At Closing, the 2021 Long-Term Incentive Plan, (the “2021 Plan”), and the 2021 Employee Stock Purchase Plan, (the “ESPP”), became effective. Under the 2021 Plan, the Company can grant non-statutory stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, performance awards and other forms of equity-based awards. Under the ESPP, when and if implemented, eligible employees will be permitted to purchase shares of Common Stock at the lower of 85% of the closing trading price per share of Common Stock on the first day of the offering period or 85% of the closing trading price per share on the exercise date, which will occur on the last day of each offering period.

The 2021 Plan and ESPP provide that on January 1 of each year, the share reserve under the 2021 Plan and the ESPP will automatically increase in an amount equal to the lesser of (a) 5% and 1%, respectively, of the number of shares of Common Stock outstanding on December 31 of the preceding year and (b) a number of shares of Common Stock determined by the Company’s board of directors. The Company’s board of directors determined that there would be no automatic increase in the number of shares reserved under the 2021 Plan on January 1, 2023. The 2021 Plan share reserve automatically increased on January 1, 2024 by 5,183,686 shares, which was equivalent to 5% of the number of shares of Common Stock outstanding on December 31, 2023. The 2021 Plan share reserve automatically increased on January 1, 2025 by 6,501,375 shares, which was equivalent to 5% of the number of shares of Common Stock outstanding on December 31, 2024. The 2021 Plan share reserve increased on January 1, 2026 by 4,000,000 shares, as determined by the Company’s board of directors, which was less than 5% of the number of shares of Common Stock outstanding on December 31, 2025. Since the inception of the ESPP, the Company’s board of directors has determined that there would be no automatic increase in the number of shares reserved under the ESPP. Effective April 17, 2025, the Company’s board of directors reduced the number of shares reserved under the ESPP to zero shares of Common Stock. As of March 31, 2026, 9,270,695 shares of Common Stock were available under the 2021 Plan.

Prior to the Closing, Legacy Humacyte had two equity incentive plans, the 2015 Omnibus Incentive Plan, as amended, (the “2015 Plan”), and the 2005 Stock Option Plan (the “2005 Plan”). As a result of the Merger, after the Closing no further awards were granted under either the 2015 Plan or the 2005 Plan. All awards previously granted and outstanding as of the effective date of the Merger were adjusted to reflect the impact of the Merger as set forth in the Merger Agreement, but otherwise retained their original terms. The shares underlying any award granted under the 2021 Plan or the 2015 Plan that are forfeited, cancelled or reacquired by the Company prior to vesting, that expire or that are paid out in cash rather than shares will become available for grant and issuance under the 2021 Plan. As of March 31, 2026, 16,176,340 and 3,124,566 shares of Common Stock remain reserved for outstanding options issued under the 2021 Plan and the 2015 Plan, respectively, and there were no shares of Common Stock outstanding under the 2005 Plan. The Company has sufficient authorized and unissued shares to issue Common Stock in satisfaction of any outstanding awards and any awards available for grant under the 2021 Plan.

The Company’s stock option plans allow for the grant of awards that the Company believes aid in aligning the interests of award recipients with those of its stockholders. The Company’s board of directors or compensation committee determines the specific terms of equity incentive grants, including the exercise price per share and vesting period for option awards. Option awards are granted with an exercise price equal to the fair market value of the Common Stock at the date of grant.

The Company has granted options that include either a service-based or performance-based vesting condition, or both, and a 10-year contractual term. The service-based vesting condition for the plans is generally satisfied over 0 to 48 months from the date of grant. The performance-based vesting conditions are satisfied upon the attainment of certain product development milestones.

Option awards under the Company’s option plans generally provide for accelerated vesting of the unvested portions of any option award in the event of an involuntary termination, as such term is defined in the relevant stock option agreement, of a grantee’s employment during the period that commences 30 days prior to the effective date of a corporate transaction and that ends 12 months following the effective date of such transaction. Additionally, the Company’s board of directors may, in its sole discretion, accelerate the vesting of any unvested stock options in the event of a corporate transaction.

The Company estimated the fair value of the stock options on the date of grant using the following assumptions in the Black-Scholes option-pricing model:


	Three Months Ended March 31,
	2026		2025
Estimated dividend yield	0%			0	%
Expected share price volatility (weighted average and range, if applicable)	99.1% (98.9% to 99.8%)			92.2	%
Risk-free interest rate (weighted average and range, if applicable)	3.91% (3.89% to 3.91%)			4.45	%
Expected term of options (in years)		6.25	6.25

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Fair Value of Common Stock. The fair value of the Common Stock has been determined based on the closing price of the shares on Nasdaq.

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Expected Term. The expected term represents the period that stock options are expected to be outstanding. The Company calculated the expected term using the simplified method for options, which is available where there is insufficient historical data about exercise patterns and post-vesting employment termination behavior. The simplified method is based on the vesting period and the contractual term for each grant, or for each vesting-tranche for awards with graded vesting. The mid-point between the vesting date and the maximum contractual expiration date is used as the expected term under this method. For awards with multiple vesting-tranches, the times from grant until the mid-points for each of the tranches may be averaged to provide an overall expected term.

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Expected Volatility. The expected volatility was determined based on a blended approach using the historical share volatility of the Common Stock and that of several publicly traded peer companies over a period of time equal to the expected term of the options, as the Company has a limited trading history. For purposes of identifying these peer companies, the Company considered the industry, stage of development, size and financial leverage of potential comparable companies.

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Risk-Free Interest Rate. The risk-free interest rate was based on the yields of U.S. Treasury zero-coupon securities with maturities similar in duration to the expected term of the options.

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Expected Dividend Yield. The Company has not paid dividends on its Common Stock nor does it expect to pay dividends in the foreseeable future. Accordingly, the Company has estimated the dividend yield to be zero.

A summary of option activity under the Company’s stock option plans during the three months ended March 31, 2026 is presented below:


	Number of Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Options outstanding at December 31, 2025		18,004,681		$	4.25		7.7	$	—
Granted		204,100			1.06
Exercised		—			0.00
Forfeited		(893,265	)		4.19
Options outstanding at March 31, 2026		17,315,516		$	4.21		7.8	$	—
Vested and exercisable, March 31, 2026		8,490,916		$	5.23		6.7	$	—
Vested and expected to vest, March 31, 2026		17,315,516		$	4.21		7.8	$	—

The weighted-average grant-date fair value per share of options granted during the three months ended March 31, 2026 was $0.86.

In November 2025, the Company granted stock options to certain members of executive management under the 2021 Plan. The stock options have an exercise price of $1.23 per share, equal to the closing price of Common Stock at the grant date. The first one-third of the options became exercisable on February 14, 2026, after which one-third of the options will become exercisable on November 16, 2026, and the remaining one-third will become exercisable on November 16, 2027.

In November 2025, the Company granted RSUs to certain members of executive management and certain non-executive employees under the 2021 Plan. Each RSU represents a contingent right to receive one share of Common Stock upon vesting.

The RSUs vest based on continued service. The first 50% of the RSUs will vest on May 15, 2026, and the remaining 50% will vest on May 15, 2027. Unvested RSUs are forfeited upon termination of service. The Company does not issue shares or pay dividend equivalents with respect to RSUs until the awards vest.

The following table summarizes the Company’s RSU activity for the three months ended March 31, 2026:


	Number of Shares		Weighted Average Grant Date Fair Value
Grants outstanding at December 31, 2025		1,985,390	$	1.23
Granted		—
Exercised		—
Forfeited		—
Grants outstanding at March 31, 2026		1,985,390	$	1.23

Stock-based compensation expense is included in research and development expense and general and administrative expense in the consolidated statements of operations and comprehensive (loss) income based on where the associated employee compensation costs are generally classified.

The following table shows a summary of stock-based compensation expense included in the condensed consolidated statements of operations and comprehensive (loss) income:


	Three Months Ended March 31,
($ in thousands)	2026		2025
Stock options	$	2,559	$	2,487
Restricted stock units		611		—
Total stock-based compensation expense	$	3,170	$	2,487
Research and development		1,228		1,149
General and administrative		1,942		1,338
Total stock-based compensation expense	$	3,170	$	2,487

No stock-based compensation was capitalized to inventory during the three months ended March 31, 2026. As of March 31, 2026, total unrecognized stock-based compensation cost related to stock options was $21.0 million, which is expected to be recognized over a weighted-average period of 2.3 years. As of March 31, 2026, total unrecognized stock-based compensation cost related to unvested RSUs was approximately $1.5 million, which is expected to be recognized over a weighted-average period of approximately 0.6 years.