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Note 6 - Stock-Based Compensation | 3 Months Ended
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Mar. 31, 2026
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] | Note 6. Stock-Based Compensation 2017 Equity Incentive Plan In May 2017, the Company's Board of Directors (the "Board") adopted, and the Company’s stockholders approved, the Company’s 2017 Equity Incentive Plan (the "2017 Plan"). The 2017 Plan has a 10-year term, and provides for the grant of stock options, stock appreciation rights, restricted stock awards, RSUs, performance units, and performance shares to employees, directors and consultants of the Company and any parent or subsidiary of the Company. Subject to an annual evergreen increase and adjustment in the case of certain capitalization events, the Company initially reserved 1,500,000 shares of the Company’s common stock for issuance pursuant to awards under the 2017 Plan. In addition, shares remaining available under the Company’s 2015 Equity Incentive Plan, as amended (the “2015 Plan”), and shares reserved but not issued pursuant to outstanding equity awards that expire or terminate without being exercised or that are forfeited or repurchased by the Company will be added to the shares of common stock available for issuance under the 2017 Plan. The 2017 Plan is administered by the Compensation Committee of the Board. The number of shares of the Company’s common stock available for issuance under the 2017 Plan also include an annual increase on the first day of each fiscal year, equal to the least of (i) 1,200,000 shares, (ii) 4% of the Company’s common stock outstanding at December 31 of the immediately preceding year, or (iii) such number of shares as determined by the Board. As a result of this provision, an additional 1,200,000 shares became available for issuance under the 2017 Plan on January 1, 2026. As of March 31, 2026, 3,670,287 shares of common stock remained available for issuance under the 2017 Plan. 2017 Inducement Equity Incentive Plan In November 2017, the Board adopted the 2017 Inducement Equity Incentive Plan (the “Inducement Plan”) without stockholder approval and initially reserved 1,000,000 shares of the Company’s common stock for insurance pursuant to equity awards granted under the Inducement Plan. The Inducement Plan has a 10-year term and provides for the grant of equity-based awards, including non-statutory stock options, RSUs, restricted stock, stock appreciation rights, performance shares and performance units, and its terms are substantially similar to the 2017 Plan, including with respect to treatment of equity awards in the event of a “merger” or “change in control” as defined under the Inducement Plan. Options issued under the Inducement Plan may have a term up to ten years and have variable vesting provisions. New hire grants generally vest 25% per year starting upon the first anniversary of the grant. Equity-based awards issued under the Inducement Plan are only issuable to individuals not previously engaged as employees or non-employee directors of the Company prior to the Inducement Plan’s adoption date. As of March 31, 2026, 2,476,359 shares of common stock were available for issuance under the Inducement Plan. 2017 Employee Stock Purchase Plan In May 2017, the Board adopted, and the Company's stockholders approved, the Company’s 2017 Employee Stock Purchase Plan (the "2017 ESPP"). The 2017 ESPP is a broad-based plan that provides employees of the Company and its designated affiliates with the opportunity to become stockholders through periodic payroll deductions that are applied towards the purchase of Company common shares at a discount from the then-current market price. Subject to adjustment in the case of certain capitalization events, a total of 250,000 common shares of the Company were available for purchase at adoption of the 2017 ESPP. Pursuant to the 2017 ESPP, the annual share increase pursuant to the evergreen provision is determined based on the least of (i) 450,000 shares, (ii) 1.5% of the Company’s common stock outstanding as of December 31 of the immediately preceding year, or (iii) such number of shares as determined by the Board. As a result of this provision, an additional 450,000 shares became available for issuance under the 2017 ESPP on January 1, 2026. As of March 31, 2026, 1,265,365 shares of common stock were available for issuance under the 2017 ESPP. A summary of stock option activity under the 2015 Plan, 2017 Plan and Inducement Plan for the three months ended March 31, 2026 is as follows:
|  | Stock Options Outstanding |
|  | Number of Shares |  |  | Weighted-Average Exercise Price |  |  | Weighted-Average Remaining Life |  |  | Aggregate Intrinsic Value |
|  |  |  |  |  |  |  |  |  | (in years) |  |  | (in thousands) |
Balances—December 31, 2025 |  |  | 13,086,288 |  |  | $ | 11.87 |  |  |  | 6.99 |  |  | $ | 58,029 |
Granted |  |  | 72,104 |  |  |  | 17.51 |  |  |  |  |  |  |  |  |
Exercised |  |  | (339,840 | ) |  |  | 5.14 |  |  |  |  |  |  |  |  |
Canceled |  |  | (1,699,202 | ) |  |  | 6.42 |  |  |  |  |  |  |  |  |
Balances—March 31, 2026 |  |  | 11,119,350 |  |  | $ | 12.95 |  |  |  | 6.39 |  |  | $ | 102,320 |
Exercisable—March 31, 2026 |  |  | 5,121,924 |  |  | $ | 13.84 |  |  |  | 4.48 |  |  | $ | 45,833 |
For the three months ended March 31, 2026, the Company granted 200,000 RSUs to employees with service-based vesting conditions and a weighted-average grant date fair value of $20.93. As of March 31, 2026, the Company had 200,000 RSUs outstanding. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2026 and 2025 was $5.6 million and $0.7 million, respectively. Intrinsic values of options exercised are calculated as the difference between the exercise price of the underlying options and the fair value of the common stock on the date of exercise. Intrinsic values of options outstanding are calculated as the difference between the exercise price of the underlying options and the fair value of the common stock as of the reporting date. For the three months ended March 31, 2026 and 2025, the weighted-average grant date fair value of options granted was $13.60 and $13.86, respectively. The Company has granted stock options with service-based, performance-based, market-based, and both market-based and performance-based vesting conditions. The Company grants service-based options which vest and become exercisable, subject to the individual’s continued employment or service through the applicable vesting date. Service-based options can have various vesting schedules, most commonly new hire grants, which generally vest 25% per year starting upon the first anniversary of the grant. Performance-based stock options granted to certain Company executives and other employees contain performance conditions related to financial measures and achievements of strategic and operational milestones. The options will vest and become exercisable once the specific performance condition is fulfilled. Market-based stock options granted to certain Company executives and other employees contain market conditions related to achievement of market capitalization targets. The options will vest and become exercisable once the specific market capitalization target is fulfilled. Both market-based and performance-based stock options granted to certain Company executives contain market conditions related to the achievement of market capitalization targets as well as the achievement of revenue and margin metrics. The options will vest and become exercisable once both the specific market capitalization targets as well as the specific revenue and margin targets are fulfilled. Stock-Based Compensation Expense Total stock-based compensation expense in the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):
|  | Three Months Ended March 31, |
|  | 2026 |  |  | 2025 |
Cost of product revenue |  | $ | 44 |  |  | $ | — |
Research and development |  |  | 1,758 |  |  |  | 2,762 |
Selling, general and administrative |  |  | 110 |  |  |  | 2,919 |
Total stock-based compensation expense |  | $ | 1,912 |  |  | $ | 5,681 |
As of March 31, 2026, not all of the performance conditions of the performance options are probable to be achieved. Stock-based compensation expense has only been recognized for those conditions that are assumed to be probable. Total stock-based compensation expense by award type was as follows (in thousands):
|  | Three Months Ended March 31, |
|  | 2026 |  |  | 2025 |
Service-based options |  | $ | 2,692 |  |  | $ | 4,107 |
Market-based options |  |  | (907 | ) |  |  | 1,469 |
Restricted stock units |  |  | 31 |  |  |  | — |
ESPP |  |  | 96 |  |  |  | 105 |
Total stock-based compensation expense |  | $ | 1,912 |  |  | $ | 5,681 |
As of March 31, 2026, the Company had a total of $24.5 million and $4.2 million of unrecognized stock-based compensation expense for service-based stock options and restricted stock units awards outstanding, which is expected to be recognized over a weighted average period of 5.2 years and 3.0 years, respectively. As of March 31, 2026, the Company had a total of $5.6 million of unrecognized stock-based compensation expense for market-based stock options outstanding, which is expected to be recognized over a weighted average period of 1.9 years. Additionally, total unrecognized stock-based compensation expense related to performance-based and both market-based and performance-based stock options outstanding was $18.9 million, which is not expected to be recognized unless and until the conditions are probable of occurring. The fair value of service-based stock options granted under the 2017 Plan and Inducement Plan and the shares available for purchase under the ESPP were determined using the Black-Scholes option pricing model on the grant date and modification date. The Company estimated the fair value of market-based stock options and both market and performance-based stock options using a Monte Carlo simulation model on the grant date. The following summarizes the range of assumptions used in calculating the fair value of the awards with stock options grouped by valuation methodology:
| Three Months Ended March 31, |
| 2026 |  | 2025 |
Service-Based Stock Options |  |  |  |  |  |
Expected term (in years) |  | 5.1 - 6.3 |  |  | 5.0 - 6.9 |
Expected volatility |  | 93% - 95% |  |  | 93% - 100% |
Risk-free interest rate |  | 3.7% - 3.8% |  |  | 4.1% - 4.6% |
Expected dividend yield |  | — |  |  | — |
Market-Based, and Market and Performance-Based Stock Options |  |  |  |  |  |
Expected term (in years) |  | — |  |  | 5.5 - 8.9 |
Expected volatility |  | — |  |  | 90% |
Risk-free interest rate |  | — |  |  | 4.4% - 4.6% |
Expected dividend yield |  | — |  |  | — |
ESPP |  |  |  |  |  |
Expected term (in years) |  | 0.5 - 1.0 |  |  | 0.5 - 1.0 |
Expected volatility |  | 71.7% - 86.6% |  |  | 98% |
Risk-free interest rate |  | 3.6% - 3.7% |  |  | 4.1% - 4.3% |
Expected dividend yield |  | — |  |  | — |

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