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Stock-Based Compensation | 9 Months Ended
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Sep. 30, 2025
Stock-Based Compensation [Abstract] |
Stock-Based Compensation | 8. Stock-Based Compensation 2024 Equity Incentive Plan The 2024 Equity Incentive Plan (“2024 Plan”) was adopted by the board of directors of Pre-Merger Oruka on February 6, 2024. The 2024 Plan provided for Pre-Merger Oruka to grant stock options, restricted stock awards, restricted stock units, and other stock-based awards to employees, officers, directors, consultants, and advisors. Equity incentive stock options granted under the 2024 Plan generally vest over four years, subject to the participant’s continued service, and expire after ten years, although two non-employee stock options were granted with vesting terms less than four years. As of September 30, 2025, 1,179,193 shares were subject to options outstanding under the 2024 Plan and will become available under the 2024 Stock Incentive Plan (defined below) to the extent the options are forfeited or lapse unexercised. 2024 Stock Incentive Plan On August 22, 2024, the 2024 Stock Incentive Plan (“2024 Stock Plan”) was approved by the Company’s stockholders and on August 29, 2024, the board of directors of the Company (the “Board”) ratified the 2024 Stock Plan. The 2024 Stock Plan allows for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, other stockholder-based awards and incentive bonuses. An additional 2,753,543 shares became available for issuance under the 2024 Stock Plan on January 1, 2025 as a result of the annual increase pursuant to the evergreen provision. As of September 30, 2025, 7,388,434 shares were reserved for issuance under the 2024 Stock Plan, of which 4,753,067 shares were available for future grant and 2,635,367 shares were subject to outstanding options. 2024 Employee Stock Purchase Plan The 2024 Employee Stock Purchase Plan (the “ESPP”) became effective in August 2024. Eligible employees may purchase shares of Company Common Stock under the ESPP at 85% of the lower of the fair market value of the Company Common Stock as of the first or the last day of each offering period. Employees are limited to contributing 15% of the employee’s eligible compensation and may not purchase more than $25,000 of stock during any calendar year. The ESPP will terminate ten years from the first purchase date under the plan, unless terminated earlier by the Board. An additional 550,709 shares became available for issuance under the ESPP on January 1, 2025 as a result of the annual increase pursuant to the evergreen provision. The Company issued nil and 10,235 shares during the three and nine months ended September 30, 2025, respectively, out of the ESPP, and as of September 30, 2025, there were 1,001,003 shares of Company Common Stock available in the pool for future issuances. For each of the three and nine months ended September 30, 2025, the three months ended September 30, 2024, and the period from February 6, 2024 (inception) to September 30, 2024, stock-based compensation expense related to the ESPP was less than $0.1 million. Stock Option Valuation The following table summarizes the weighted-average assumptions used in calculating the fair value of the awards for the three and nine months ended September 30, 2025 and for the three months ended September 30, 2024 and the period from February 6, 2024 (inception) to September 30, 2024:
|  | Three Months Ended September 30, 2025 |  |  | Three Months Ended September 30, 2024 |  |  | Nine Months Ended September 30, 2025 |  |  | Period from February 6, 2024 (inception) to September 30, 2024 |
Expected term (in years) |  |  | 6.1 |  |  |  | 6.1 |  |  |  | 6.0 |  |  |  | 6.1 |
Expected volatility |  |  | 93.7 | % |  |  | 97.3 | % |  |  | 95.3 | % |  |  | 101.0 | %
Risk-free interest rate |  |  | 3.8 | % |  |  | 3.5 | % |  |  | 4.4 | % |  |  | 4.3 | %
Expected dividend yield |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Stock Options The following table summarizes the stock option activities under the 2024 Plan and the 2024 Stock Plan for the nine months ended September 30, 2025:
|  | Number of Stock Options Outstanding |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Contractual Term (in Years) |  |  | Aggregate Intrinsic Value (in Thousands) |
Balance as of December 31, 2024 |  |  | 1,567,760 |  |  | $ | 11.39 |  |  |  | 9.4 |  |  | $ | 15,470 |
Granted |  |  | 2,278,800 |  |  | $ | 12.24 |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |
Canceled/forfeited |  |  | (32,000 | ) |  | $ | 10.91 |  |  |  |  |  |  |  |  |
Balance as of September 30, 2025 |  |  | 3,814,560 |  |  | $ | 11.90 |  |  |  | 9.1 |  |  | $ | 30,938 |
Vested and expected to vest, September 30, 2025 |  |  | 3,814,560 |  |  | $ | 11.90 |  |  |  | 9.1 |  |  | $ | 30,938 |
Exercisable, September 30, 2025 |  |  | 730,123 |  |  | $ | 8.99 |  |  |  | 8.8 |  |  | $ | 7,689 |
The weighted average grant-date fair value per share of stock options granted during the nine months ended September 30, 2025 was $9.66 per share. Aggregate intrinsic value represents the difference between the estimated fair value of the underlying Company Common Stock and the exercise price of outstanding, in-the-money employee stock options. Restricted Stock Awards In February 2024 and March 2024, the Company issued 2,207,553 shares of RSAs to certain employees, directors, and consultants at a price of $0.0001 per share, the then par value of Pre-Merger Oruka Common Stock. Such RSAs have service-based vesting conditions only and vest over a four-year period, during which time all unvested shares are subject to forfeiture in the event the holder’s service with the Company voluntarily or involuntarily terminates. 137,972 and 852,515 RSAs vested during the three and nine months ended September 30, 2025, respectively. For each of the three and nine months ended September 30, 2025, the three months ended September 30, 2024, and the period from February 6, 2024 (inception) to September 30, 2024, stock-based compensation expense related to RSAs was less than $0.1 million. The following table summarizes the RSA activity for the nine months ended September 30, 2025:
|  | Number of RSAs |  |  | Weighted Average Grant Date Fair Value |
Unvested balance as of December 31, 2024 |  |  | 2,207,553 |  |  | $ | — |
Granted |  |  | — |  |  | $ | — |
Vested |  |  | (852,515 | ) |  | $ | — |
Unvested balance as of September 30, 2025 |  |  | 1,355,038 |  |  | $ | — |
Option Agreements and Paruka Warrant Obligation As part of the Option Agreements, (defined in Note 10 below) on December 31, 2024 the Company granted, and on December 31, 2025, will grant, Paruka a warrant to purchase a number of shares equal to 1.00% of outstanding shares as of the date of the grant on a fully-diluted basis, with an exercise price equal to the fair market value of the underlying shares on the grant date (the “Paruka Warrant Obligation”). The grant dates for the issuance of warrants were expected to be December 31, 2024 and December 31, 2025 as all terms of the award, including number of shares and exercise price, will be known by all parties. The Company determined that the 2024 and 2025 grants are two separate grants, as there would be no obligation for the 2025 grant had the Company exercised or terminated all of the options under the Option Agreements prior to December 31, 2024. The service inception period for the grant precedes the grant date, with the full award being vested as of the grant date with no post-grant date service requirement. Accordingly, the warrant expected to be granted to Paruka was accounted for as a liability on the balance sheet on the service inception date and, after the initial recognition, the liability is adjusted to fair value at the end of each reporting period, with changes in fair value recorded in the condensed consolidated statement of operations and comprehensive loss as stock-based compensation expense under research and development expenses. For the period from February 6, 2024 (inception) to September 30, 2024, $7.7 million was recognized as stock-based compensation expenses related to the December 31, 2024 Paruka Warrant Obligation. On issuance of the warrant to Paruka on December 31, 2024, the fair value of the warrant issued on December 31, 2024 of $10.4 million was reclassified from liability to equity on the condensed consolidated balance sheet as of December 31, 2024. As of September 30, 2025, the estimated fair value of the warrant to be granted on December 31, 2025 was $12.9 million. For the three and nine months ended September 30, 2025, $6.6 million and $9.7 million, respectively, was recognized as stock-based compensation expense related to the December 31, 2025 Paruka Warrant Obligation. As of September 30, 2025, there was $3.2 million in unamortized expense related to the December 31, 2025 Paruka Warrant Obligation. Employee Warrants As stated above, in July 2024, the Subscription Agreement was amended and restated, among other things, for employee warrants to be issued to certain Pre-Merger Oruka employees and directors prior to the Closing. During the period from February 6, 2024 (inception) to December 31, 2024, the Company issued 3,054,358 warrants at an exercise price of $7.80 per warrant, which are accounted as equity in the condensed consolidated financial statements. The employee warrants were subject to performance and service based vesting requirements and upon completion of the Merger the performance-based requirements had been achieved. During the three and nine months ended September 30, 2025, no employee warrants were granted. The following table summarizes the employee warrant activity during the nine months ended September 30, 2025:
|  | Number of Employee Warrants Outstanding |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Contractual Term (in Years) |  |  | Aggregate Intrinsic Value (in Thousands) |
Balance as of December 31, 2024 |  |  | 3,054,358 |  |  | $ | 7.80 |  |  |  | 9.5 |  |  | $ | 35,400 |
Granted |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Canceled/forfeited |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Balance as of September 30, 2025 |  |  | 3,054,358 |  |  | $ | 7.80 |  |  |  | 8.8 |  |  | $ | 34,911 |
Vested and expected to vest, September 30, 2025 |  |  | 3,054,358 |  |  | $ | 7.80 |  |  |  | 8.8 |  |  | $ | 34,911 |
Exercisable, September 30, 2025 |  |  | 1,050,013 |  |  | $ | 7.80 |  |  |  | 8.8 |  |  | $ | 12,002 |
Stock-Based Compensation Expense The following table summarizes the classification of the Company’s stock-based compensation expense in the condensed consolidated statements of operations and comprehensive loss (in thousands):
|  | Three Months Ended September 30, 2025 |  |  | Three Months Ended September 30, 2024 |  |  | Nine Months Ended September 30, 2025 |  |  | Period from February 6, 2024 (inception) to September 30, 2024 |
Research and development |  | $ | 8,341 |  |  | $ | 7,772 |  |  | $ | 14,712 |  |  | $ | 8,310 |
General and administrative |  |  | 1,824 |  |  |  | 1,229 |  |  |  | 5,413 |  |  |  | 1,459 |
Total |  | $ | 10,165 |  |  | $ | 9,001 |  |  | $ | 20,125 |  |  | $ | 9,769 |
As of September 30, 2025, total unrecognized compensation cost related to the unvested stock options was $28.0 million, which is expected to be recognized over a weighted average period of approximately 3.1 years. As of September 30, 2025, total unrecognized compensation cost related to the unvested RSAs was less than $0.1 million, which is expected to be recognized over a weighted average period of 2.4 years. As of September 30, 2025, the unrecognized compensation cost related to the employee warrants was $12.3 million, which is expected to be recognized over a weighted average period of 2.6 years. The following table summarizes the award types of the Company’s stock-based compensation expense in the condensed consolidated statements of operations and comprehensive loss (in thousands):
|  | Three Months Ended September 30, 2025 |  |  | Three Months Ended September 30, 2024 |  |  | Nine Months Ended September 30, 2025 |  |  | Period from February 6, 2024 (inception) to September 30, 2024 |
Paruka Warrant Obligation |  | $ | 6,595 |  |  | $ | 7,251 |  |  | $ | 9,684 |  |  | $ | 7,681 |
Employee warrants |  |  | 1,198 |  |  |  | 1,314 |  |  |  | 3,987 |  |  |  | 1,314 |
Stock options |  |  | 2,314 |  |  |  | 427 |  |  |  | 6,333 |  |  |  | 765 |
Employee stock purchase plan |  |  | 58 |  |  |  | 9 |  |  |  | 121 |  |  |  | 9 |
Total |  | $ | 10,165 |  |  | $ | 9,001 |  |  | $ | 20,125 |  |  | $ | 9,769 |

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