Series B Warrants to purchase up to an aggregate of 5,108,700 shares of Common Stock were surrendered by Participating Series B Holders and cancelled. Series B Warrants to purchase up to an aggregate of 3,357,967 shares of Common Stock remain issued and outstanding. The Potential SARs that were associated with the Series B Warrants that were cancelled were also cancelled. This results in a revised potential issuance of 410,535 Series B SARs instead of 1,000,000. On March 10, 2026, 200,000 of the remaining Series B warrants were exercised for cash resulting in the issuance of 23,077 Series B SARS. The Vesting of SB SARs that were not exercised are subject to service and implied market conditions. The SB SARs vest on August 1, 2026 and expire ten years from the date of grant (see Note 6 "February 2026 Private Placement-Royalty Exchange Agreement").

•SARs tied to the issuance of Tranche Two Shares (T2 SARs): The maximum number of T2 SARs was capped at up to 500,000, but the number of SARs exercisable was determined based on the percentage of Tranche Two Shares issued out of a total of 4,662,005 shares. Vesting of T2 SARs was subject to service, implied performance and market

conditions. These SARs will not be exercised as the second tranche from the January 4, 2024 Financing was not exercised by October 31, 2025.

•SARs tied to the issuance of Tranche Three Shares (T3 SARs): The maximum number of T3 SARs was capped at up to 500,000, but the number of SARs exercisable is determined based on the percentage of Tranche Three Shares issued out of a total of 4,662,005 shares. Vesting of T3 SARs were subject to service, implied performance and market conditions. These SARs will not be exercised as the third tranche from the January 4, 2024 Financing was not exercised by October 31, 2025.

The Company evaluates the classification of the awards for equity or liability treatment based on the terms of the agreement and contemplates whether adequate authorized shares exists to settle the exercise of the SARs with shares. The SARs will be liability classified until the Company receives shareholder approval to increase the number of shares available for issuance under the Plan. If approval is received, the Company will then control the settlement of the SARS in shares and will meet all other criteria to be classified as equity. SARs are currently classified as liability awards and measured at fair value at each reporting date.

The Company’s SARs activity is as follows:


SARs grants	Shares	Weighted average exercise price	Weighted average remaining contractual term (years)	Aggregate intrinsic value
Balance at January 1, 2026	1,623,007	$7.65
SARs granted	—	$—
SARs forfeited or expired	(715,308)	$7.65
SARs exercised	—	$—
Balance at March 31, 2026	907,699	$7.65	9.23	$3,131,563
Exercisable at March 31, 2026	—	$—	—	—

The March 31, 2026 fair value of the SARs is $6.20 per share for TB SARs and $7.27 per share for SB SARs.

For the three months ended March 31, 2026, the Company recognized $1.9 million of compensation expense and corresponding liability of $2.7 million as of March 31, 2026 for the SARs. There was no expense for the three months ended March 31, 2025. As of March 31, 2026, the unrecognized compensation expense is $3.4 million which is expected to be recognized over a weighted average period of 2.2 years.

The Company utilized a Monte Carlo simulation model in conjunction with a Probability-Weighted Expected Return Model (“PWERM”) to estimate the fair value of the SARs liabilities. This valuation model incorporates various assumptions, including stock price volatility, risk-free interest rate, the probability of a corporate transaction, and the expected term of the underlying equity instruments and SARs.

The following table summarizes the key assumptions used in estimating the fair value of the SARs at March 31, 2026 and December 31, 2025:


	March 31, 2026	December 31, 2025
Expected term (years)	1.08-2.96	1.00-2.40
Risk-free interest rate	3.75%-4.21%	3.64%-4.11%
Stock price volatility	80%-115%	65%-115%

Probability (1)	50%-50%	50%-50%
Dividend rate	—%	—%

(1) Scenario probability was based on timing expectations of the Company that a corporate transaction occurring was estimated at 50%; and a corporate transaction not occurring at 50%.

Stock-Based Compensation Expense

Total stock-based compensation expense for all stock awards recognized in the accompanying unaudited condensed consolidated statements of operations is as follows:


	Three Months Ended March 31,
		2026		2025
Research and development		$	1,483,000	$	833,000
General and administrative		2,983,000		1,209,000
Total		$	4,466,000	$	2,042,000

Summary of Equity Incentive Plans Assumed from Vital Therapies, Inc.

Upon completion of the Transaction with Vital Therapies, inc. ("Vital") on April 12, 2019, Vital’s 2012 Stock Option Plan (the “2012 Plan”), Vital’s 2014 Equity Incentive Plan (the “2014 Plan”) and Vital’s 2017 Inducement Equity Incentive Plan (the “Inducement Plan”), were assumed by the Company. All awards granted under these plans have either been forfeited or expired.

There are no longer any shares available for grant under the 2014 Plan as of March 31, 2026.

On September 2017, Vital’s board of directors approved the Inducement Plan, which was amended and restated in November 2017. Under the Inducement Plan 4,625 shares of Vital’s common stock were reserved to be used exclusively for non-qualified grants to individuals who were not previously employees or directors as an inducement material to a grantee's entry into employment within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.

No expense was recorded for the plans assumed from Vital during the three months ended March 31, 2026 and 2025, respectively.

2026 Inducement Equity Compensation Plan

On March 13, 2026, the Board and the Compensation Committee of the Board adopted the Inducement Plan (the “Inducement Plan”), effective as of March 13, 2026, pursuant to which the Company reserved 3,000,000 shares of common stock to be issued exclusively for grants of equity-based awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Marketplace Rules of the Nasdaq Stock Market (“Rule 5635(c)(4)”). The Inducement Plan provides for the grant of equity-based awards in the form of non-qualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards, and dividend equivalent rights. The Inducement Plan was adopted by the Board and the Committee without stockholder approval pursuant to Rule 5635(c)(4). The Company registered the 3,000,000 shares of common stock under a Registration Statement on Form S-8 (File No. 333-294952), filed with the SEC on April 9, 2026.