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STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2025

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

10. STOCK-BASED COMPENSATION

Stock-based compensation awards consist of stock options, restricted stock units and bonus shares issued under the Company’s equity incentive plans, which include the 2013 Plan and the Inducement Plan.

The Company’s stockholders approved amendments to the 2013 Plan to increase the authorized number of shares of Common Stock available and reserved for issuance under the 2013 Plan by 3,000,000 shares on May 30, 2024, and an additional 20,000,000 shares on May 27, 2025.

Under the 2013 Plan, the Company may grant awards of stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards and cash bonus awards to eligible persons. Equity awards under the 2013 Plan are granted from time to time at the discretion of the Compensation Committee of the Board (the “Committee”), with vesting periods and other terms as determined by the Committee with a maximum term of 10 years. The 2013 Plan is administered by the Committee, which can delegate the administration to the Board, other committees or to such other officers and employees of the Company as designated by the Committee and permitted by the 2013 Plan. As of September 30, 2025, 48,281 shares were available for future issuances under the 2013 Plan.

The Inducement Plan provides for the grant of equity-based awards, including RSUs, restricted stock, performance shares and performance units. Under the Inducement Plan, the Company may grant equity awards for the sole

purpose of recruiting and hiring new employees. As of September 30, 2025, 114,429 shares were available for future issuances under the Inducement Plan.

The Company has elected to account for forfeitures as they occur rather than estimating forfeitures. Expense associated with an award that is forfeited prior to vesting will be reversed accordingly. For the three and nine months ended September 30, 2025, the Company recorded stock-based compensation expense of $1.5 million and $2.4 million, respectively. For the three and nine months ended September 30, 2024, the Company recorded stock-based compensation expense of $0.4 million and $0.9 million, respectively. Stock compensation expense is recorded in the “General and administrative expenses” line item within the Condensed Consolidated Statements of Operations.

Stock Options

Stock options are valued using the Black-Scholes option pricing model on the date of grant. The Company accounts for forfeitures upon occurrence.

The following table summarizes stock options outstanding for the nine months ended September 30, 2025 and 2024:


		September 30, 2025					September 30, 2024
				Weighted					Weighted
		Number of		Average			Number of		Average
		Stock		Exercise			Stock		Exercise
		Options		Price			Options		Price
Stock options outstanding at beginning of period		649,345		$	1.91		424,826		$	2.66
Granted		16,390			0.48		224,519			0.49
Stock options outstanding at end of period		665,735			1.88		649,345			1.91
Stock options exercisable at end of period		665,735		$	1.88		424,826		$	2.66

All options outstanding for the nine months ended September 30, 2025, were issued and vested under the 2013 Plan. The weighted average remaining term for stock options outstanding as of September 30, 2025, is approximately 7.0 years.

As of September 30, 2025, the Company did not have any non-vested stock options.

Restricted Stock Units

RSUs are granted with vesting conditions determined by the Compensation Committee of the Board. Vesting conditions may include criteria such as time-based, performance-based, and/or a total shareholder return market condition. RSUs are valued at the fair value of the award on the date of grant, which is typically based on the closing share price of the Company’s Common Stock on the date of grant or using an advanced option-pricing model, such as a lattice model.

The fair value of TSR-based awards granted in 2025 was estimated with a lattice model using a risk-free interest rate that reflects the annualized yield of a zero coupon United States Treasury security with a term equal to the expected term of the award, a dividend yield of zero based on no Company history nor future plans to issue dividends during the expected term of the awards, and an expected volatility that reflects an annualized standard deviation of normal logarithm of historical daily changes in our Common Stock value per share.

The final number of shares issued under performance-based RSUs is generally based on the Company’s prior year performance as determined by the Compensation Committee at each vesting date. The Company accounts for forfeitures upon occurrence and forfeited awards are available again for issuance under the 2013 Plan.

The following table summarizes RSU activity for the nine months ended September 30, 2025 and 2024:


		September 30,					September 30,
		2025					2024
				Weighted-					Weighted-
				Average					Average
		Number of		Grant Date			Number of		Grant Date
		RSUs		Fair Value			RSUs		Fair Value
Unvested RSUs at beginning of period		4,090,639		$	0.60		1,773,058		$	1.03
Granted		20,101,991			0.48		3,235,731			0.49
Forfeited/Expired		(142,139)			0.92		(6,784)			3.93
Vested		(1,826,582)			0.51		(884,817)			1.03
Unvested RSUs at end of period		22,223,909		$	0.49		4,117,188		$	0.60

As of September 30, 2025, the Company had $4.3 million of unrecognized compensation costs related to non-vested RSUs that will be recognized over a period of approximately 2.3 years.