Shareholders' Equity

3 Months Ended

Mar. 31, 2026

Issuance of Shares of Common Stock in connection with the Separation from the Former Parent and Make Whole Awards

The Former Parent distributed 15,514,966 shares of the Company's common stock to the Former Parent's stockholders on February 26, 2026. Pursuant to the Separation, holders of Former Parent Equity Award as of the Record Date received a non-transferable Make Whole Award pursuant to the 2026 Plan with respect to an aggregate of 1,590,677 shares of Company common stock. The Make Whole Awards were granted at a ratio of 1 share of Company common

stock per 10 shares of Former Parent Common Stock underlying Former Parent Equity Award. Under the 2026 Plan, the Company granted the Make Whole Awards to all holders of outstanding Former Parent RSUs and Former Parent Stock Options who were service providers at the time of such grants. Common stock distributed by the Former Parent in the Spin-Off and the shares of common stock issuable upon vesting of the Make Whole Awards to holders of Former Parent Equity Award constituted all of the issued and outstanding common stock immediately after the Separation.

2026 Incentive Award Plan

The Company’s 2026 Incentive Award Plan (the “2026 Plan”) was approved by its board of directors on February 26, 2026, and became effective on February 26, 2026. The 2026 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards, cash-based awards and dividend equivalent rights to the Company’s officers, employees, directors and consultants. The number of shares initially reserved for issuance under the 2026 Plan was 2,909,446, which shall be cumulatively increased each January 1 beginning January 1, 2027 and ending on and including January 1, 2036, by the lesser of 5% of the number of shares of the Company’s common stock outstanding (including any shares issuable pursuant to pre-funded warrants) on the immediately preceding December 31 or such lesser number of shares determined by the Company’s board of directors. As of March 31, 2026, there were 1,218,769 shares remaining available for issuance under the 2026 Plan.

2026 Employee Stock Purchase Plan

The Company's 2026 Employee Stock Purchase Plan (the “2026 ESPP”) was approved by its board of directors on February 26, 2026, and became effective on February 26, 2026. A total of 171,144 shares of common stock were initially reserved for issuance under the 2026 ESPP, which shall be cumulatively increased each January 1 beginning January 1, 2027 and ending on and including January 1, 2036, by the lesser of (i) 1% of the number of shares of the Company’s common stock outstanding (including any shares issuable pursuant to pre-funded warrants) on the immediately preceding December 31 or (ii) such lesser number of shares determined by the Company’s board of directors. The 2026 ESPP allows eligible employees to purchase shares during certain offering periods. No shares have been purchased under the 2026 ESPP as of March 31, 2026.

Stock-Based Compensation

The Company has stock-based compensation plans under which it granted stock options and restricted stock units. Prior to February 27, 2026, stock-based compensation had been allocated to the Company by using a proportional cost allocation method primarily based on a percentage of the operating expenses attributable to the Company. The amounts presented are not necessarily indicative of future awards and do not necessarily reflect the costs that the Company would have incurred as an independent company for the periods presented.

Stock‑based compensation expense during the Spin-Off period primarily relates to accelerated vesting of equity awards in connection with the Spin-Off, including Make Whole Awards. For the period subsequent to the Company becoming a standalone company in February 2026, stock‑based compensation expense exclusively related to stock option grants to members of the Company's board of directors. The Company did not grant any equity awards to employees or non-employees during this period.

Stock-based compensation expense attributed to the Company as well as incurred by the Company by classification included within the condensed statements of operations and comprehensive loss was as follows (in thousands):


	Three Months Ended
	March 31,
	2026		2025
Research and development expense	$	5,857	$	622
General and administrative expense		6,356		588
Total stock-based compensation expense	$	12,213	$	1,210

Atrium Therapeutics, Inc. 10-Q