Definium Therapeutics, Inc. Stock Compensation Disclosure

Stock Incentive Plans

Effective March 7, 2023, the Company amended the definitions of “Fair Market Value” and “Market Value” under the MindMed Stock Option Plan (the “Stock Option Plan”) and the Performance and Restricted Share Unit Plan (the “RSU Plan”), respectively, to be based upon the closing price of the Company's Common Shares as traded on the Nasdaq Stock Market on the last trading day on which Common Shares traded prior to the day on which an equity award is granted (the “Amendments”). This change is only applicable for equity compensation awards granted subsequent to the Amendments. Accordingly, stock options granted after March 7, 2023 ("USD Options") are denominated in USD, and the grant date fair value of restricted share units granted after March 7, 2023 ("USD RSUs") is denominated in USD. The fair value of both USD Options and USD RSUs is based upon the closing price of the Company's Common Shares as traded on the Nasdaq Stock Market.

As of December 31, 2024, in conjunction with the voluntary Cboe Canada delisting effective as of April 10, 2024, all of the Company's Common Shares are only traded on the Nasdaq Stock Market. All outstanding stock options have their exercise prices denominated in USD based upon the USD value on the day on which the equity award was granted.

Stock Options

On February 27, 2020, the Company adopted the Stock Option Plan to advance the interests of the Company by providing employees, contractors and directors of the Company a performance incentive for continued and improved service with the Company. The Stock Option Plan sets out the framework for determining eligibility as well as the terms of any stock-based compensation granted. The Stock Option Plan was approved by the shareholders as part of the terms of an arrangement agreement (the “Arrangement”) entered into by the Company on October 15, 2019, in connection with the completion of its reverse acquisition, which completed on February 27, 2020. The Company is authorized to issue such number of stock options equal to 15% of the Company’s issued and outstanding Common Shares under the terms of the Stock Option Plan, together with Common Shares that are issuable pursuant to outstanding awards or grants under any other compensation or incentive mechanism involving the issuance or potential issuance of Common Shares, including the RSU Plan and ESPP.

The weighted average grant date fair value of options granted during the year ended December 31, 2024 was $4.68. The aggregate intrinsic value of options vested during the year ended December 31, 2024 was $7.5 million. The expense recognized related to options during the years ended December 31, 2024 and 2023 was $8.2 million and $6.6 million, respectively.

Restricted Share Units

The fair market value of RSUs vested during the year ended December 31, 2024 was $8.0 million. The expense recognized related to RSUs during the years ended December 31, 2024 and 2023 was $8.7 million and $8.6 million, respectively.

Employee Share Purchase Plan

On April 16, 2024, the Company’s Board of Directors approved the Mind Medicine (MindMed) Inc. Employee Share Purchase Plan (the “ESPP”), subject to its approval by the Company’s shareholders. On June 10, 2024, the Company's shareholders approved the ESPP at the Company’s 2024 Annual General and Special Meeting of Shareholders. A total of 750,000 Common Shares were reserved for future issuance under the ESPP.

As of August 15, 2024, the Company commenced the first offering under the ESPP. The fair value of Common Shares to be issued under the ESPP was estimated using the following assumptions:

Stock-based Compensation Expense

As of December 31, 2024, there was approximately $12.7 million of total unrecognized stock-based compensation expense related to unvested options granted to employees under the Stock Option Plan that is expected to be recognized over a weighted average period of 2.8 years. As of December 31, 2024, there was approximately $7.4 million of total unrecognized stock-based compensation expense related to RSUs granted to employees under the RSU Plan that is expected to be recognized over a weighted average period of 1.9 years. As of December 31, 2024, there was a nominal amount of total unrecognized stock-based compensation expense related to the Common Shares to be issued under the ESPP that is expected to be recognized over a weighted average period of 0.2 years.

Directors’ Deferred Share Unit Plan

On April 16, 2021, the Company adopted the MindMed Director's Deferred Share Unit Plan (the "DDSU Plan"). The DDSU Plan sets out a framework to grant nonexecutive directors deferred share units (“DDSUs”) which are cash settled awards. Effective June 8, 2023, the Company amended the definition of “Fair Market Value” under the DDSU Plan to be based upon the volume weighted average trading price of the Company’s Common Shares as traded on the Nasdaq Stock Market for the five business days on which Common Shares are traded on Nasdaq immediately preceding the applicable date. This change is only applicable for DDSUs granted subsequent to June 8, 2023. Accordingly, DDSUs granted after June 8, 2023 are denominated in USD. The DDSUs generally vest ratably over twelve months after grant and are settled within 90 days of the date the director ceases service to the Company.

For the year ended December 31, 2024, stock-based compensation expense of $0.8 million was recognized relating to the revaluation of the vested DDSUs, recorded in general and administrative expense in the accompanying consolidated statements of operations and comprehensive loss. During the year ended December 31, 2024, the Company did not issue any additional DDSUs. There were 199,026 DDSUs vested as of December 31, 2024. The liability associated with the outstanding vested DDSU’s was $1.1 million as of December 31, 2024, and was recorded to accrued expenses in the accompanying consolidated balance sheets.