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


	Three Months Ended March 31,
	2026		2025
Research and development expense	$	924	$	663
Selling, general and administrative expense		6,499		4,635
Total	$	7,423	$	5,298

During the three months ended March 31, 2026 and 2025, $0.4 million and $0.2 million of stock compensation expense was capitalized into inventory, respectively.

As of March 31, 2026, the total unrecognized stock-based compensation expense related to outstanding employee options was $65.0 million, which is expected to be recognized over a remaining weighted-average period of approximately 2.7 years.

As of March 31, 2026 and December 31, 2025, there were zero and 1,382 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 no shares of common stock purchased under the ESPP during the three months ended March 31, 2026 and 2025.

As of March 31, 2026, 30,701,662 shares were authorized under the 2016 and 2020 Equity Incentive Plans, of which 9,163,881 shares were available for future grant, and 16,401,521 shares were outstanding. As of March 31, 2026, 6,634,333 shares were authorized under the 2018 Equity Incentive Plan, of which 297,345 shares were available for future grant, and 3,923,795 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 one- to four-year period. 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 three months ended March 31, 2026 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, 2025		16,744,639		$	7.66
Granted		3,695,140		$	11.47
Exercised		(7,829	)	$	7.94
Forfeited		(106,634	)	$	13.13
Outstanding at March 31, 2026		20,325,316		$	8.32		7.5	$	35,565
Exercisable at March 31, 2026		11,443,597		$	6.61		6.5	$	32,164

The exercisable shares subject to options outstanding at March 31, 2026 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 March 31, 2026. The aggregate intrinsic value of options exercised during the three months ended March 31, 2026 and 2025 was less than $0.1 million and $1.3 million, respectively.

The weighted-average grant date fair value per share of option grants for the three months ended March 31, 2026 and 2025 was $8.41 and $8.06, respectively. The total fair value of shares vested during the three months ended March 31, 2026 and 2025 was $6.2 million in each period.

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


	Three Months Ended March 31,
	2026	2025
Expected term (in years)	6.0 - 6.1	6.0 - 6.1
Expected volatility	84.6% - 85.2%	86.0% – 87.3%
Risk-free interest rate	3.7% - 4.0%	4.0% – 4.4%
Expected dividend yield	0%	0%

The fair value of stock options was determined using the Black-Scholes assumptions below.

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.

Expected Dividend Yield. The Company has never paid dividends on its common stock and does not anticipate paying any dividends in the foreseeable future. Therefore, the Company uses an expected dividend yield of zero.