On December 4, 2014, the Company’s stockholders approved the 2014 Stock Plan (“2014 Plan”), and on April 25, 2019 amended, restated and re-named the 2014 Plan as the 2019 Equity Incentive Plan (the “Quince 2019 Plan”), which became effective as of May 7, 2019, the day prior to the effectiveness of the registration statement filed in connection with the IPO. The remaining shares available for issuance under the 2014 Plan were added to the shares reserved for issuance under the Quince 2019 Plan.

The Quince 2019 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, RSUs, performance units, and performance shares to the Company’s employees, directors, and consultants. As of June 30, 2023, the maximum aggregate number of shares that remain available for issuance under the Quince 2019 Plan is 10,036,489 shares of the Company’s common stock. In addition, the number of shares available for issuance under the Quince 2019 Plan will be annually increased on the first day of each fiscal years beginning with fiscal 2020, by an amount equal to the least of (i) 2,146,354 shares of common stock; (ii) 4% of the outstanding shares of its common stock as of the last day of its immediately preceding fiscal year; and (iii) such other amount as the Board may determine.

The Quince 2019 Plan may be amended, suspended or terminated by the Board at any time, provided such action does not impair the existing rights of any participant, subject to stockholder approval of any amendment to the Quince 2019 Plan as required by applicable law or listing requirements. Unless sooner terminated by the Board, the Quince 2019 Plan will automatically terminate on April 23, 2029.

As of June 30, 2023, the Company had 5,201,073 shares available for future issuance under the Quince 2019 Plan.

Activity for service-based stock options under the Quince 2019 Plan is as follows:


	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2022		3,319,711		$	16.07		4.77	$	65
Options granted		1,559,958			0.95	—		—
Options exercised		(189,799	)		0.43	—			162
Options cancelled / forfeited		(1,549,075	)		15.13	—		—
Balance at June 30, 2023		3,140,795		$	9.97		7.61	$	814
Options vested and expected to vest as of June 30, 2023		3,140,795			9.97		7.61		814
Options exercisable as of June 30, 2023		1,316,814		$	19.77		5.13	$	154

For the three and six months ended June 30, 2023 the Company recognized stock-based compensation expense of $604,000 and $1,378,000, respectively, related to options granted to employees and non-employees. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the condensed consolidated statement of operations and comprehensive loss for stock-based compensation arrangements. As of June 30, 2023, total unamortized employee stock-based compensation was $3.9 million, which is expected to be recognized over the remaining estimated vesting period of 2.27 years.

There was no activity or balance of any PSOs from the 2019 plan for the six months ended June 30, 2023. For the three and six months ended June 30, 2023, the Company recognized stock-based compensation expense of $0 related to these PSOs. For the three and six months ended June 30, 2022, the Company recognized stock-based compensation expense of $0 and $2,044,000, respectively, related to these PSOs. As of June 30, 2023 and December 31, 2022, there was no remaining unamortized stock-based compensation related to PSOs.

The following table summarizes activity under the Company’s RSUs from the Quince 2019 Plan and related information:


	Quince 2019 Plan
	Restricted Stock Units Outstanding
	Number of Shares			Weighted Average Grant Date Fair Value
Unvested - December 31, 2022		30,876		$	4.30
RSUs granted		—		—
RSUs vested		(7,225	)	$	4.30
RSUs cancelled		(19,188	)	$	4.30
Unvested - June 30, 2023		4,463		$	4.30

The fair value of the RSUs is determined on the grant date based on the fair value of the Company’s common stock. The

fair value of the RSUs is recognized as expense ratably over the vesting period of two years. The total grant date fair value of the RSUs vested during the three and six months ended June 30, 2023 was $6,400 and $31,100, respectively. The aggregate intrinsic value of the shares of the RSUs vested during the three and six months ended June 30, 2023 was $2,200 and $7,900, respectively.

For the three and six months ended June 30, 2023, the Company recognized stock-based compensation expense of

$6,000 and $24,000, respectively, related to these RSUs. As of June 30, 2023, total unamortized stock-based compensation related to RSUs was $17,000, which is expected to be recognized over the remaining estimated vesting period of 0.68 years.

On May 19, 2022, in accordance with the term of the Merger Agreement, the Company assumed the 2019 Novosteo, Inc Equity Incentive Plan (the "2019 Novosteo Plan"). The 2019 Novosteo Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, RSUs, performance units, and performance shares to the Novosteo legacy employees. On the closing date, each outstanding Novosteo stock option granted under Novosteo’s equity compensation plans was converted into a corresponding stock option with the number of shares underlying such option and the applicable exercise price adjusted based on the exchange ratio of 0.0911. Each such converted stock option continues to be subject to substantially the same terms and conditions as applied to the corresponding Novosteo stock option prior to the Novosteo Acquisition. The maximum aggregate number of shares that may be issued under the 2019 Novosteo Plan is 544,985 shares of the Company’s common stock.

The 2019 Novosteo Plan may be amended, suspended or terminated by the Board at any time, provided such action does not impair the existing rights of any participant, subject to stockholder approval of any amendment to the 2019 Novosteo Plan as required by applicable law or listing requirements. Unless sooner terminated by the Board, the 2019 Novosteo Plan will automatically terminate on May 20, 2029.

As of June 30, 2023, the Company had 88,265 shares available for future issuance under the 2019 Novosteo Plan.

Activity for service-based stock options under the 2019 Novosteo Plan is as follows:


	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2022		503,105		$	0.55		9.23	$	44
Options granted		—			—		—		—
Options exercised		(3,027	)		0.55		—		3
Options cancelled / forfeited		(37,848	)		0.55		—		—
Balance at June 30, 2023		462,230		$	0.55		8.73	$	441
Options vested and expected to vest as of June 30, 2023		462,230			0.55		8.73		441
Options exercisable as of June 30, 2023		144,444		$	0.55		8.73	$	138

For the three and six months ended June 30, 2023, the Company recognized stock-based compensation expense of $72,000 and $131,000, respectively, related to options granted to employees and non-employees for the 2019 Novosteo plan. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the condensed consolidated statement of operations and comprehensive loss for stock-based compensation arrangements. As of June 30, 2023, total unamortized employee stock-based compensation was $0.8 million, which is expected to be recognized over the remaining estimated vesting period of 2.73 years.

On May 19, 2022, in accordance with the term of the Merger Agreement, the Company assumed a number of restricted stock awards ("RSAs") agreements with certain employees. Each outstanding Novosteo RSA was converted into a corresponding RSA with the number of shares underlying such RSA adjusted based on the exchange ratio of 0.0911. Each such converted RSA will continue to be subject to substantially the same terms and conditions as applied to the corresponding Novosteo RSA prior to the Novosteo Acquisition.

Restricted Stock Awards


	Restricted Stock Awards Outstanding
	Number of Shares			Weighted Average Grant Date Fair Value
Unvested - December 31, 2022		427,401		$	3.30
RSAs granted		—		—
RSAs vested		(76,803	)		3.30
RSAs cancelled		(8,536	)		3.30
Unvested - June 30, 2023		342,062		$	3.30

For the three and six months ended June 30, 2023, the Company recognized stock-based compensation expense of $120,000 and $248,000, respectively, related to restricted stock awards. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the condensed consolidated statement of operations and comprehensive loss for stock-based compensation arrangements. As of June 30, 2023, total unamortized employee stock-based compensation was $1.1 million, which is expected to be recognized over the remaining estimated vesting period of 2.29 years.

On May 9, 2022, the Board approved 4,000,000 shares of the Company’s common stock that may be offered or issued under the Quince Therapeutics, Inc. 2022 Inducement Plan (the "2022 Inducement Plan"). The 2022 Inducement Plan was adopted by the independent members of the Board without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. In accordance with rule awards under those plans may only be made to an employee who has not previously been an employee or member of the Board or of any board of directors of any parent or subsidiary of the Company, or following a bona fide period of non-employment by the Company or a parent or subsidiary, if he or she is granted such award in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. The terms and conditions of the 2022 Inducement Plan are substantially similar to those of the Quince 2019 Plan.

As of June 30, 2023, the Company had 301,245 shares available for future issuance under the 2022 Inducement Plan.

Activity for service-based stock options under the 2022 Inducement Plan is as follows:


	Number of Options and Unvested Shares			Weighted Average Exercise Price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
								(In thousands)
Balance at December 31, 2022		3,742,255		$	2.98		9.39	$	—
Options granted		—			—		—		—
Options exercised		—			—		—		—
Options cancelled / forfeited		(43,500	)		2.98		—		—
Balance at June 30, 2023		3,698,755		$	2.98		8.90	$	—
Options vested and expected to vest as of June 30, 2023		3,698,755			2.98		8.90		—
Options exercisable as of June 30, 2023		1,001,745		$	2.98		8.90	$	—

For the three and six months ended June 30, 2023, the Company recognized stock-based compensation expense of $519,000 and $1,022,000, respectively, related to options granted to employees and non-employees for the 2022 Inducement plan. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the condensed consolidated statement of operations and comprehensive for stock-based compensation arrangements. As of June 30, 2023, total unamortized employee stock-based compensation was $6.1 million, which is expected to be recognized over the remaining estimated vesting period of 2.90 years.

The following table summarizes employee and non-employee stock-based compensation expense for the three and six months ended June 30, 2023 and 2022 and the allocation within the condensed consolidated statements of operations and comprehensive loss (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
General and administrative expense	$	946	$	3,267	$	2,069	$	7,699
Research and development expense		375		1,784		734		6,593
Total stock-based compensation	$	1,321	$	5,051	$	2,803	$	14,292

On April 24, 2019, the Board adopted its 2019 Employee Stock Purchase Plan (the “2019 ESPP”), which was subsequently approved by the Company’s stockholders and became effective on May 7, 2019, the day immediately prior to the effectiveness of the registration statement filed in connection with the IPO. The 2019 ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code (the “Code”) for U.S. employees. In addition, the 2019 ESPP authorizes grants of purchase rights that do not comply with Section 423 of the Code under a separate non-423 component for non-U.S. employees and certain non-U.S. service providers. The Company has reserved 1,494,530 shares of common stock for issuance under the 2019 ESPP. In addition, the number of shares reserved for issuance under the 2019 ESPP will be increased automatically on the first day of each fiscal year for a period of up to ten years, starting with the 2020 fiscal year, by a number equal to the least of: (i) 536,589 shares; (ii) 1% of the shares of common stock outstanding on the last day of the prior fiscal year; or (iii) such lesser number of shares determined by the Board. The 2019 ESPP is expected to be implemented through a series of offerings under which participants are granted purchase rights to purchase shares of the Company’s common stock on specified dates during such offerings. The Company has not yet approved an offering under the 2019 ESPP.

On April 5, 2023, the Board declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of the common stock, par value $0.001 per share (the “Common Shares”), of the Company. The dividend is effective as of April 17, 2023 (the “Record Date”) with respect to stockholders of record on that date. The Rights will also attach to new Common Shares issued after the Record Date. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of

Series A Junior Participating Preferred Stock, par value $0.001 per share, (the “Preferred Shares”), of the Company at a price of $6.00 per one one-thousandth of a Preferred Share, subject to adjustment. The descriptions and terms of the Rights are set forth in a Rights Agreement, dated as of April 5, 2023 (the “Rights Agreement"), between the Company and American Stock Transfer & Trust Company, LLC. The Rights will expire on April 5, 2024, unless the Rights are earlier redeemed or exchanged by the Company.