During the six months ended June 30, 2026, 354,074 stock options granted in 2024 were forfeited, with approximately half forfeited due to employee termination and the remaining forfeited due to the related performance condition not being achieved. Additionally, during the six months ended June 30, 2026 the Company granted 1,883,750 awards that vest upon the achievement of specified performance goals, with a portion subject to continued vesting thereafter. As of June 30, 2026, the applicable performance conditions for these awards were not deemed probable, and therefore no compensation expense has been recognized related to these awards.

8. Stock-Based Compensation

2016 Equity Incentive Plan

In March 2016, the Company adopted the 2016 Stock Option and Grant Plan (the “2016 Plan”), which allows the granting of awards in the form of incentive stock options, nonqualified stock options, and stock grants, which may include restricted stock, to eligible employees, outside directors and consultants of the Company. The total number of common stock reserved for grant under the 2016 Plan was 48,749,161 shares as of December 31, 2025 and December 31, 2024, of which 4,475,263 and 1,993,987 shares remained available for future issuance as of December 31, 2025 and 2024, respectively. Shares that are expired, terminated, surrendered, or canceled without having been fully exercised will be available for future awards under the 2016 Plan.

The 2016 Plan is administered by the Company’s board of directors. The terms of stock awards agreements, including type of stock award to be granted, the provisions of each stock award, including the number of shares, vesting requirements, and exercise prices, are determined by the board of directors, and are subject to the provisions of the 2016 Plan. Option awards generally vest over a four-year period and expire after ten years. Certain options provide for accelerated vesting in the event of a change in control, as defined. The exercise price per share for stock options granted may not be less than the fair market value of the common stock at the date of grant.

 

Stock Options

The Company has granted stock options with service-based vesting conditions, performance-based, and with both service and performance-based vesting conditions. The Company typically grants stock options to employees and nonemployees at exercise prices deemed by the Board to be equal to the fair value of the common stock at the time of grant. Stock options typically vest over four years and have a maximum term of ten years.

The Company estimates the fair value of the stock options issued using the Black-Scholes option pricing model on the date of grant. The key assumptions used to apply this pricing model were as follows:

 

The weighted average fair value of options granted during the years ended December 31, 2025 and 2024 was $0.62 and $1.03, respectively.

The following table summarizes option activity under the 2016 Plan for the year ended December 31, 2025:

 

Included within the total stock options outstanding at December 31, 2025, are 2,027,700 stock options to purchase common stock which have either both performance and service-based vesting criteria or performance only vesting criteria (collectively, the “Performance Awards”) and were granted to certain employees and officers during 2023 and 2024. Of the total 2,027,700 Performance Awards outstanding: (i) 1,231,034 outstanding stock options were granted in 2023 and had performance criteria tied to the achievement of three scientific milestones, each followed by two years of service vesting. Expense was recognized when achievement became probable. As of December 31, 2025, all three milestones associated with this grant had either been achieved or partially achieved; (ii) 442,592 outstanding stock options were granted in 2023 and had performance criteria tied to the completion of a strategic transaction, which was achieved upon the close of the Series C Preferred Stock financing in March 2024, and therefore the grant date fair value of the stock options was expensed in full upon achievement of the financing; and (iii) 354,074 outstanding stock options were granted in 2024 and had performance criteria tied to the achievement of strategic milestones of the Company along with service-based vesting conditions. As of December 31, 2025, the performance milestones have not yet been achieved and are not deemed probable of being achieved. Total stock-based compensation expense associated with performance stock options was $0.2 million and $0.7 million during the years ended December 31, 2025 and 2024, respectively.

 

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock.

The aggregate intrinsic value of options exercised for each of the years ended December 31, 2025 and 2024 totaled zero and $0.8 million, respectively. As of December 31, 2025 there was $13.3 million of unrecognized compensation expense, which the Company expects to recognize over a weighted-average period of 2.03 years.

The Company has recorded stock-based compensation expense as follows (in thousands):