The Company uses equity-based compensation programs to provide long-term performance incentives for its employees, directors and consultants. These incentives consist primarily of stock options and restricted stock grants.

In January 2017 and October 2018, the Company's Board of Directors approved the LB Pharmaceuticals Inc 2017 Stock Incentive Plan ("2017 Plan") and the LB Pharmaceuticals Inc 2018 Stock Incentive Plan ("2018 Plan"), respectively. No additional awards will be granted under the 2017 Plan or the 2018 Plan. As of both March 31, 2026 and December 31, 2025, there were 2,150 and 20,234 shares outstanding under the 2017 Plan and 2018 Plan, respectively.

In August 2023, the Company's Board of Directors approved the LB Pharmaceuticals Inc 2023 Stock Incentive Plan ("2023 Plan"). No additional awards will be granted under the 2023 Plan. As of March 31, 2026 and December 31, 2025, there were 396,728 and 397,385 shares outstanding under the 2023 Plan, respectively.

In September 2025, the Company’s stockholders approved the LB Pharmaceuticals Inc 2025 Equity Incentive Plan (“2025 Plan”). The 2025 Plan authorizes the issuance of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and performance awards. Initially, the maximum number of shares issuable under the 2025 Plan was 2,907,335 shares. In addition, the number of shares reserved for issuance under the 2025 Plan will increase on January 1 of each calendar year, beginning on January 1, 2026 and continuing through January 1, 2035, by an amount equal to 5% of the total number of fully diluted shares outstanding on December 31 of the immediately preceding year, or a lesser number of shares as determined by the Board of Directors. On January 1, 2026, the shares reserved for issuance under the 2025 Plan increased by 1,400,197 shares pursuant to this provision. The maximum number of shares of common stock that may be issued upon the exercise of incentive stock options under the 2025 Plan is 8,722,005. As of March 31, 2026 and December 31, 2025, there were 2,015,028 and 1,882,871 shares outstanding under the 2025 Plan, respectively, and 1,873,900 and 605,412 shares were available for future issuance, respectively.

During the year ended December 31, 2025, the Company granted employees 285,000 stock options as an inducement material to the acceptance of an offer of employment in accordance with Nasdaq Listing Rule 5635(c)(4). During the three months ended March 31, 2026, the Company granted employees an additional 315,000 stock options as inducements under Nasdaq Listing Rule 5635(c)(4). On March 26, 2026, the Company filed a registration statement on Form S-8 to register the shares of common stock underlying the inducement awards.

The stock options granted in the three months ended March 31, 2026 and 2025 vest based on one of the following schedules: (i) 25% on the first anniversary of grant date with the remaining 75% to vest in 36 equal monthly installments thereafter through the fourth anniversary of the grant date or (ii) vesting in three equal annual installments through the third anniversary for certain

independent board member grants. All stock options expire ten years from the grant date. The assumptions used to determine the fair value of stock options granted were as follows:


	March 31, 2026		March 31, 2025
Expected life of options (in years)	6.00 - 6.05			6.25
Risk-free interest rate	3.81% - 3.86%			4.42	%
Expected volatility	93.25% - 94.49%			86.7	%
Dividends	$	—	$	—
Fair value of common stock	$20.73 - $24.22		$	22.03

A summary of the Company’s stock option activity and related information is as follows (in thousands, except per share and contractual term data):


	Options Outstanding			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance at December 31, 2025		2,588		$	15.77		9.46	$	17,235
Granted		472			22.14
Exercised		(1	)		15.00
Forfeited		(25	)		17.51
Balance at March 31, 2026		3,034		$	16.74	9.33		$	24,420
Options vested and expected to vest as of March 31, 2026		3,034		$	16.74		9.33
Options exercisable as of March 31, 2026		192		$	17.71		7.56

The weighted average grant date fair value of the stock options granted during the three months ended March 31, 2026 was $17.27. The weighted average grant date fair value of the stock options granted during the three months ended March 31, 2025 was $25.94.

During the three months ended March 31, 2026 and 2025, the Company recognized stock-based compensation expense related to stock options as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Research and development	$	470	$	129
General and administrative		2,094		505
Total stock-based compensation	$	2,564	$	634

As of March 31, 2026, there was $34.6 million unrecognized stock-based compensation expense which is expected to be recognized over a weighted average period of 3.39 years. There were no stock options exercised or forfeited during the three months ended March 31, 2025.

There were no realized tax benefits for the three months ended March 31, 2026 and 2025.

The Company did not grant any restricted stock during the three months ended March 31, 2026 and 2025.

Restricted stock awards vest over the period in which the related services are rendered, which may range from immediate vesting to up to 36 months. Certain awards alternatively vest upon the consummation of the Company’s first underwritten public offering under the Securities Act of 1933, or on the six month anniversary of the public offering.

A summary of the Company’s restricted stock activity is as follows:


	Shares			Weighted Average Grant Date Fair Value
Unvested Balance at December 31, 2025		6,647		$	11.15
Granted		—			—
Vested		(6,555	)		12.05
Unvested balance as of March 31, 2026		92		$	23.15

During the three months ended March 31, 2026 and 2025, the Company recognized stock-based compensation related to shares of restricted stock as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Research and development	$	—	$	—
General and administrative		2		1
Total stock-based compensation	$	2	$	1

As of March 31, 2026, the Company had unrecognized compensation expense related to such shares of less than $0.01 million.