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Note 6 - Stockholders' Equity and Stock-based Compensation Expense

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Shareholders' Equity and Share-Based Payments [Text Block]

Note 6. Stockholders’ Equity and Stock-Based Compensation Expense

Common Stock Warrant Distribution

See Notes 2 and 11 regarding the distribution of common stock warrants on January 3, 2024.

Stock Option and Performance Award Activity in 2025

During the nine months ended September 30, 2025, stock options and unvested Performance Awards outstanding under the Company’s stock option plans changed as follows:

		*Stock Options*				*Performance Awards*
Outstanding as of December 31, 2024			4,463,028				7,142
Options granted			1,567,000				—
Options exercised			(225,209	)			—
Options forfeited/canceled			(1,695,726	)			—
Outstanding as of September 30, 2025			4,109,093				7,142

The weighted average exercise price per share of options outstanding at September 30, 2025 was $15.23. As outstanding options vest over the current remaining vesting period of 2.5 years, the Company expects to recognize stock-based compensation expense of $28.9 million. If and when outstanding Performance Awards vest, the Company will recognize stock-based compensation expense of $0.1 million over the implicit service period.

During the three months ended September 30, 2025, there were no stock options exercised. During the nine months ended September 30, 2025, there were 225,209 stock options exercised. Of the stock options exercised, 120,492 stock options were net settled in satisfaction of the exercise price, with no cash proceeds received. Cash proceeds to the Company for options not net settled totaled $90,000 during the nine months ended September 30, 2025.

Stock-based Compensation Expense in 2025

During the three and nine months ended September 30, 2025 and 2024, the Company’s stock-based compensation expense was as follows (in thousands):

		*Three months ended*								*Nine months ended*
		*September 30,*								*September 30,*
		*2025*				*2024*				*2025*				*2024*
Research and development		$	1,294			$	1,675			$	4,828			$	3,620
General and administrative			3,108				3,934				9,380				6,927
Total stock-based compensation expense		$	4,402			$	5,609			$	14,208			$	10,547

The Company estimates forfeitures for each award in determining stock-based compensation expense. There were no estimated forfeitures during the three and nine months ended September 30, 2025. There were no estimated forfeitures during the three and nine months ended September 30, 2024.

2018 Equity Incentive Plan

The Company’s Board of Directors (the “Board”) or a designated committee of the Board is responsible for administration of the Company’s 2018 Omnibus Incentive Plan, as amended in May 2022 (the “2018 Plan”) and determines the terms and conditions of each option granted, consistent with the terms of the 2018 Plan. The Company’s employees, directors, and consultants are eligible to receive awards under the 2018 Plan, including grants of stock options and Performance Awards. Share-based awards generally expire 10 years from the date of grant. The 2018 Plan provides for issuance of up to 5,000,000 shares of common stock, par value $0.001 per share, subject to adjustment as provided in the 2018 Plan.

When stock options or Performance Awards are exercised net of the exercise price and taxes, the number of shares of stock issued is reduced by the number of shares equal to the amount of taxes owed by the award recipient and that number of shares are cancelled. The Company then uses its cash to pay tax authorities the amount of statutory taxes owed by and on behalf of the award recipient.