Stock-based awards include stock options and RSUs under the Company’s Amended and Restated 2012 Equity Incentive Plan (“2012 Plan”), inducement awards, performance-based RSUs under an Incentive Award Performance-Based Restricted Stock Unit Agreement, the Company’s 2021 Inducement Equity Incentive Plan (“Inducement Plan”), and rights to purchase stock under the ESPP. The Company calculates the grant date fair value of all stock-based awards in determining the stock-based compensation expense.

Stock-based compensation expense for all stock-based awards consists of the following (in thousands):

	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Research and development	$	125	$	80	$	246	$	156
General and administrative	$	548	$	346	$	1,087	$	685
Total	$	673	$	426	$	1,333	$	841

The total unrecognized compensation cost related to unvested stock option grants as of September 30, 2022 was approximately $3.4 million and the weighted average period over which these grants are expected to vest is 2.3 years.

The total unrecognized compensation cost related to unvested RSUs (not including performance-based RSUs) as of September 30, 2022 was approximately $0.1 million, which will be recognized over a weighted average period of 2.38 years.

The Company uses either the Black-Scholes or Monte Carlo option-pricing models to calculate the fair value of stock options, depending on the complexity of the equity grants. Stock-based compensation expense is recognized over the vesting period using the straight-line method. The assumed dividend yield is based on the Company’s expectation of not paying dividends in the foreseeable future. The Company uses the Company-specific historical volatility rate as the indicator of expected volatility. The risk-free interest rate assumption is based on U.S. Treasury rates. The weighted average expected life of options was estimated using the average of the contractual term and the weighted average vesting term of the options. The measurement and classification of share-based payments to non-employees is consistent with the measurement and classification of share-based payments to employees. The fair value of stock options was estimated at the grant date using the following weighted average assumptions:

	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
Dividend yield		—			—			—			—
Volatility		95.93	%		116.83	%		95.41	%		116.83	%
Risk-free interest rate		3.30	%		0.73	%		3.18	%		0.73	%
Expected life of options	6.00 years			6.00 years			6.00 years			6.00 years
Weighted average grant date fair value	$	1.85		$	6.52		$	1.99		$	6.52

The fair value of each RSU and performance-based RSU is recognized as stock-based compensation expense over the vesting term of the award. The fair value is based on the closing stock price on the date of the grant.

The Company uses the Black-Scholes valuation model to calculate the fair value of shares issued pursuant to the ESPP. Stock-based compensation expense is recognized over the purchase period using the straight-line method. The fair value of ESPP shares was estimated at the purchase period commencement date using the following assumptions:

	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	September 30, 2022			September 30, 2021*			September 30, 2022			September 30, 2021*
Dividend yield		—			—			—			—
Volatility		86.58	%		0.00	%		86.58	%		0.00	%
Risk-free interest rate		3.34	%		0.00	%		3.34	%		0.00	%
Expected term	6 months				—		6 months				—
Grant date fair value	$	0.82		$	—		$	0.82		$	—

*There were no participants in the ESPP for the purchase periods beginning March 1, 2021 or September 1, 2021.

The assumed dividend yield is based on the Company’s expectation of not paying dividends in the foreseeable future. The Company uses the Company-specific historical volatility rate as the indicator of expected volatility. The risk-free interest rate assumption is based on U.S. Treasury rates. The expected life is the 6-month purchase period. There was one participant in the ESPP for the current purchase period (beginning September 1, 2022).

The Company is authorized to issue 25,000,000 shares of preferred stock. There are no shares of preferred stock currently outstanding, and the Company has no current plans to issue shares of preferred stock.

The Company previously had an effective shelf registration statement on Form S-3 (File No. 333-222929) and the related prospectus previously declared effective by the SEC on February 22, 2018 (the “2018 Shelf”), which registered $100.0 million of common stock, preferred stock, warrants and units, or any combination of the foregoing, that was set to expire on February 22, 2021. On January 19, 2021, the Company filed a shelf registration statement on Form S-3 (File No. 333-252224) to register $150.0 million of the Company’s common stock, preferred stock, debt securities, warrants and units, or any combination of the foregoing (the “2021 Shelf”) and a related prospectus. The 2021 Shelf was declared effective by the SEC on January 29, 2021 and replaced the 2018 Shelf at that time.

On March 16, 2018, the Company entered into a Sales Agreement (“Sales Agreement”) with H.C. Wainwright & Co., LLC and Jones Trading Institutional Services LLC (each an “Agent” and together, the “Agents”). On January 29, 2021, the Company filed a prospectus supplement to the 2021 Shelf (the “ATM Prospectus Supplement”), pursuant to which the Company may offer and sell, from time to time through the Agents, shares of its common stock in ATM sales transactions having an aggregate offering price of up to $50.0 million. Any shares offered and sold will be issued pursuant to the 2021 Shelf. During the three and six months ended September 30, 2022, the Company issued zero shares of common stock in ATM offerings under the ATM Prospectus Supplement. As of September 30, 2022, the Company has sold an aggregate of 1,580,862 shares of common stock in ATM offerings under the ATM Prospectus Supplement, with gross proceeds of approximately $21.7 million. As of September 30, 2022, there was approximately $100.0 million available for future offerings under the 2021 Shelf (excluding amounts available but not yet issued under the ATM Prospectus Supplement), and approximately $28.3 million available for future offerings through the Company’s ATM program under the ATM Prospectus Supplement.

In March 2021, the Company’s Board of Directors (“Board”) approved the Inducement Plan. The Inducement Plan authorized the issuance of up to 750,000 shares of common stock for awards of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance units, performance shares, and other stock or cash awards.

The following table summarizes the Company’s RSUs (not including performance-based RSUs) activity from March 31, 2022 through September 30, 2022:

	Number of Shares			Weighted Average Price
Unvested at March 31, 2022		15,500		$	10.58
Granted		—		$	—
Vested		(2,726	)	$	11.07
Cancelled / forfeited		—		$	—
Unvested at September 30, 2022		12,774		$	10.47

During the three and six months ended September 30, 2022 under the 2012 Plan, 126,262 and 199,921 stock options were granted at various exercise prices, respectively.

On October 7, 2021, the Company granted 30,000 and 7,500 stock options, respectively, to its Executive Chairman and its Chief Scientific Officer under the 2012 Plan. These stock options have unique vesting criteria based on specific Company performance conditions. The vesting criteria relates to the Company closing a seven-figure cash up front deal with a major pharmaceutical company. As of September 30, 2022, management estimated there was a 0% probability of achievement, and therefore no expense has been recorded to date.

The following table summarizes the Company’s stock option activity from March 31, 2022 to September 30, 2022:

	Options Outstanding		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at March 31, 2022		1,203,671	$	7.36	$	71,650
Options granted		199,921	$	2.56	$	—
Options cancelled / forfeited		—	$	—	$	—
Options exercised		—	$	—	$	—
Outstanding at September 30, 2022		1,403,592	$	6.68	$	1,503
Vested and Exercisable at September 30, 2022		339,232	$	7.57	$	—

The weighted average remaining contractual term of stock options exercisable and outstanding at September 30, 2022 was approximately 8.27 years.

In June 2016, the Board adopted, and in August 2016, the Company’s stockholders subsequently approved, the ESPP. The Company reserved 75,000 shares of common stock for issuance thereunder. The ESPP permits employees after five months of service to

purchase common stock through payroll deductions, limited to 15 percent of each employee’s compensation up to $25,000 per employee per year or 500 shares per employee per six-month purchase period. Shares under the ESPP are purchased at 85 percent of the fair market value at the lower of (i) the closing price on the first trading day of the six-month purchase period or (ii) the closing price on the last trading day of the six-month purchase period. The initial offering period commenced in September 2016. At September 30, 2022, there were 59,435 shares available for purchase under the ESPP.

Common stock reserved for future issuance consisted of the following at September 30, 2022:

Common stock issuable pursuant to options outstanding and reserved under the 2012 Plan			1,353,592
Common stock reserved under the 2012 Plan			510,412
Common stock reserved under the ESPP			59,435
Common stock reserved under the 2021 Inducement Equity Plan			700,000
Common stock issuable pursuant to restricted stock units outstanding under the 2012 Plan			12,774
Common stock issuable pursuant to options outstanding and reserved under the Inducement Plan			50,000
Total at September 30, 2022			2,686,213