Share-Based Compensation and Warrants

6 Months Ended

Dec. 31, 2025

Share-Based Compensation and Warrants

Share-Based Compensation and Warrants

Note 8 — Share-Based Compensation and Warrants

Inducement Grants

In connection with the appointment of the Company’s Chief Commercial Officer in August 2025 the Board of Directors approved the grant of stock options exercisable for the purchase of 275,000 shares of the Company’s common stock at an exercise price of $6.55 per share. These stock options qualify as inducement grants pursuant to Nasdaq Listing Rule 5635(c)(4) whereby the underlying shares were not authorized under any of the Company’s stock option plans (“Inducement Awards”). The stock options are exercisable until August 2035 and vest for (i) one-fourth of the option shares on the one-year anniversary of the employee start date, and (ii) one thirty-sixth of the remaining option shares vest on the same day of each month thereafter until the stock options are 100% vested. The fair value of this Inducement Award of $1.3 million was computed using the Black-Scholes-Merton (“BSM”) option-pricing model.

Additionally, in connection with the hiring of four employees during the six months ended December 31, 2025, the Company issued additional Inducement Awards, consisting of stock options exercisable for the purchase of an aggregate of 370,000 shares of the Company’s common stock. These stock options are exercisable for a ten-year term and vest for (i) one-fourth of the option shares on the one-year anniversary of each employee’s start date, and (ii) one thirty-sixth of the remaining option shares vest on the same day of each month thereafter until the stock options are 100% vested.

Equity Incentive Plans

Presented below is a summary of the number of shares authorized, outstanding, and available for future grants under the Company’s equity incentive plans as of December 31, 2025:


		Number of Shares
Description		Authorized		Outstanding		Available
2015 Plan		14,000		14,000		—
2016 Plan		121,200		121,200		—
2019 Plan		200,000		200,000		—
2021 Plan		21,051,536		14,702,929		6,348,607
Inducement Awards		1,500,000		742,500		757,500
Total		22,886,736		15,780,629	⁽¹⁾	7,106,107

(1)	Consists of approximately 13.2 million shares outstanding under stock option agreements and 2.6 million shares under restricted stock units.

The Company currently has one active stock option plan approved by shareholders which is the 2021 Plan. On November 19, 2025, the Company’s shareholders approved an amendment to the 2021 Plan, increasing the number of shares of common stock to be issued under the 2021 Plan up to approximately 21,950,000 shares of common stock, before accounting for reductions due to exercises. The 2021 Plan terminates on March 31, 2030. Pursuant to the 2021 Plan, no awards may be granted under the three legacy stock option plans shown in the table above, but all outstanding awards previously granted under those plans shall remain outstanding and subject to the terms of the respective plans. Stock options outstanding under the plans presented above expire pursuant to their contractual provisions on various dates through 2035.

In addition, inducement awards are allowed for grants of options pursuant to Nasdaq Listing Rule 5635(c)(4) whereby the underlying shares are not authorized under any of the Company’s stock option plans. Through December 31, 2025, the Board of Directors has authorized a total of 1,500,000 shares for inducement awards. The Board of Directors has discretion to issue 757,500 shares for future inducement awards as of December 31, 2025.

2022 Employee Stock Purchase Plan

On June 16, 2022, the Company’s shareholders approved the adoption of the 2022 Employee Stock Purchase Plan (the “2022 ESPP”). The 2022 ESPP provides an opportunity for employees to purchase the Company’s common stock through accumulated payroll deductions.

The 2022 ESPP has consecutive offering periods that begin approximately every 6 months commencing on the first trading day on or after July 1 and terminating on the last trading day of the offering period ending on December 31 and commencing on the first trading day on or after January 1 and terminating on the last trading day of the offering period ending on June 30. The 2022 ESPP reserves 500,000 shares for purchases. There have been no offering periods under the 2022 ESPP through December 31, 2025.

Stock Options Outstanding

For the six months ended December 31, 2025, the following table summarizes the combined stock option activity under the Company’s equity incentive plans and Inducement Awards:


		Shares		Price ⁽¹⁾			Term ⁽²⁾
Outstanding, beginning of period		13,027,994		$	4.03		7.7
Granted		2,221,000			9.23
Exercised		(328,134)	⁽³⁾		2.44
Expired		(4,700)			26.84
Forfeited		(1,753,031)			6.25
Outstanding, end of period		13,163,129	⁽⁴⁾		4.65		7.0
Vested, end of period		8,398,953	⁽⁵⁾		4.34		6.1

(1)	Represents the weighted average exercise price.

(2)	Represents the weighted average remaining contractual term for the number of years until the stock options expire.

(3)	The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during the six months ended December 31, 2025, was $1.8 million.

(4)	As of December 31, 2025, the intrinsic value of outstanding options was approximately $2.5 million.

(5)	As of December 31, 2025, the intrinsic value of vested stock options was approximately $1.5 million.

For the six months ended December 31, 2025, the aggregate fair value of stock options granted for approximately 2.2 million shares of common stock amounted to $14.8 million or approximately $6.67 per share as of the grant dates. Fair value of stock options was computed using the BSM option-pricing model and will result in the recognition of compensation expense ratably over the expected vesting period of the stock options. Unrecognized share-based compensation expense related to outstanding options is approximately $17.1 million as of December 31, 2025. This amount is expected to be recognized over a weighted average period of 2.1 years.

For the six months ended December 31, 2025, the fair value of stock options was estimated on the respective dates of grant, with the following weighted-average assumptions:


Market price of common stock on grant date		$	9.23
Expected volatility			84	%
Risk free interest rate			3.8	%
Expected term (years)			5.9
Dividend yield			0	%

Restricted Stock Units (“RSUs”)

For the six months ended December 31, 2025, the following table sets forth a summary of the combined RSU activity under the Company’s 2021 Plan:


		Shares		Price ⁽¹⁾
Unvested, beginning of period		1,056,500		$	4.55
Granted		1,915,000			10.11
Vested		—			—
Forfeited		(354,000)			9.51
Unvested, end of period		2,617,500			7.95

(1)	Represents the weighted average grant price based on the closing market price on the date of each of the RSU grants.

For the six months ended December 31, 2025, the aggregate fair value of RSUs granted for approximately 1.9 million shares of common stock amounted to $19.4 million or approximately $10.11 per share as of the grant dates. RSUs vest over a period of one to four years. Fair value is based on the closing market price for shares of the Company’s common stock on the date of grant and will result in the recognition of compensation cost ratably over the vesting period of the RSUs. Unrecognized share-based compensation expense related to RSUs is approximately $18.5 million as of December 31, 2025. This amount is expected to be recognized over a weighted average period of 2.4 years.

Share-Based Compensation Expense

Share-based compensation expense for the three and six months ended December 31, 2025 and 2024 is included under the following captions in the unaudited condensed consolidated statements of operations and comprehensive loss (in thousands):


		Three Months Ended						Six Months Ended
		December 31,						December 31,
		2025			2024			2025			2024
Research and development		$	1,578		$	721		$	2,745		$	1,433
General and administrative			1,833			724			3,197			1,412
Total		$	3,411		$	1,445		$	5,942		$	2,845

The aggregate unrecognized share-based compensation expense related to stock options and RSUs is approximately $35.6 million as of December 31, 2025. This amount is expected to be recognized over a weighted average period of 2.2 years.

Pre-Funded Warrants

PFWs are outstanding for a total of approximately 8.2 million shares as of December 31, 2025. Please refer to Note 7 for additional information about outstanding PFWs.

Legacy Warrants

In connection with an equity financing in October 2020, the Company issued warrants entitling the holders to purchase an aggregate of 820,001 shares of common stock. These warrants are exercisable at $19.50 per share for a period of seven years, may be exercised on a cash or cashless basis at the election of the holders, and the holders are entitled to share in any dividends or distributions payable to holders of common stock on an as-converted basis (the “Participating Warrants”). Additionally, the Company has issued warrants in conjunction with various debt and equity financings and for services. As of December 31, 2025, all of the warrants were vested. The Participating Warrants and other warrants are collectively referred to as the “Legacy Warrants.”

For the six months ended December 31, 2025, no Legacy Warrants were granted or exercised. The following table sets forth a summary of all Legacy Warrants for the six months ended December 31, 2025:


		Shares		Price ⁽¹⁾			Term ⁽²⁾
Outstanding, beginning of period		850,442		$	19.90		2.3
Expirations		(660)			67.55
Outstanding, end of period		849,782			19.86		1.8

(1)	Represents the weighted average exercise price.

(2)	Represents the weighted average remaining contractual term for the number of years until the warrants expire.