7. Stock-based Compensation

2023 Equity Incentive Plan

The Company adopted its 2023 Equity Incentive Plan (the “2023 Plan”), which became effective at the closing of the Merger and replaced the Company’s 2020 Equity Incentive Plan (“2020 Plan”) on the effective date of the Merger. As of the effective date of the Merger, there were 1,000,000 shares of the Company’s common stock available for grant under the 2023 Plan. In addition, the share reserve is subject to annual increases each January 1 for the first ten years following approval of the 2023 Plan of up to 5% of shares of the Company’s common stock outstanding (or a lesser number determined by the Company’s board of directors). Effective January 1, 2024, the shares reserved for issuance under the 2023 Plan was increased by 287,725 shares. Effective March 28, 2024, the Board approved an increase of 1,500,000 shares of the Company’s common stock reserved under the 2023 Plan, which was subsequently approved by the stockholders of the Company on August 27, 2024. Effective on January 1, 2025, the shares reserved for issuance under the 2023 Plan was increased by 674,095 shares. On April 23, 2025 the Board approved an increase of 600,000 shares of the Company’s common stock reserved for issuance under the 2023 Plan, which was subsequently approved by the stockholders of the Company on June 24, 2025. Effective on January 1, 2026, the shares reserved for issuance under the 2023 Plan was increased by 771,870 shares. As of June 30, 2026, 5,543 options have been returned to the 2023 Plan and 79,935 shares of the Company’s common stock were available for grant under the 2023 Plan.

2023 Employee Stock Purchase Plan

The Company adopted the 2023 Employee Stock Purchase Plan (the “2023 ESPP”) which became effective at the closing of the Merger. As of the effective time of the Merger, there were 65,000 shares of the Company’s common stock reserved for issuance under the 2023 ESPP. In addition, the share reserve is subject to annual increases each January 1 for the first ten years following approval of the 2023 ESPP of the lesser of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, (ii) 195,000 shares of the Company’s common stock, or (iii) such lesser number of shares of the Company’s common stock as determined by the Company’s board of directors. An annual increase of 134,819 and 154,374 shares of the Company’s common stock was automatically added to the share reserve under the 2023 ESPP on January 1, 2025 and 2026, respectively. As of June 30, 2026, 411,738 shares of the Company’s common stock were available for grant under the 2023 ESPP.

As of June 30, 2026, no shares have been issued under the 2023 ESPP.

There were no options exercised and 732,500 granted during the six months ended June 30, 2026. The weighted-average fair value of options granted during the six months ended June 30, 2026 and 2025 was $0.54 and $1.31, respectively. The total fair value of shares vested was $1.1 million and $1.6 million for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, stock-based compensation not yet recognized is $3.9 million, which the Company expects to recognize over an estimated weighted-average term of 2.0 years.

Restricted Stock Units (“RSUs”)

The fair value of RSUs is determined on the date of grant based on the market price of the Company’s common stock on that date. The aggregate grant date fair value of RSUs vested during the six months ended June 30, 2026 was $17,500.

Stock-based Compensation Expense

Common Stock Reserved for Future Issuance