SHARE-BASED COMPENSATION

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plans

The Company has grants outstanding under its 2008 Equity Incentive Plan (the “2008 Plan”), its amended and restated 2016 Equity Incentive Plan (the “2016 Plan”), and the Viridian 2020 Equity Incentive Plan (the “2020 Plan” and collectively with the 2008 Plan and the 2016 Plan, the “Equity Incentive Plans”). Additionally, beginning in July 2021, the Company granted stock options and RSUs outside of its Equity Incentive Plans to certain employees to induce them to accept employment with the Company (the “Inducement Awards”). The terms and conditions of the Inducement Awards are substantially similar to those awards granted under the Company’s Equity Incentive Plans.

In June 2022, the Company’s stockholders approved the amendment and restatement of the 2016 Plan to, among other things, transfer the then remaining number of shares available for issuance under the 2020 Plan into the 2016 Plan so that the Company operates from a single equity plan going forward. In June 2023, the Company’s stockholders approved a further amendment and restatement of the 2016 Plan to, among other things, increase the number of shares reserved for issuance thereunder by 2,000,000 shares. In June 2024, the Company’s stockholders approved a further amendment and restatement of the 2016 Plan to, among other things, increase the number of shares reserved for issuance thereunder by 2,000,000 shares. In June 2025, the Company’s stockholders approved a further amendment and restatement of the 2016 Plan to, among other things, increase the number of shares reserved for issuance thereunder by 8,000,000 shares. The 2016 Plan will terminate in April 2035.

As of September 30, 2025, the Company had the following balances by plan:


	Restricted Stock Units Outstanding	Stock Options Outstanding	Shares Available for Issuance
Inducement Awards	—	7,776,879	—
2020 Plan	—	51,709	—
2016 Plan	1,090,439	6,675,094	10,504,133
2008 Plan	—	—	—
Total	1,090,439	14,503,682	10,504,133

Restricted Stock Units

RSUs granted under the Equity Incentive Plans and the Inducement Awards generally vest annually over a two or four-year period and are settled in shares of the Company’s common stock.

A summary of RSU activity is as follows:


	RSUs	Weighted-Average Grant Date Fair Value Per Share
Outstanding at December 31, 2024	314,075	$15.51
Granted	846,678	$14.46
Vested	(8,547)	$33.29
Forfeited	(61,767)	$15.29
Outstanding at September 30, 2025	1,090,439	$14.57

Stock Options

Options granted under the Equity Incentive Plans and the Inducement Awards have an exercise price equal to the market value of the common stock at the date of grant and expire 10 years from the date of grant. Options generally vest 25% on the first anniversary of the vesting commencement date and 75% ratably in equal monthly installments over the remaining 36 months or in equal monthly or quarterly amounts over periods of up to 48 months.

A summary of common stock option activity is as follows:


	Number of Options	Weighted-Average Exercise Price Per Share	Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2024	11,348,519	$18.11	7.9	$	37,138
Granted	5,633,527	$15.22
Exercised	(281,475)	$12.82
Forfeited	(631,704)	$20.57
Expired	(1,565,185)	$23.26
Outstanding as of September 30, 2025	14,503,682	$16.43	8.6	$	85,641

Exercisable as of September 30, 2025	4,718,639	$17.74	7.9	$	25,913

Fair Value Assumptions

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options granted under its equity compensation plans. The Black-Scholes model requires inputs for risk-free interest rate, dividend yield, volatility, and expected terms of the options. Because the Company has a limited history of stock purchase and sale activity, expected volatility is based on a blend of historical data from public companies that are similar to the Company in size and nature of operations, as well as the Company’s own volatility. The Company will continue to use similar entity volatility information until its historical volatility is relevant to measure expected volatility for option grants. The Company accounts for forfeitures as they occur. The risk-free rate for periods within the contractual life of each option is based on the U.S. Treasury yield curve in effect at the time of the grant for a period commensurate with the expected term of the grant. The expected term (without regard to forfeitures) for options granted represents the period of time that options granted are expected to be outstanding and is derived from the contractual terms of the options granted, and actual and expected option-exercise behaviors. The fair value of the underlying common stock is based on the closing price of the common stock on The Nasdaq Capital Market at the date of grant.

The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2025 and 2024 was $10.43 and $10.83, respectively. The fair value was determined by the Black-Scholes option pricing model using the following weighted-average assumptions:


	Nine Months Ended September 30,
	2025	2024
Expected term (in years)	5.0	5.1
Expected volatility	84%	89%
Risk-free interest rate	4.0%	4.3%
Expected dividend yield	—%	—%
Weighted average exercise price	$15.22	$15.08

Employee Stock Purchase Plan

The 2016 Employee Stock Purchase Plan (“2016 ESPP”) allows qualified employees to purchase shares of common stock at a price equal to 85% of the lower of: (i) the closing price at the beginning of the offering period or (ii) the closing price at the end of the offering period. As of September 30, 2025, the Company had no shares available for issuance, and 186,982 cumulative shares had been issued under the 2016 ESPP. The 2016 ESPP terminated upon closing of the last offering period in September 2025.

In June 2025, the Company’s stockholders approved the 2025 Employee Stock Purchase Plan (“2025 ESPP”) and therefore, following the conclusion of the offering period in September 2025, no new offering periods under the 2016 ESPP will commence. The 2025 ESPP allows qualified employees to purchase shares of common stock at a price equal to 85% of the lower of: (i) the closing price on the first day of the offering period or (ii) the closing price on the purchase date. As of September 30, 2025, the Company had 2,000,000 shares available for issuance and no shares have been issued under the 2025 ESPP.

Share-Based Compensation Expense

Share-based compensation related to all equity awards issued pursuant to the Equity Incentive Plans, the Inducement Awards, and for estimated shares to be issued under the ESPP for the purchase periods active during each respective period is included in the unaudited condensed consolidated statements of operations and comprehensive loss as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Research and development	$	5,107	$	4,673	$	16,029	$	17,142
General and administrative	6,143		4,047		16,285		16,033
Total share-based compensation expense	$	11,250	$	8,720	$	32,314	$	33,175

During the nine months ended September 30, 2025, the Company recorded $1.6 million of incremental share-based compensation related to the acceleration of vesting for former executive officers. During the nine months ended September 30, 2024, the Company recorded $4.6 million of incremental share-based compensation related to the acceleration of vesting for former executive officers, an amount which includes $0.3 million related to the modification of the terms of options outstanding at the time of termination for one executive which would have otherwise forfeited. The Company also recorded $2.0 million in share-based compensation related to the accounting for a modification of the equity awards to extend the post-termination exercise period of certain vested stock options for a former executive.

As of September 30, 2025, the Company had $103.3 million of total unrecognized share-based compensation costs related to stock options, which the Company expects to recognize over a weighted-average remaining period of 2.8 years. As of September 30, 2025, the Company had $12.9 million of total unrecognized share-based compensation costs related to unvested RSUs, which the Company expects to recognize over a weighted-average remaining period of 3.1 years.

Viridian Therapeutics, Inc.\DE 10-Q