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Stock-Based Compensation Plans
 9 Months Ended
Sep. 30, 2026
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Plans Stock-Based Compensation Plans
2021 Employee Stock Purchase Plan

On April 25, 2021, the Company adopted the 2021 Employee Stock Purchase Plan ("ESPP"), which was approved by stockholder vote at the 2021 Annual Meeting of Stockholders held on June 10, 2021. The ESPP provides eligible employees of the Company with an opportunity to purchase common stock of the Company through accumulated payroll deductions, which are included in other current liabilities until they are used to purchase Company shares. Eligible employees participating in the bi-annual offering period can choose to have up to the lesser of 15% of their annual base earnings or the IRS annual share purchase limit of $25,000 in aggregate market value to purchase shares of the Company’s common stock. The purchase price of the stock is the lesser of (i) 85% of the closing market price on the date of purchase and (ii) the closing market price at the beginning of the bi-annual offering period. The maximum number of shares initially reserved for delivery under the plan was 20,000 shares. An increase of 100,000 shares to 120,000 shares was approved by stockholders of the Company at the Company's Special Meeting of stockholders held on March 4, 2024.

The first enrollment period under the plan commenced on August 1, 2021 and the Company has issued 77,858 shares life-to-date under the ESPP. The Company recognized $39,000 and $71,000 of expense related to the plan during the three and nine months ended September 30, 2026, respectively. The Company recognized $22,000 and $70,000 of expense related to the plan during the three and nine months ended September 30, 2025, respectively.

Stock Option Programs

In July 2019, the Company’s stockholders approved the 2019 Omnibus Equity Incentive Plan, (as amended, the “2019 Plan”), which was adopted by the Board of Directors (the "Board") with an effective date of June 14, 2019. The 2019 Plan allows for the grant of equity awards to employees, consultants and non-employee directors. An initial maximum of 150,000 shares of the Company’s common stock were available for grant under the 2019 Plan. The 2019 Plan included an evergreen provision that allowed for the annual addition of up to 4% of the Company’s fully-diluted outstanding stock, with a maximum allowable increase of 490,000 shares over the term of the 2019 Plan. In accordance with this provision, the shares available for
grant were increased in 2020 through 2023 by a total of 440,887 shares. At the Company's Annual Stockholders meeting on June 28, 2023, stockholders voted to increase the allowable shares under the 2019 plan by 444,000 shares as well as to eliminate the evergreen provision. On March 4, 2024, the stockholders voted at the Company's Special Meeting to increase the allowable shares under the 2019 plan by 910,000 shares. On June 4, 2025, at the Company’s 2025 Annual Meeting of Stockholders, the Company’s stockholders approved a proposal to amend the terms of the 2019 Plan to, among other things, increase the allowable shares under the 2019 plan by 700,000 shares. On June 29, 2026, at the Company’s 2026 Annual Meeting of Stockholders, the Company’s stockholders approved a proposal to amend the terms of the 2019 Plan to, among other things, increase the allowable shares under the 2019 plan by 6,000,000 shares. The 2019 Plan (as amended on June 28, 2023, March 4, 2024, June 4, 2025 and June 29, 2026) is currently administered by the Board, or, at the discretion of the Board, by a committee of the Board, which determines the exercise prices, vesting schedules and other restrictions of awards under the 2019 Plan at its discretion. Options to purchase stock may not have an exercise price that is less than the fair market value of underlying shares on the date of grant, and may not have a term greater than ten years. Incentive stock options granted to employees typically vest over four years. Non-statutory options granted to employees, officers, members of the Board, advisors, and consultants of the Company typically vest over three or four years.
Shares that are expired, terminated, surrendered or canceled under the 2019 Plan without having been fully exercised will be available for future awards.
2026 Inducement Equity Compensation Plan

On March 13, 2026, the Board and the Compensation Committee of the Board adopted the Inducement Plan (the “Inducement Plan”), effective as of March 13, 2026, pursuant to which the Company reserved 3,000,000 shares of common stock to be issued exclusively for grants of equity-based awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Marketplace Rules of the Nasdaq Stock Market (“Rule 5635(c)(4)”). The Inducement Plan provides for the grant of equity-based awards in the form of non-qualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards, and dividend equivalent rights. The Inducement Plan was adopted by the Board and the Committee without stockholder approval pursuant to Rule 5635(c)(4). The Company registered the 3,000,000 shares of common stock under a Registration Statement on Form S-8 (File No. 333-294952), filed with the SEC on April 9, 2026. Effective April 24, 2026 the Board granted 300,000 stock options to Michael Panzara, the Company's new Chief Medical Officer. Effective May 19, 2026, the Board voted to reduce the remaining stock options available under the Inducement Plan to 1,250,000. Effective May 22, 2026, the Board granted 1,000,000 stock options to Erik Lundgren, the Company's new CEO. On September 16, 2026 the Board voted to increase the number of shares available under the inducement plan by 1,300,000. The Company registered these 1,300,000 shares of common stock under a Registration Statement on Form S-8 (File No. 333-299232), filed with the SEC on October 1, 2026. As of September 30, 2026, there are 1,233,650 stock options available for grant remaining under the Inducement Plan.
Corporate Transaction Option Acceleration Plan
On February 4, 2025, the Company established a Corporate Transaction Option Acceleration Plan, pursuant to which in the case of a merger or consolidation of the Company with or into another corporation or a sale of substantially all of the stock of the Company each option award held by an eligible employee will become fully vested upon the occurrence of a Corporate Transaction.
Movements during the period
The following table summarizes stock option activity for the nine months ended September 30, 2026 and 2025, respectively, for the 2019 Plan and 2026 Inducement Plan:
OptionsWeighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual
Term (Years)		Aggregate
Intrinsic
Value
Outstanding as of January 1, 20262,572,850 $12.08 
Granted4,246,729 $11.99 
Exercised(38,015)$8.38 — $274,882 
Forfeited or expired(46,250)$27.18 
Outstanding as of September 30, 20266,735,314 $11.94 7.68$1,510,263 
Options exercisable as of September 30, 20262,507,269 $12.31 4.80$808,162 
OptionsWeighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual
Term (Years)		Aggregate
Intrinsic
Value
Outstanding as of January 1, 20251,613,605 $15.20 
Granted993,710 $7.80 
Exercised— $— 
Forfeited or expired(34,465)$34.90 
Outstanding as of September 30, 20252,572,850 $12.10 8.56$1,058,962 
Options exercisable as of September 30, 2025810,583 $16.20 7.14$39,947 
Measurement
The weighted-average assumptions used in the BSM option pricing model to determine the fair value of the employee and non-employee stock option grants relating to the 2019 Plan and the 2026 Inducement Plan were as follows:
Risk-Free Interest Rate
The risk-free rate assumption is based on U.S. Treasury instruments with maturities similar to the expected term of the stock options.
Expected Dividend Yield
The Company has not issued any dividends and does not expect to issue dividends over the life of the options. As a result, the Company has estimated the dividend yield to be zero.
Expected Volatility
The Company estimates expected volatility based on the historical volatility of its own stock. The historical volatility data was computed using the daily closing prices during the equivalent period of the calculated expected term of the stock-based awards.
Expected Term
The expected term of options is estimated considering the vesting period at the grant date, the life of the option and the average length of time similar grants have remained outstanding in the past.
The weighted-average grant date fair value of stock options granted under the 2019 Plan and the 2026 Inducement Plan during the nine months ended September 30, 2026 and 2025 was $11.80 and $6.70, respectively. The following are the
underlying assumptions used in the Black-Scholes-Merton option pricing model to determine the fair value of stock options granted to employees and to non-employees under this stock plan:
Nine Months Ended September 30,
20262025
Risk-free interest rate4.27%4.14%
Expected dividend yield0%0%
Expected volatility109.2%116.0%
Expected term of options (years)5.665.91
As of September 30, 2026, there was $43.2 million in total unrecognized compensation expense relating to the 2019 Plan and 2026 Inducement Plan, to be recognized over a weighted average period of 3.18 years. There were stock options granted in the three months ended March 31, 2026 that were granted subject to shareholder approval, which was obtained in the three months ended June 30, 2026.
Stock Appreciation Rights Plan
On July 7, 2025, the Board of Directors of Immunic, Inc. authorized grants, of up to an aggregate of 3,500,000 stock appreciation rights (“SARs”) to the Company’s employees and executive officers. As a result of the shareholders approving an increase of an additional six million shares available for issuance under the 2019 Plan on June 29, 2026, the Company can control the settlement of the SARS in shares and meet all other criteria to be classified as equity and therefore, were reclassified from liability classification to equity and no longer will be marked to market each quarter. The liability that was previously recognized for these awards was reclassified to Additional Paid in Capital during the quarter ended June 30, 2026. The exercise price of each SAR is $7.65, the closing price of the common stock on July 7, 2025.

The approximately 3,500,000 SARs granted consisted of five distinct tranches:

•Time Based SARs (TB SARs): There were 500,000 TB SAR's issued which became exercisable beginning August 1, 2026. The number of TB SARs exercisable is fixed, and their exercisability was only subject to the time vesting condition. The TB SARs expire ten years from the date of grant. There are 418,722 TB SARs outstanding as of September 30, 2026.
•SARs tied to the exercise of Series A Warrants (SA SARs): The maximum number of SA SARs was capped at up to 1,000,000, but the number of SARs exercisable is determined based on the percentage of Series A Warrants to be exercised out of a total of 8,666,667 shares of Series A Warrants issued. As of September 30, 2026, all of the Series A warrants and SA SARs expired unexercised.
•SARs tied to the exercise of Series B Warrants (SB SARs): The maximum number of SB SARs is capped at up to 1,000,000, but the number of SARs exercisable is determined based on the percentage of Series B Warrants to be exercised out of a total of 8,666,667 shares of Series B Warrants issued. On February 17, 2026, Series B Warrants to purchase up to an aggregate of 5,108,700 shares of Common Stock were surrendered by Participating Series B Holders and cancelled. Life-to-date, 1,000,000 of the Series B warrants have been exercised. Series B Warrants to purchase up to an aggregate of 2,557,967 shares of Common Stock remain issued and outstanding. The Potential SARs that were associated with the Series B Warrants that were cancelled were also cancelled. This resulted in a revised potential issuance of 410,511 Series B SARs out of the initial grant of 1,000,000. Life-to-date, 115,378 SB SARS have been issued and 100,059 of these remain outstanding as of September 30, 2026. The Vesting of SB SARs that were not exercised are subject to service and implied market conditions. The SB SARs vested on August 1, 2026 and expire ten years from the date of grant (see Note 6 "February 2026 Private Placement-Royalty Exchange Agreement").
•SARs tied to the issuance of Tranche Two Shares (T2 SARs): The maximum number of T2 SARs was capped at up to 500,000, but the number of SARs exercisable was determined based on the percentage of Tranche Two Shares issued out of a total of 4,662,005 shares. Vesting of T2 SARs was subject to service, implied performance and market conditions. These SARs will not be exercised as the second tranche from the January 4, 2024 Financing was not exercised by October 31, 2025.
•SARs tied to the issuance of Tranche Three Shares (T3 SARs): The maximum number of T3 SARs was capped at up to 500,000, but the number of SARs exercisable is determined based on the percentage of Tranche Three Shares issued out of a total of 4,662,005 shares. Vesting of T3 SARs were subject to service, implied performance and market conditions. These SARs will not be exercised as the third tranche from the January 4, 2024 Financing was not exercised by October 31, 2025.
The Company’s SARs activity is as follows:

SARs grantsSharesWeighted average exercise priceWeighted average remaining contractual term (years)Aggregate intrinsic value
Balance at January 1, 20261,623,007 $7.650
SARs granted— $—
SARs forfeited or expired(732,226)$7.650
SARs exercised(91,217)$7.650$752,764
Balance at September 30, 2026799,564 $7.6506.83$1,319,281
Exercisable at September 30, 2026518,781 $7.6506.63$855,989

SARs grantsSharesWeighted average exercise priceWeighted average remaining contractual term (years)Aggregate intrinsic value
Balance at January 1, 2025— $—
SARs granted3,499,837 $7.650
SARs forfeited or expired— $—
Balance at September 30, 20253,499,837 $7.6509.76$4,080,809
Exercisable at September 30, 2025— $——$—

The June 29, 2026 fair value of the SARs was $8.60 per share for TB SARs and $11.62 per share for SB SARs.

The September 30, 2025 fair value of the SARs was $4.040 per share for TB SARs, $3.260 per share for SA SARs, $3.940 per share for SB SARs, $0.130 for T2 SARs, and $0.130 for T3 SARs.
For the three months and nine months ended September 30, 2026, the Company recognized $1.1 million and $5.5 million of compensation expenses, respectively. The nine months include $1.6 million of expense related to the revaluation of the SARs grants on June 29, 2026 which is the date of the reclassification of these awards from liability to equity. As of September 30, 2026, the unrecognized compensation expense is $2.4 million which is expected to be recognized over a weighted average period of 2.5 years.

For the three months and nine months ended September 30, 2025, the Company recognized $1.5 million compensation expenses and corresponding liability for the same amount for the SARs.

The Company utilized a Monte Carlo simulation model in conjunction with a Probability-Weighted Expected Return Model (“PWERM”) to estimate the fair value of the SARs liabilities. This valuation model incorporates various assumptions, including stock price volatility, risk-free interest rate, the probability of a corporate transaction, and the expected term of the underlying equity instruments and SARs.

The following table summarizes the key assumptions used in estimating the fair value of the SARs at June 29, 2026 which was the date the SARs were reclassified to equity and December 31, 2025:
June 29, 2026December 31, 2025
Expected term (years)
0.09-2.71
1.00-2.40
Risk-free interest rate
4.02%-4.34%
3.64%-4.11%
Stock price volatility
85%-110%
65%-115%
Probability (1)
50%-50%
50%-50%
Dividend rate
—%
—%

(1) Scenario probability was based on timing expectations of the Company that a corporate transaction occurring was estimated at 50%; and a corporate transaction not occurring at 50%.
Modification and Acceleration of Stock Option and SARs Grants
The Company modified certain stock option and SARs grants during the nine months ended September 30, 2026 due to two employee terminations. The incremental expense recognized related to these modifications during the three and nine months ended September 30, 2026 was approximately $0.8 million and $1.0 million, respectively.
As a result of the previously established employment agreements associated with these terminations, the Company incurred accelerated stock option expense during the three and nine months ended September 30, 2026 of $8.2 million and $9.0 million, respectively.
Stock-Based Compensation Expense
Total stock-based compensation expense for all stock awards recognized in the accompanying unaudited condensed consolidated statements of operations is as follows:
Three Months
 Ended September 30,		Nine Months
 Ended September 30,
2026202520262025
Research and development$2,137,000 $1,539,000 $7,526,000 $3,131,000 
General and administrative11,771,000 2,075,000 17,630,000 4,424,000 
Total$13,908,000 $3,614,000 $25,156,000 $7,555,000