ASSEMBLY BIOSCIENCES, INC. Stock Compensation Disclosure

Note 7 - Stock-Based Compensation

Equity Incentive Plans

In May 2023, the Company's stockholders approved an amendment to the Assembly Biosciences, Inc. Amended and Restated 2018 Stock Incentive Plan (the 2018 Plan), which increased the aggregate number of shares of common stock reserved under the 2018 Plan to 883,333.

In May 2024, the Company's stockholders approved an amendment to the 2018 Plan, which increased the aggregate number of shares of common stock reserved under the 2018 Plan to 1,103,333.

As of December 31, 2024, the Company had awards outstanding under the following shareholder approved plans: 2010 Equity Incentive Plan (the 2010 Plan), which has been frozen; the Assembly Biosciences, Inc. Amended and Restated 2014 Stock Incentive Plan (the 2014 Plan); and the 2018 Plan. Shares of common stock underlying awards that are forfeited under the 2010 Plan on or after June 2, 2016 will become available for issuance under the 2014 Plan. As of December 31, 2024, the Company also had awards outstanding under the Assembly Biosciences, Inc. 2017 Inducement Award Plan, the Assembly Biosciences, Inc. 2019 Inducement Award Plan, and the Assembly Biosciences, Inc. 2020 Inducement Award Plan.

The Company issues new shares of common stock to settle options exercised or vested RSUs. The Company also issues new shares of common stock in connection with purchases of shares of common stock by eligible employees under the Assembly Biosciences, Inc. Second Amended and Restated Employee Stock Purchase Plan (the 2018 ESPP).

In February 2024, the Reverse Stock Split became effective. All outstanding stock options and restricted stock units presented have been adjusted to reflect the 1-for-12 Reverse Stock Split.

Stock Plan Activity

Stock Options

The weighted-average grant-date fair value of options granted was $10.04 and $7.68 during the years ended December 31, 2024 and 2023, respectively. The intrinsic value of options exercised was not material during the year ended December 31, 2024. There were no options exercised in 2023.

RSUs

The total fair value of RSUs vested and settled during 2024 and 2023 was $2.2 million and $2.8 million, respectively. The total intrinsic value of RSUs vested and settled during 2024 and 2023 was $0.7 million and $0.5 million, respectively.

In July 2021, the Company granted 26,981 RSUs with performance-based vesting conditions upon the achievement of clinical milestones to the majority of employees, including executive officers. The awards had a grant date fair value of $1.2 million and vested upon achievement of performance conditions fully met by December 31, 2023. The Company did not recognize any stock-based compensation expense for these RSUs during the year ended December 31, 2024, compared to $0.3 million during the year ended December 31, 2023. All awards were fully vested with no remaining unrecognized compensation cost as of December 31, 2023.

In March 2022, the Company granted 21,248 RSUs with market-based vesting conditions to members of management, including its executive officers. The awards had a grant date fair value of $0.4 million and were recognized over the derived service period of 1.5 years and vest upon the achievement of certain market-based conditions which have not been achieved as of December 31, 2024. The Company did not recognize any stock-based compensation expense for these RSUs during the year ended December 31, 2024, compared to $0.1 million for these RSUs during the year ended December 31, 2023.

In August 2022, the Company granted 43,748 RSUs with performance-based vesting conditions upon the achievement of clinical milestones to its executive officers. The awards had a grant date fair value of $1.1 million and vested upon achievement of performance conditions fully met by December 31, 2024. The Company recognized stock-based compensation expense of $0.1 million and $0.6 million for these RSUs during the years ended December 31, 2024 and 2023, respectively. All awards were fully vested with no unrecognized compensation cost as of December 31, 2024.

Employee Stock Purchase Plan

In May 2024, the Company's stockholders approved an amendment to the 2018 ESPP, which increased the aggregate number of shares of common stock available for purchase by employees up to an aggregate of 226,398 shares at a discount to the market price. Eligible employees may participate through payroll deductions of up to 15% of such employee’s compensation for each pay period subject to annual statutory limits.

Eligible employees can purchase the Company’s common stock at the end of a predetermined offering period at 85% of the lower of the fair market value at the beginning or end of the offering period. Under the 2018 ESPP, the offering periods end on the last business day occurring on or before May 14 or November 14. The ESPP is compensatory and results in stock-based compensation expense.

In May and November 2024, employees purchased 7,252 and 7,685 shares of common stock, respectively, under the 2018 ESPP. In May and November 2023, employees purchased 7,534 and 6,919 shares of common stock, respectively, under the 2018 ESPP. As of December 31, 2024, 156,815 shares of common stock are available for future sale under the Company’s 2018 ESPP. Stock-based compensation expense recorded in connection with the 2018 ESPP was $0.1 million for both the years ended December 31, 2024 and 2023.

Valuation Assumptions

The fair value of ESPP purchase rights and stock appreciation rights were not material for any period presented.

Stock-Based Compensation Expense

As of December 31, 2024, there was $2.3 million of total unrecognized stock-based compensation related to outstanding equity awards which is expected to be recognized over a weighted average remaining amortization period of 1.6 years.