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Stock-Based Compensation

12 Months Ended

Dec. 31, 2025

Stock-Based Compensation [Abstract]

Stock-Based Compensation

5. Stock-Based Compensation

In November 2021, the Company and Mstone entered a Service Agreement, pursuant to which Mstone provides certain support and business development-related services to the Company. In order to preserve capital for operating and clinical development expenses, in May 2023, the Company and Mstone entered into a Letter Agreement, pursuant to which the Company issued 1,250,000 shares of Common Stock (the “Share Obligation”) with an aggregate grant fair value of $5.6 million to Mstone as compensation for advisory services. The grant date fair value per share was determined based upon the most recently available third-party valuation of Common Stock. The shares were fully vested upon issuance and were issued in exchange for a 50% fee reduction for one year of advisory services to be provided from June 2023 through June 2024. The Company determined that this issuance of vested shares in return for future service met the criteria for capitalization as a prepaid expense and was amortized on a straight-line basis. For the year ended December 31, 2025, total stock-based compensation expense under this agreement was zero due to the expiration of the Letter Agreement in June 2024. For the year ended December 31, 2024, total stock-based compensation expense under this agreement was $2.3 million, of which $1.7 million was recorded as research and development expense and $578 thousand was recorded as general and administrative expense.

The Company and the Advisor entered into the Engagement Letter on October 18, 2024. The Company agreed to issue 796,937 shares of the Company’s Common Stock, of which 50% was fully vested upon issuance, with an aggregate grant date fair value of $467 thousand to the Advisor as compensation for advisory services. The remaining 50% is vested contingent upon a public listing of the Company. The grant date fair value per share was determined based upon the price per share from recent stock issuances to certain investors at that time. The Company determined that this issuance of vested shares in return for future service met the criteria for capitalization as a prepaid expense and was amortized on a straight-line basis over 13 months. For the years ended December 31, 2025 and 2024, total stock-based compensation expense under this agreement was $380 thousand and $87 thousand recorded as general and administrative expense, respectively.

2022 Equity Incentive Plan

In March 2022, the Board approved the Company’s 2022 Equity Incentive Plan (the “Incentive Plan”). The Incentive Plan provides for the grant of options, stock appreciation rights, restricted stock units, restricted stock, and other stock-based awards and for Incentive Bonuses, which may be paid in cash, shares of Common Stock, or a combination thereof. The aggregate number of shares of Common Stock issuable under the Incentive Plan initially is 1,590,573 shares, plus a 4% annual increase on January 1 of each year beginning in 2023 and ending on January 1, 2032, subject to Board approval (the “Share Pool”). In October 2024, the Board increased the Share Pool to 6.3 million shares of Common Stock. As of December 31, 2025, there were 2,063,861 shares available to be issued pursuant to the Incentive Plan. In advance of the direct listing offering, the Company adopted the Polaryx Therapeutics, Inc. 2025 Equity Incentive Plan (the “2025 Plan”) in December 2025. Upon adoption of the 2025 Plan, no further awards will be granted under the Incentive Plan.

2025 Equity Incentive Plan

In December 2025, the Company adopted the 2025 Plan. The purpose of the 2025 Plan is to promote and closely align the interests of our employees, officers, non-employee directors, and other service providers and our stockholders by providing stock-based compensation and other performance-based compensation. The objectives of the 2025 Plan are to attract and retain the best available personnel for positions of substantial responsibility and to motivate participants to optimize our profitability and growth through incentives that are consistent with our goals and that link the personal interests of participants to those of our stockholders. The 2025 Plan allows for the grant of stock options, both incentive stock options and “non-qualified” stock options; stock appreciation rights (“SARs”), alone or in conjunction with other awards; restricted stock and RSUs; incentive bonuses, which may be paid in cash, stock, or a combination thereof; and other stock-based awards. We refer to these collectively herein as “Awards.”

Stock Subject to 2025 Plan

The form of 2025 Plan approved in December 2025 provided that the maximum number of shares of common stock that may be issued under the 2025 Plan will not exceed 1,500,000 shares (the “Share Pool”); however, the Share Pool will be increased on January 1 of each calendar year beginning in 2026 by a number of shares equal to 5% of the outstanding shares of common stock on the immediately preceding December 31 (or such lesser amount as approved by the Administrator). As such, the Share Pool was increased by 2,367,158 shares on January 1, 2026. The Share Pool is subject to certain adjustments in the event of a change in our capitalization and was adjusted to reflect the Reverse Stock Split. Following the Reverse Stock Split and taking into account the increase to the Share Pool on January 1, 2026, the Share Pool is 3,867,158 shares. Shares of common stock issued under the 2025 Plan may be either authorized and unissued shares or previously issued shares acquired by us. On termination or expiration of an Award under the 2025 Plan, in whole or in part, the number of shares of common stock subject to such Award but not issued thereunder or that are otherwise forfeited back to the Company will again become available for grant under the 2025 Plan. Additionally, shares retained or withheld in payment of any exercise price, purchase price, or tax withholding obligation of an Award will again become available for grant under the 2025 Plan.

Fair Value Inputs

The calculation of the fair value of awards requires an estimate of the Company’s equity value. As the Company historically has been a privately held company with no trading history for its Common Stock to date, the estimated fair value of the Company’s Common Stock has been determined by management and approved by the Board. To determine the fair value, management considered the price per share from recent stock issuances to certain investors at that time and an assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant. Additional factors include, among others, the nature and history of the Company’s business; the Company’s stage of development and commercialization; external market conditions; valuations of the Company’s industry peers; and the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company.

Restricted Stock Units

As of December 31, 2025, there were 4,186,139 restricted stock units outstanding. Pursuant to the amendment as executed on July 31, 2025, these restricted stock units vest over time but are only deliverable upon a change in control of the Company that occurs within seven years following the applicable date of grant. Vesting of the restricted stock units is contingent upon the recipient’s services to the Company through three or four installments on the first three or four anniversaries of the vesting commencement date. The change in control requirement represents a performance condition that is recognized when it is probable, and therefore no compensation expense will be recorded, nor inclusion of the shares within the basic and diluted net income (loss) per share calculations, until the occurrence of a change in control of the Company.

The Company measures restricted stock compensation costs based on the stock price at the grant date less forfeitures as incurred.

The following table presents a summary of our restricted stock activity for the years ended December 31, 2025 and 2024:

		Number of Awards				Weighted Average Grant date Fair Value (per share)
Non-vested at December 31, 2023			955,953
Granted			1,825,000			$	1.78
Vested			—
Forfeited or exercised⁽¹⁾			(110,346	)
Non-vested at December 31, 2024			2,670,607
Granted			2,092,757			$	1.85
Vested			—
Forfeited or exercised			(577,225	)
Non-vested at December 31, 2025			4,186,139

⁽¹⁾	Forfeitures for the year ended December 31, 2024 were revised to reflect immaterial changes for certain terminated employees. There was no impact to any recorded amounts in the financial statements.

As of December 31, 2025, there was $7.6 million of total unrecognized compensation cost related to restricted stock units that will be recognized over a remaining weighted average service period of 2.9 years and upon a change in control of the Company. In connection with the amendment executed on July 31, 2025, the transaction was treated as a type IV modification (improbable to improbable) in accordance with ASC 718. As such, the Company calculated a new grant date fair value for the amended restricted stock units. The unrecognized compensation expense associated with these restricted stock units reflects the new grant date fair value as of the modification date. The fair value was equal to price per share from recent stock issuances to certain investors at that time which was $1.78 per share.

The Company recognized a total of $4.7 million stock-based compensation related to the Incentive Plan and shares issued to Mstone, Rush and Maxim Group LLC, of which $4.3 million and $380 thousand are included within research and development expenses and general and administrative expenses, respectively, in the statement of operations and comprehensive loss for the year ended December 31, 2025. The Company recognized a total of $2.4 million stock-based compensation related to the Incentive Plan and shares issued to Mstone and Maxim Group LLC, of which $1.7 million and $665 thousand are included within research and development expenses and general and administrative expenses, respectively, in the statement of operations and comprehensive loss for the year ended December 31, 2024.