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Note 7 - Share-based Payment Awards

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 7 — Share-Based Payment Awards

In November 2018, the Company’s stockholders and board of directors approved the 2018 Equity Incentive Plan, as amended (the “2018 Plan”) which succeeded the 2017 Plan. The 2018 Plan was amended by the board of directors in December 2020. The Company has granted RSAs, stock options and RSUs for its common stock under the 2017 Plan and 2018 Plan as detailed in the tables below. There were 1,076,595 shares available for future issuance under the 2018 Plan as of September 30, 2025.

All stock options issued have been non-qualified stock options and the exercise price is the closing stock price of the Company's common stock on the date of grant. Non-qualified stock options typically have a ten-year life and non-qualified stock options that are expired, terminated, surrendered or canceled without having been fully exercised will be available for future awards under the 2018 Plan. In addition, the 2018 Plan provides that commencing January 1, 2019 and through January 1, 2028, the share reserve will be increased by 4% of the total number of shares outstanding as of the preceding December 31, subject to a reduction at the discretion of the Company’s board of directors. On January 1, 2023, the share reserve was increased by 1,014,124 shares based on the 25,353,119 shares of common stock outstanding at December 31, 2022. On January 1, 2024, the share reserve was increased by 1,027,522 shares based on the 25,688,062 shares of common stock outstanding at December 31, 2023. On January 1, 2025, the share reserve was increased by 1,068,323 shares based on the 26,709,084 shares of common stock outstanding at December 31, 2024. The exercise price for stock options granted is not less than the fair value of common stock as of the date of grant. The Company uses the closing stock price on the date of grant as the exercise price.

For the nine months ended September 30, 2025 and 2024, the Company’s total stock-based compensation expense was $4,388 and $2,383, respectively. Of these amounts, $4,268 and $2,138 were recorded in general and administrative (“G&A”) expenses during the nine months ended September 30, 2025 and 2024, respectively, and $120 and $245 were recorded in research and development expenses for the nine months ended September 30, 2025 and 2024, respectively.

Stock Options

The following table summarizes stock option activity during the nine months ended September 30, 2025:

										*Weighted*
						*Weighted*				*Average*
						*Average*				*Remaining*				*Aggregate*
						*Exercise*				*Contractual*				*Intrinsic*
		*Shares*				*Price*				*Term (Yrs)*				*Value*
Outstanding as of December 31, 2024			5,918,616			$	4.65
Issued			471,059			$	13.12
Exercised			(108,451	)		$	3.63
Forfeited/Cancelled			(316,220	)		$	4.99
Outstanding as of September 30, 2025			5,965,004			$	5.34				6.6			$	97,765
Options exercisable as of September 30, 2025			4,376,667			$	4.83				5.9			$	73,978
Options vested and expected to vest at September 30, 2025			5,965,004			$	5.34				6.6			$	97,765

The following table summarizes stock option activity during the nine months ended September 30, 2024:

										*Weighted*
						*Weighted*				*Average*
						*Average*				*Remaining*				*Aggregate*
						*Exercise*				*Contractual*				*Intrinsic*
		*Shares*				*Price*				*Term (Yrs)*				*Value*
Outstanding as of December 31, 2023			4,839,226			$	4.57
Issued			1,511,118			$	4.41
Exercised			(2,500	)		$	2.97
Forfeited/Cancelled			(264,717	)		$	4.61
Outstanding as of September 30, 2024			6,083,127			$	4.53				7.2			$	11,194
Options exercisable as of September 30, 2024			4,060,340			$	4.70				6.4			$	7,448
Options vested and expected to vest at September 30, 2024			6,083,127			$	4.53				7.2			$	11,194

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock at September 30, 2025 for those stock options that had strike prices lower than the fair value of the Company’s common stock.

Stock based compensation related to stock options was $3,747 and $1,991 for the nine-month periods ended September 30, 2025 and 2024, respectively. As of September 30, 2025, there was a total of $5,792 of unrecognized compensation costs related to non-vested stock option awards, which will be recognized over a weighted average period of approximately 2.6 years.

During the nine months ended September 30, 2025, the Company issued 108,451 shares of its common stock resulting from stock option exercises at a weighted average exercise price of $3.63 per share with an intrinsic value of $1,167. During the nine months ended September 30, 2024, the Company issued 2,500 shares of its stock resulting from stock option exercises at a weighted average exercise price of $2.97 per share with an intrinsic value of $2.

Restricted Stock Units (RSUs)

The following table summarizes restricted stock unit activity during the nine months ended September 30, 2025:

		*Number of Units*				*Weighted Average Grant-Date Fair Value Per Unit*
Outstanding and unvested as of December 31, 2024			226,068			$	3.82
Granted			197,326			$	13.27
Vested			(84,204	)		$	4.75
Forfeited			(44,373	)		$	6.92
Outstanding and unvested as of September 30, 2025			294,817			$	12.95

The following table summarizes restricted stock unit activity during the nine months ended September 30, 2024:

		*Number of Units*				*Weighted Average Grant-Date Fair Value Per Unit*
Outstanding and unvested as of December 31, 2023			274,204			$	2.63
Granted			—			$	—
Vested			(90,402	)		$	2.63
Forfeited			(23,000	)		$	2.63
Outstanding and unvested as of September 30, 2024			160,802			$	2.63

Stock-based compensation related to RSUs was $611 and $171 for the nine-month periods ended September 30, 2025 and 2024, respectively. As of September 30, 2025, there was $2,239 of unrecognized stock-based compensation expense related to unvested RSUs, which will be recognized over a weighted average period of approximately 2.7 years.

Employee Stock Purchase Plan

The Company’s 2018 Employee Stock Purchase Plan (“ESPP”) provides for an initial reserve of 150,000 shares, and this reserve is automatically increased on January 1 of each year by the lesser of 1% of the outstanding shares of common stock at December 31 of the preceding year or 150,000 shares of the Company's common stock, subject to reduction at the discretion of the Company’s board of directors. As of September 30, 2025, there were 842,581 shares available for issuance under the ESPP.

The annual offerings consist of two stock purchase periods, with the first purchase period ending in June and the second ending in December. The terms of the ESPP permit employees of the Company to use payroll deductions to purchase stock at a price per share that is at least the lesser of (1) 85% of the fair market value of a share of common stock on the first date of an offering or (2) 85% of the fair market value of a share of common stock on the date of purchase. After the offering period ends, subsequent twelve-month offering periods automatically commence over the term of the ESPP on the day that immediately follows the conclusion of the preceding offering, each consisting of two purchase periods approximately six months in duration. The terms of the ESPP provide a restart feature if the Company's stock price is lower at the end of a six-month period within the twelve-month offering period than it was at the beginning of the twelve-month offering period.

The Company recorded an expense of $30 and $145 related to the ESPP during the nine-month periods ended September 30, 2025 and 2024, respectively. During the nine-month periods ended September 30, 2025, there were no shares issued under the ESPP due to the Company being unable to issue shares associated with ESPP purchases as a result of the previously disclosed requirement to file audited financial statements of INCRELEX® for the years ended December 31, 2023 and 2022 and for the nine months ended September 30, 2024 and 2023, as well as unaudited proforma financial information for the years ended December 31, 2024 and 2023, related to the purchase of INCRELEX® from Ipsen S. A. As of September 30, 2025 and December 31, 2024, the accompanying Condensed Balance Sheet include $145 and $42, respectively, in accrued liabilities for employee ESPP contributions.