10. Stock-Based Compensation

The Company uses equity-based compensation programs to provide long-term performance incentives for its employees, directors and consultants. These incentives consist primarily of stock options and restricted stock grants.

In January 2017 and October 2018, the Company's Board of Directors approved the LB Pharmaceuticals Inc 2017 Stock Incentive Plan ("2017 Plan") and the LB Pharmaceuticals Inc 2018 Stock Incentive Plan ("2018 Plan"), respectively. No additional awards will be granted under the 2017 Plan or the 2018 Plan. As of both June 30, 2026 and December 31, 2025, there were 2,150 and 20,234 shares outstanding under the 2017 Plan and 2018 Plan, respectively.

In August 2023, the Company's Board of Directors approved the LB Pharmaceuticals Inc 2023 Stock Incentive Plan ("2023 Plan"). No additional awards will be granted under the 2023 Plan. As of June 30, 2026 and December 31, 2025, there were 391,818 and 397,385 shares outstanding under the 2023 Plan, respectively.

In September 2025, the Company’s stockholders approved the LB Pharmaceuticals Inc 2025 Equity Incentive Plan (“2025 Plan”). The 2025 Plan authorizes the issuance of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and performance awards. Initially, the maximum number of shares issuable under the 2025 Plan was 2,907,335 shares. In addition, the number of shares reserved for issuance under the 2025 Plan will increase on January 1 of each calendar year, beginning on January 1, 2026 and continuing through January 1, 2035, by an amount equal to 5% of the total number of fully diluted shares outstanding on December 31 of the immediately preceding year, or a lesser number of shares as determined by the Board of Directors. On January 1, 2026, the shares reserved for issuance under the 2025 Plan increased by 1,400,197 shares pursuant to this provision. The maximum number of shares of common stock that may be issued upon the exercise of incentive stock options under the 2025 Plan is 8,722,005. As of June 30, 2026 and December 31, 2025, there were 2,279,906 and 1,882,871 shares outstanding under the 2025 Plan, respectively, and 1,610,796 and 605,412 shares were available for future issuance, respectively.

During the year ended December 31, 2025, the Company granted employees 285,000 stock options as an inducement material to the acceptance of an offer of employment in accordance with Nasdaq Listing Rule 5635(c)(4). During the six months ended June 30, 2026, the Company granted employees an additional 315,000 stock options as inducements under Nasdaq Listing Rule

5635(c)(4). On March 26, 2026, the Company filed a registration statement on Form S-8 to register the shares of common stock underlying the inducement awards.

Stock Options

The stock options granted in the six months ended June 30, 2026 and 2025 vest based on one of the following schedules: (i) 25% on the first anniversary of grant date with the remaining 75% to vest in 36 equal monthly installments thereafter through the fourth anniversary of the grant date, (ii) vesting in three equal annual installments through the third anniversary for certain independent board member grants, or (iii) 100% vesting on the first anniversary of the grant date for certain independent board member grants. All stock options expire ten years from the grant date. The assumptions used to determine the fair value of stock options granted were as follows:

The weighted average grant date fair value of the stock options granted during the six months ended June 30, 2026 was $19.20. The weighted average grant date fair value of the stock options granted during the six months ended June 30, 2025 was $25.94.

As of June 30, 2026, there was $36.1 million unrecognized stock-based compensation expense which is expected to be recognized over a weighted average period of 3.12 years. There were no stock options exercised or forfeited during the three and six months ended June 30, 2025 .

There were no realized tax benefits for the three and six months ended June 30, 2026 and 2025 .

Restricted Stock

The Company did not grant any restricted stock during the three and six months ended June 30, 2026 and 2025.

Restricted stock awards vest over the period in which the related services are rendered, which may range from immediate vesting to up to 36 months. Certain awards alternatively vest upon the consummation of the Company’s first underwritten public offering under the Securities Act of 1933, or on the six month anniversary of the public offering.

As of June 30, 2026, the Company had unrecognized compensation expense related to such shares of less than $0.01 million.

Stock Option Modifications

In June 2026, the Company entered into a separation and consulting agreement (the “Transition Agreement”) in connection with the resignation of its former Chief Medical Officer (“Former CMO”). Pursuant to the original terms of the Former CMO’s stock option awards, the outstanding stock options continue to vest as long as services are provided to the Company under the Transition Agreement through the end of the transition period. In the event that the Former CMO complies with her obligations under the Transition Agreement, then 35% of the Former CMO’s unvested stock options shall vest as of the end of the transition period. The Company determined the accelerated vesting was a stock option modification under ASC 718, Compensation - Stock Compensation and the consulting services outlined in the Transition Agreement are not substantive. As a result, the Company determined the fair market value of all stock options expected to vest over the duration of the Transition Agreement as of the modification date using the Black-Scholes option-pricing model and recorded a one-time expense of $1.1 million, included in research and development expenses in the accompanying unaudited condensed statements of operations.

Effective June 3, 2026, the term of one of the members of the Company’s board of directors, Zachary Prensky, expired upon the conclusion of the Company’s 2026 annual meeting of stockholders. In connection with the expiration of his term as a director, the Company also entered into an amendment to the transition, consulting, and separation agreement with Mr. Prensky, effective June 3, 2026. Pursuant to the original terms of his stock option awards, Mr. Prensky’s outstanding stock options will continue to vest regardless of the level of services provided to the Company under the transition, consulting, and separation agreement as a consultant. In accordance with ASC 718, Compensation - Stock Compensation the Company determined there was a modification of options granted for services as a member of the board of directors. The modification is based on a reduction in the level of required service and as a result, determined the fair market value of these outstanding stock options as of the modification date using the Black-Scholes option-pricing model and recorded a one-time expense of $0.8 million, included in general and administrative expenses in the accompanying unaudited condensed statements of operations.

2025 Employee Stock Purchase Plan

In September 2025, the Company adopted the 2025 Employee Stock Purchase Plan (“ESPP”), which became effective in connection with the Company’s IPO. A total of 250,000 shares of common stock were initially reserved for issuance under the ESPP. On January 1, 2026, the number of shares of common stock available for issuance under the ESPP increased by 280,039 shares as a result of the automatic increase provision of the ESPP. The Company may hold one or more offering periods each year during which employees will be able to purchase shares under the ESPP through payroll deductions made over the term of the offering. The per-share purchase price at the end of each offering period is no less than the lesser of 85% of the closing

price of the Company's common stock on the offering date or on the applicable purchase date. No shares were issued under the ESPP during the six months ended June 30, 2026.