The Board of Directors adopted the Amended and Restated 2023 Equity Incentive Plan (the “2023 Plan”) on April 30, 2023, subject to approval by the Company’s stockholders. On June 15, 2023, the Company’s stockholders approved the 2023 Plan, which amended and restated the A&R 2019 Plan and will be a successor to, and replacement of, the A&R 2019 Plan. The number of shares of the Company's common stock reserved for issuance under the 2023 Plan will automatically increase on January 1st of each year, for a period of 10 years, from January 1, 2024 continuing through January 1, 2033, by 4% of the total number of shares of the Company's common stock outstanding on December 31st of the preceding calendar year, or a lesser number of shares as may be determined by the Board of Directors. Accordingly, on January 1, 2024, the common stock reserved for issuance was increased by 881,810 shares. As of June 30, 2024, there were 508,017 shares available for future grant under the 2023 Plan.

The 2023 Plan allows the Company to grant stock awards to employees, directors and consultants of the Company, including incentive stock options (“ISOs”), non-qualified stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards and other stock awards.

The Board of Directors adopted the 2023 Inducement Plan (“2023 Inducement Plan”) on June 21, 2023, pursuant to which the Company reserved 1,150,000 shares of its common stock to be used exclusively for grants of 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 Nasdaq Listing Rules. The 2023 Inducement Plan was approved by the Board of Directors without stockholder approval in accordance with such rule. As of June 30, 2024, there were 1,072,950 shares available for future grant under the 2023 Inducement Plan.

The Company measures employee and non-employee stock-based awards at grant date fair value and records compensation expense on a straight-line basis over the vesting period of the award.

The Millendo board of directors adopted the 2019 Employee Stock Purchase Plan on April 29, 2019, which became effective upon stockholder approval on June 11, 2019. On June 17, 2022, the Company’s stockholders approved the Amended and Restated 2019 Employee Stock Purchase Plan (the “2019 ESPP”). The 2019 ESPP enables employees to purchase shares of the Company's common stock through offerings of rights to purchase the Company's common stock to all eligible employees.

The 2019 ESPP provides that the number of shares of common stock reserved for issuance under the 2019 ESPP will automatically increase on January 1, 2023 and continuing through (and including) January 1, 2029, by the lesser of 1.5% of the total number of shares of Common Stock outstanding on December 31st of the preceding calendar year, (ii) 500,000 shares of Common Stock, or (iii) such lesser number of shares of Common Stock as determined by the Board of Directors (which may be zero). On January 1, 2024, the common stock reserved for issuance was increased by 330,678 shares.

As of June 30, 2024, 528,791 shares of common stock remained available for future issuance under the 2019 ESPP. During the three and six months ended June 30, 2024, 34,023 shares of common stock were issued under the 2019 ESPP.

Options to purchase the Company’s common stock may be granted at a price not less than the fair market value in the case of both NSOs and ISOs, except for an options holder who owns more than 10% of the voting power of all classes of stock of the Company, in which case the exercise price shall be no less than 110% of the fair market value per share on the grant date. Stock options granted under the Plans generally vest over four years and expire no later than ten (10) years from the date of grant. Vested options can be exercised at any time.

The following shows the stock option activities for the six months ended June 30, 2024 and 2023:


	Total Options Outstanding			Weighted-Average Exercise Price
Balance—December 31, 2023		3,554,112		$	7.28
Granted		748,175			4.45
Exercised		(81,699	)		1.91
Cancelled and forfeited		(208,376	)		8.23
Balance—June 30, 2024		4,012,212			6.81

Balance—December 31, 2022		1,553,041		$	6.66
Granted		679,150			1.29
Exercised		(413	)		1.23
Cancelled and forfeited		(44,075	)		4.58
Balance—June 30, 2023		2,187,703			5.04

The following table summarizes information about stock options outstanding at June 30, 2024:


	Shares		Weighted Average Remaining Contractual Life (In Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value
Options outstanding		4,012,212		8.63	$	6.81	$	475,246
Vested and expected to vest		4,012,212		8.63	$	6.81	$	475,246
Exercisable		1,056,469		7.35	$	6.01	$	185,744

During the six months ended June 30, 2024 and 2023, the Company granted employees and non-employees stock options to purchase 748,175 and 679,150 shares of common stock, respectively, with a weighted-average grant date fair value of $3.74 and $1.08 per share, respectively. As of June 30, 2024 and 2023, total unrecognized compensation costs related to unvested employee stock options were $14,772 and $3,775, respectively. These costs are expected to be recognized over a weighted-average period of approximately 3.1 years and 2.4 years, respectively.

The Company estimated the fair value of stock options using the Black-Scholes option pricing valuation model. The fair value of employee and non-employee stock options is being amortized on the straight-line basis over the requisite service period of the awards. The fair value of employee and non-employee stock options was estimated using the following assumptions for the six months ended June 30, 2024 and 2023:


	2024			2023
Expected term (in years)	5.5 - 6.1			5.5 - 6.1
Expected volatility	109% - 113%			109% - 111%
Risk-free interest rate	3.8% - 4.7%			3.4% - 3.9%
Dividends		—	%		—	%

Expected Term—The expected term of options granted represents the period of time that the options are expected to be outstanding. Due to the lack of historical exercise history, the expected term of the Company’s employee stock options has been determined utilizing the simplified method for awards that qualify as plain-vanilla options.

Expected Volatility—The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company did not have any trading history for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumption as more historical data for the Company’s common stock becomes available.

Risk-Free Interest Rate—The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options.

Dividends—The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used.

The following table summarizes the components of stock-based compensation expense recognized in the Company’s condensed consolidated statement of operations for the three and six months ended June 30, 2024:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Research and development	$	559	$	147	$	1,105	$	292
General and administrative		761		293		1,533		594
Total	$	1,320	$	440	$	2,638	$	886