Company: LBRX
Filing Date: 2025-09-08
Form Type: S-1/A
Source: 0001193125-25-197877
Chunk: 166

Company: LB PHARMACEUTICALS INC
Filing Date: 2025-09-08
Form: S-1/A
Chunk 166
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 Topic 718, Compensation—Stock Compensation, or ASC Topic 718. We have issued stock-based compensation awards including stock options and restricted stock awards and we also account for certain issuances of warrants in accordance with ASC Topic 718. We measure the cost of employee, nonemployee, and director services received in exchange for an award of equity instruments based on the fair value of the award on the date of grant and recognize the related expense over the period during which the employee, nonemployee or director is required to provide service in exchange for the award on a straight-line basis. We estimate the fair value of each award on the date of grant using the Black-Scholes option-pricing model. This model requires the use of highly subject assumptions to determine the fair value of each stock-based award, including:

| • |     | Fair value of common stock. See “—Determination of the Fair Value of Common Stock” 
 below.                                                                             |

| • |     | Expected term. The expected term represents the period that the stock-based awards are expected to be                                                                       
 outstanding. The expected term for our stock options was calculated based on the weighted-average vesting term of the awards and the contract period, or simplified method. |

| • |     | Expected volatility. Since we are not yet a public company and do not have any trading history for our                                                                                                                                                
 common stock, the expected volatility was estimated based on the average historical volatilities of common stock of comparable publicly traded entities over a period equal to the expected term of the stock option grants. The comparable companies 
 were chosen based on their size, stage of their life cycle, or area of specialty. We will continue to apply this process until enough historical information regarding the volatility of our stock price becomes available.                           |

| • |     | Risk-free interest rate. The risk-free interest rate is based on a treasury instrument whose term is 
 consistent with the expected term of the stock options.                                              |

| • |     | Expected dividend yield. We have never paid dividends on our common stock and have no plans to pay 
 dividends on our common stock. Therefore, we used an expected dividend yield of zero.              |

Changes in the foregoing assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop. Determination of the Fair Value of Common Stock There are significant judgments and estimates inherent in the determination of the fair value of our common stock. These estimates and assumptions include a number of objective and