Note 7. Equity Incentive Plans

In connection with the Reverse Merger, the Company stockholders approved the 2024 Equity Incentive Plan (the “2024 Plan”) on December 13, 2024. The 2024 Plan provides for the grant of incentive stock options, nonqualified stock options, and stock awards, any of which may be performance-based, and for incentive bonuses, which may be paid in cash, Common Stock or a combination thereof.

On June 10, 2026, the Company stockholders approved Amendment No. 1 to the 2024 Plan, which increased the number of shares reserved for issuance under the 2024 Plan by 750,000 shares. Accordingly, the number of shares reserved for issuance under the 2024 Plan is equal to 4,205,433 shares of Common Stock as of June 30, 2026.

As of June 30, 2026, 2,794,172 options were outstanding under the 2024 Plan.

In connection with the Reverse Merger, all of the options outstanding under the Company’s 2019 Equity Incentive Plan (the “2019 Plan”) were adjusted with respect to the number of shares and exercise price to reflect the Exchange Ratio. As of June 30, 2026, 477,811 shares of Common Stock were outstanding under the 2019 Plan and no further grants will be made under the 2019 Plan.

For incentive stock options and non-statutory stock options, the option exercise price may not be less than 100% of the estimated fair value on the date of grant. Options granted to employees typically vest over a four-year period but may be granted with different vesting terms. The options expire ten years from the grant date.

The aggregate intrinsic value of options outstanding and options exercisable as of June 30, 2026 was $396.8 million and $155.8 million, respectively.

As of June 30, 2026, there was approximately $55.2 million of unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a remaining weighted-average service period of 2.75 years.

Performance Stock Unit and Restricted Stock Unit Activity

The Company grants time-based restricted stock unit (“RSU”) awards and performance-based restricted stock unit (“PSU”) awards to certain employees. RSU awards vest over a four-year period subject to the employee’s continued employment or service with the Company through the vesting date. PSU awards have a performance period of one year and vest depending on the Company’s achievement of predetermined performance goals. For the three and six months ended June 30, 2026, the Company recorded $0.8 million and $5 thousand of stock compensation expense for PSUs and RSUs, respectively, included in general and administrative expense in the statement of operations.