NOTE 5 – STOCK OPTIONS

Stock Options Issued, Vested and Cancelled

During the three months ended June 30, 2026, the Company issued 5,865,170 stock options under the 2023 Plan. During the three months ended June 30, 2026, stock options under the 2023 Plan to purchase an aggregate of 12,290 shares of common stock, subject to time-based milestone vesting conditions, vested.

During the three months ended June 30, 2025, the Company granted no stock options, had forfeitures of 13,528 stock options and stock options to purchase an aggregate of 4,480 shares of common stock, subject to time-based milestone vesting conditions, vested.

During the six months ended June 30, 2026, the Company granted 5,865,170 stock options, had no forfeitures of stock options. The issued stock options had a strike price equal to $0.841, and a term of 10 years. The stock options are subject to time-based vesting over a term ranging between one to three years. These stock options had a total fair value of approximately $4,665,000, as calculated using the Black-Scholes pricing model with the following assumptions: volatility of 112.33%, discount rate of 3.57%, expected term of 6.5 years, and an exercise price of $0.841. 

During the six months ended June 30, 2025, the Company issued stock options under the 2023 Plan to employees, to purchase an aggregate of 104,433 shares of common stock with a strike price equal to $8.13 per share and a term of ten years. Of the stock options granted, stock options to purchase an aggregate of 37,433 shares of common stock were fully vested at issuance and the remaining stock options are subject to time-based vesting over a term ranging between one to three years. These stock options had a total fair value of approximately $657,000, as calculated using the Black-Scholes pricing model with the following assumptions: volatility of 88.41%, discount rate of 4.20%, expected term of 6.5 years, and an exercise price of $8.13.

Stock-Based Compensation

For the three months ended June 30, 2026 and 2025, total stock-based compensation expense related to the Company’s stock options was approximately $329,000 and $58,000, respectively. For the three months ended June 30, 2026, the Company recognized approximately $291,000 of stock-based compensation related to its stock options within general and administrative expense, and approximately $38,000 within research and development expense on the condensed consolidated statements of operations and comprehensive loss. For the three months ended June 30, 2025, the Company recognized approximately $56,000 of stock-based compensation related to its stock options within general and administrative expense, and approximately $2,000 within research and development expense on the condensed consolidated statements of operations and comprehensive loss.

Total stock-based compensation related to the Company’s stock options was approximately $466,000 and approximately $155,000 for six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, the Company recognized approximately $426,000 of stock-based compensation related to its stock options within general and administrative expense, and approximately $40,000 within research and development expense on the condensed consolidated statements of operations and comprehensive loss. For the six months ended June 30, 2025, the Company recognized approximately $149,000 of stock-based compensation related to its stock options within general and administrative expense, and approximately $6,000 within research and development expense on the condensed consolidated statements of operations and comprehensive loss.

Stock option activity for the six months ended June 30, 2026, was as follows:

As of June 30, 2026, remaining unamortized stock-based compensation expense related to the stock options was $614,000 with 30 months of amortization remaining.