Note 5 - Equity 

In August 2020, the Company entered into the Capital on Demand™ Sales Agreement with JonesTrading Institutional Services LLC, “JonesTrading”, pursuant to which the Company may sell, from time to time, through or to JonesTrading, up to an aggregate of $200 million of its common stock. On June 28, 2022, the Company entered into an Amended and Restated Capital on Demand™ Sales Agreement (the “A&R Sales Agreement”) with JonesTrading and B. Riley Securities, Inc. (“B. Riley”). The A&R Sales Agreement modifies the original Capital on Demand™ Sales Agreement to include B. Riley Securities as an additional sales agent thereunder. Shares of common stock are offered pursuant to a shelf registration statement on Form S-3 (File No. 333-242322) filed with the SEC on August 7, 2020 (the “Prior Shelf Registration Statement”). On August 11, 2023, the Company filed a new registration statement on Form S-3 (File No. 333-273911), which registration statement was amended on February 2, 2024, and declared effective on February 5, 2024, to replace the Prior Shelf Registration Statement, including a base prospectus which covers the offering, issuance and sale of up to $500 million of common stock, preferred stock, warrants, units and/or subscription rights; and a sales agreement prospectus covering the offering, issuance and sale of up to a maximum aggregate offering price of $200 million of common stock that may be issued and sold under the Amended Sales Agreement.

For the nine months ended September 30, 2024, the Company sold 3.5 million shares of common stock, resulting in gross proceeds of $29.9 million and net proceeds of $29.3 million. For the nine months ended September 30, 2023, the Company sold 1.7 million shares of common stock, resulting in gross proceeds of $13.8 million and net proceeds of $13.4 million.

Stock Options

The following is a summary of stock option activity for the nine months ended September 30, 2024:

During the nine months ended September 30, 2024, the Company granted new employees options to purchase 0.1 million shares of common stock with an exercise price ranging from $7.20 to $8.15 per share, a term of 10 years, and a vesting period of 4 years. The options have an aggregated fair value of $0.5 million that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate range from 4.11% to 4.5% (2) expected life of 6 years, (3) expected volatility range from 80.5% to 81.5%, and (4) zero expected dividends.

During the nine months ended September 30, 2024, options to purchase 323 thousand common shares were cancelled upon the termination of employment and 10 thousand options were exercised for shares of common stock.

The fair values of all options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at September 30, 2024 was $10.1 million related to unvested options, which is expected to be expensed over a weighted average of 3.0 years. During the nine months ended September 30, 2024 and 2023, the Company recorded compensation expense related to stock options of $3.6 million and $2.4 million, respectively.

Restricted Stock Units

The following is a summary of restricted stock unit (“RSU”) activity for the nine months ended September 30, 2024:

The RSUs vest at the earliest of a change of control event, the termination of the recipient’s continuous service status for any reason other than by the Company for cause and the third anniversary of the date of the grant. The fair value of the RSUs, $1.8 million, was determined based on the stock price on the dates of the grant and is being recognized over three years. The unrecognized compensation expense at September 30, 2024 of $0.5 million is expected to be expensed over 0.9 years. During the nine months ended September 30, 2024 and 2023, the Company recorded compensation expense related to RSUs of $0.4 million in each reporting period.

Warrants

Following is a summary of warrant activity for the nine months ended September 30, 2024: