Note 7. Stockholders’ equity

Capital stock

The Company is authorized to issue 110,000,000 shares of capital stock, consisting of 100,000,000 shares of Common Stock and 10,000,000 shares of undesignated Preferred Stock, whose rights and privileges will be defined by the Board of Directors when a series of Preferred Stock is designated.

Common Stock sold under ATM

On August 12, 2024, the Company filed a shelf registration statement with the SEC to facilitate the issuance of its Common Stock and entered into an At-the-Market Offering Agreement (the “ATM Agreement”) with Rodman & Renshaw LLC, under which the Company may offer and sell shares of its Common Stock, with an aggregate offering amount sold of up to $19,268,571. On September 24, 2024, the Company filed a prospectus supplement to amend the shelf registration statement to update the maximum amount eligible to be sold under the ATM Agreement to $75 million.

During the three and six months ended June 30, 2026, the Company did not sell or issue any shares of Common Stock under ATM Agreement.

During the three months ended June 30, 2025, under the ATM Agreement, the Company has sold and issued 321,486 shares of Common Stock at an average price per share of $1.08 and received net proceeds of approximately $324,000, after deducting commissions and other fees of approximately $22,000. During the six months ended June 30, 2025, under the ATM Agreement, the Company has sold and issued 324,288 shares of Common Stock at an average price per share of $1.08 and received net proceeds of approximately $327,000, after deducting commissions and other fees of approximately $22,000.

Common Stock issued upon stock option exercise

There were no stock options exercised during the three and six months ended June 30, 2026 and 2025.

Common Stock issued for vested RSUs

On March 29, 2026, Compensation Committee and the Board of Directors determined that a Phase I clinical trial milestone had been achieved. As a result, the Company issued 83,500 fully vested restricted stock units (“RSU”) to its Chairman and Chief Executive Officer, under the Company’s Executive Incentive Compensation Plan (as defined below) and the 2022 Omnibus Incentive Plan (as defined below). The RSUs vested immediately, and 83,500 shares of Common Stock were issued, with $86,005 recognized as compensation expense on the vesting date.

During the year ended December 31, 2024, the Company granted 500,000 RSUs to its Chairman and Chief Executive Officer under the 2022 Omnibus Incentive Plan, with an aggregate grant-date fair value of approximately $0.6 million. The RSUs vested 50% on February 12, 2025 and 50% on the six-month anniversary of the grant date. Upon vesting, the Company issued 250,000 shares of common stock during the three months ended March 31, 2025 and an additional 250,000 shares of common stock during the three months ended June 30, 2025.

MIRA PHARMACEUTICALS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2026 AND 2025

In June 2022, the Company’s Board of Directors adopted, and its shareholders approved, the Company’s 2022 Omnibus Incentive Plan, as amended and restated in August 2023, (“2022 Omnibus Plan”). The 2022 Omnibus Plan authorizes the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to the Company’s employees and any of its parent and subsidiary corporations’ employees, and for the grant of non- statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to the Company’s employees, directors, and consultants and any of its future subsidiary corporations’ employees and consultants. On September 11, 2025, the Company held its 2025 Annual Meeting of Shareholders (the “2025 Annual Meeting”) in which it was voted upon to increase the shares of Common Stock reserved under the plan from 5,000,000 shares to 8,000,000 shares. In addition, the number of shares available for issuance under the 2022 Omnibus Plan includes an annual increase on the first day of each fiscal year equal to the lesser of (a) 500,000 shares, (b) 5.0% of the outstanding shares of all classes of its Common Stock as of the last day of the immediately preceding fiscal year, or (c) such other amount as the Company’s Board of Directors may determine.

As of June 30, 2026, the 2022 Omnibus Plan provides that 9,280,939 shares of the Common Stock are reserved for issuance under the 2022 Omnibus Plan, with 950,764 shares of Common Stock remaining available for issuance under the 2022 Omnibus Plan.

Stock-based compensation

The fair value of each option award is estimated on the grant date using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Historically, the Company estimated expected price volatility based on the historical volatilities of a peer group as the Company did not have a multi-year trading history for its shares. Industry peers consist of several public companies in the biotech industry similar to the Company in size, stage of life cycle, and product indications. In September 2025, the Company commenced using the historical volatility of its shares as an estimate of expected share price volatility, as sufficient trading activity of the Company’s common stock had developed to provide a reasonable basis for estimating volatility.

Expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus contract term. The risk-free rate is based on the 5-year U.S. Treasury yield curve in effect at the time of grant. The Company recognizes forfeitures as they occur.

MIRA PHARMACEUTICALS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2026 AND 2025

The following table summarizes the Company’s employee and non-employee stock option activity under the 2022 Omnibus Plan for the following period:

 Schedule of option activity

On June 12, 2026, the Company granted an aggregate of 200,000 stock options to its directors. The options vest in two equal installments, with 50% vesting six months from the grant date and the remaining 50% vesting twelve months from the grant date. The options have a contractual term of ten years and were valued at approximately $180,000 on the grant date.

The stock options granted on June 12, 2026 were valued using the Black-Scholes option-pricing model with the following assumptions: a stock price of $0.94, an exercise price of $0.94, a risk-free interest rate of 4.21%, expected volatility of 171.78%, an expected dividend yield of 0%, and an expected term of 5.0 years.

The Company recognized $21,876 and $489,566 in stock-based compensation which includes compensation for stock options and vested RSUs in the three months ended June 30, 2026 and 2025, respectively. The Company recognized approximately $43,461 and $1,364,378 in stock-based compensation which includes compensation for stock options and vested RSUs in the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, there was approximately $171,000 of unrecognized compensation cost related to unvested stock options granted under the 2022 Omnibus Plan that is expected to be recognized over the 0.71 years.

Restricted Stock Units

On March 26, 2025, the Compensation Committee of the Company adopted the Company’s Executive Incentive Compensation Plan (the “EICP”) for Erez Aminov, its Chairman and Chief Executive Officer. Under the EICP, Mr. Aminov is eligible for certain long-term awards of up to 500,000 performance-based and market condition-based restricted stock units of Common Stock based upon the Company reaching certain market capitalization values and the progress of the Company’s drug candidates. All awards under the EICP are subject to the approval of the Board of Directors and its Compensation Committee, and are not considered granted until such time. Furthermore, the Board of Directors and the Compensation Committee, each in its sole discretion, generally retain the right to amend, supplement, supersede or cancel any awards under the EICP for any reason, and reserve the right to determine whether and when to pay out any bonus amounts pursuant to or outside of the EICP, regardless of the achievement of the performance targets.

MIRA PHARMACEUTICALS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2026 AND 2025

On March 29, 2026, the Board of Directors and the Compensation Committee determined that certain milestone in Company’s Phase I clinical trial had been achieved. As a result, on March 29, 2026, the grant date, the Company issued Mr. Aminov $80,753 in cash and 83,500 vested restricted stock units, with the restricted stock units having an aggregate fair market value of $86,005.

The following is RSU activity during the three and six months ended June 30, 2026:

 Schedule of restriscted stock unit activity

Warrants

In connection with various transactions and the initial public offering of the Company, the Company issued warrants. Warrant activity for the six months ended June 30, 2026 is summarized below:

 Schedule of warrant activity