10. Share-Based Compensation

The Company amended and restated its 2024 Equity Incentive Plan (the “A&R 2024 Plan”), effective as of June 3, 2026 upon approval by the stockholders of the Company.

The amendments to the Company’s 2024 Equity Incentive Plan included (1) a one-time increase to the number of shares of common stock reserved for issuance under the A&R 2024 Plan of 3,231,638 shares, (2) an amendment to the annual “evergreen” provision to remove the annual limit of 2,407,100 shares, while maintaining the annual increase at 5% of the Company’s outstanding shares, and (3) a limit (in addition to the share reserve limit under the A&R 2024 Plan) on the number of shares that can be issued as incentive stock options under the A&R 2024 Plan.

Stock Options

All outstanding options as of September 30, 2026 are expected to vest, subject to forfeitures.

The aggregate intrinsic value is calculated as the difference between the exercise price and the estimated fair value of the Company’s Common Stock as of September 30, 2026.

Option Repricing

On August 7, 2026 (the “Effective Date”), the Company implemented an option repricing (the “Option Repricing”). The Option Repricing generally applied to all outstanding and unexercised stock options to purchase shares of Common Stock granted prior to January 1, 2025, under the A&R 2024 Plan or the Company’s 2021 Stock Incentive Plan (each, a “Plan”), with an exercise price per share equal to or greater than $10.00, held by certain employees and consultants (such options, the “Eligible Options”), including each of the Company’s named executive officers, as of the Effective Date. The total number of vested and unvested Shares underlying all repriced options was approximately 1.7 million shares.

The new exercise price per share for repriced options is $4.14, the closing price of the Company’s Common Stock on the Effective Date. However, if the optionee exercises his or her repriced Eligible Option without achieving the retention requirement (as discussed below), such optionee will be required to pay a premium exercise price that is equal to the original exercise price per share of such Eligible Option. There were no changes made to any Eligible Options’ term to expiration, vesting criteria, or underlying number of shares, and each repriced Eligible Option remains subject to the terms of the applicable Plan and award agreement. For purposes of the repricing, the retention requirement (“Retention Period”) refers to the optionee being required to remain a service provider through (i) the date 18 months following the Effective Date, in the case of certain members of senior management including each of the Company’s named executive officers, or (ii) the one-year anniversary of the Effective Date, in the case of other employees or service providers. However, the retention requirement nonetheless will be considered satisfied for an optionee if, before the expiration of such applicable period, (a) the Company’s change in control (as defined in the Plan applicable to the optionee’s repriced option) occurs while the optionee is providing services or (b) the optionee’s service terminates due to his or her death or disability.

The Option Repricing resulted in $1.6 million of incremental cost, which was calculated using the Black-Scholes option pricing model, which will be recognized on a straight-line basis over the Retention Period of 12 or 18 months. Of the incremental compensation cost, $0.2 million was recognized in the three months ended September 30, 2026. The incremental cost is included in research and development expense and general and administrative expense on the condensed consolidated statements of operations and comprehensive loss, and which is reflected in the Share-Based Compensation Expense table below.

Performance-based Restricted Stock Units (PSUs)

In August 2026, the Company granted PSUs. The number of shares that ultimately may be issued under these awards is determined in part based on the achievement of certain performance goals. The PSUs consist of four tranches, with the vesting of each tranche subject to both achievement, within a specified performance period, of a performance goal established by the Compensation Committee and a service requirement. The performance goals consist of various internal research, clinical and financial targets to be achieved over specified performance periods, through December 31, 2028.

As of September 30, 2026, the Company concluded that achievement of the performance conditions associated with each of the four PSU tranches was not probable. As of September 30, 2026, unrecognized stock-based compensation expense related to performance goals evaluated as not probable of achievement totaled $3.1 million. Accordingly, no compensation expense was recognized from the August 2026 grant date through September 30, 2026.

Restricted Stock Units (RSUs)

2024 Employee Stock Purchase Plan

In October 2024, the Board adopted the 2024 Employee Stock Purchase Plan (the “2024 ESPP”), which became effective immediately upon completion of the Merger. The Company recorded approximately $56 and $144 thousand of share-based compensation expense during the three and nine months ended September 30, 2026, respectively, related to the 2024 ESPP. The Company recorded approximately $62 and $117 thousand of share-based compensation expense during the three and nine months ended September 30, 2025, respectively, related to the 2024 ESPP, which is reflected in the Share-Based Compensation Expense table below.

Share-Based Compensation Expense