STOCK-BASED COMPENSATION

NOTE 7 – STOCK-BASED COMPENSATION

The number of shares authorized and to be issued, as they are disclosed below, have been restated to reflect the Reverse Stock Split effectuated on May 14, 2026.

During the three months ended March 31, 2026, the Company granted stock options to employees and directors under the stock incentive plan (the “2019 Stock Incentive Plan” or the “Plan”), which was amended on March 6, 2026 to authorize an additional 34,151,952 shares of common stock to be available under the plan. On January 26, 2026, the Company granted stock options with a service condition, covering 4,184,750 shares with a total grant-date fair value of $16.9 million.

On March 6, 2026, the Company granted stock options covering 9,959,797 shares. Of the total March 6, 2026 grant, stock options covering 233,805 shares have a service condition and a total grant-date fair value of $1.9 million and stock options covering 2,431,498 shares include both a service condition and performance-based vesting condition tied to an operational milestone and have a total grant-date fair value of $19.6 million. As of March 31, 2026, the performance condition related to this award was probable of being achieved, and therefore, related stock-based compensation expense was recognized during the three months ended March 31, 2026. The remaining stock options covering 7,294,494 shares, comprised of three tranches split evenly, vest upon the occurrence of a) the completion of an IPO within a specific timeframe, b) a performance-based vesting condition tied to operational milestones, c) the achievement of either a market-based condition or another performance-based condition tied to operations and d) a service condition. The total grant-date fair value was $11.3 million, $16.7 million, and $13.6 million for each of the respective tranches. The stock options contain a performance condition which was not considered probable of being achieved as of March 31, 2026, as all three tranches are tied to the IPO performance condition and an IPO is not considered probable until consummated. Accordingly, no stock-based compensation expense has been recognized related to these awards during the three months ended March 31, 2026. The Company will continue to reassess the probability of achieving these conditions at each reporting period and will recognize stock-based compensation expense when such conditions are deemed probable.

The grant-date fair value of the stock options with a market condition was estimated using the following Black-Scholes option-pricing model assumptions:


Fair value of common stock	$	8.49
Expected volatility	75.0		%
Expected term (in years)	5-10
Risk-free interest rate	3.7% - 4.1%
Expected dividend yield	0.0		%

Stock-based Compensation Expense

During the three months ended March 31, 2026 and 2025, the Company recorded $2.6 million and $0.5 million, respectively, as stock-based compensation in General and administrative expense in the Condensed Consolidated Statements of Operations.