The Company’s stock-based compensation generally includes service-based restricted stock units (“RSUs”), stock options, and market-based performance RSUs (“PSUs”).

During the six months ended June 30, 2026, the Company granted 7,209,608 RSUs at a weighted-average grant date fair value of $1.71 per RSU, and the Company granted 254,200 PSUs at a weighted-average grant date fair value of $1.38 per PSU. The Company granted no stock options during the six months ended June 30, 2026. During the six months ended June 30, 2025, the Company granted 108,600 stock options at a weighted-average grant date fair value of $1.02 per stock option, and the Company granted 89,400 RSUs at a weighted-average grant date fair value of $1.13 per RSU. The Company granted no PSUs during the six months ended June 30, 2025.

The Company offers its employees an opportunity to participate in its stockholder-approved Palisade Bio, Inc. 2021 Amended and Restated Employee Stock Purchase Plan (the "ESPP"). All employees are eligible to participate in the ESPP while employed by the Company. The ESPP permits eligible employees to purchase common stock through payroll deductions, which may not exceed $25,000 in a calendar year, or 5,000 shares of the Company's common stock each offering period, as defined in the ESPP, at a price equal to 85% of the fair value of the Company's common stock at the beginning or end of the offering period, whichever is lower. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code.

Compensation expense associated with the ESPP was approximately $10,000 and $16,000 in the three and six months ended June 30, 2026, respectively, and approximately $9,000 and $21,000 in the three and six months ended June 30, 2025, respectively.

The allocation of stock-based compensation for the Company's equity-based awards is as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025

Research and development expense	$	2,072	$	25	$	4,035	$	48
General and administrative expense		2,703		35		5,031		69
Total	$	4,775	$	60	$	9,066	$	117

As of June 30, 2026, the unrecognized compensation cost related to outstanding stock options was approximately $0.1 million, which is expected to be recognized over a weighted-average period of approximately 1.46 years, and the unrecognized compensation cost related to outstanding RSUs and PSUs was approximately $46.9 million, which is expected to be recognized over a weighted-average period of approximately 2.40 years.