Note 7 - 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 were 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 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.

During the year ended December 31, 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. During the year ended December 31, 2023, the Company sold 1.9 million shares of common stock, resulting in gross proceeds of $15.1 million and net proceeds of $14.6 million.

The Company presently has one equity compensation plan, the 2019 Amended and Restated Stock Plan, (the “2019 Plan”). The 2019 Plan has an expiration date of October 18, 2029 and the number of shares of our common stock authorized under the plan for grant to employees, directors and consultants is 9,333,333 shares.

The Company had two equity compensation plans that expired on September 9, 2023; the Company’s Amended and Restated 2013 Stock Plan and the Company’s 2013 Equity Incentive Plan.

Stock Options

Following is a summary of stock option activity for the years ended December 31, 2024 and 2023:

During 2024, the Company granted newly hired employees options to purchase 0.2 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 $0.6 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 4.19% to 4.45% (2) expected life of 6 years, (3) expected volatility range from 80.5% to 90.5%, and (4) zero expected dividends.

During 2023, the Company granted its employees and members of the Board of Directors options to purchase 2.4 million shares of common stock with an exercise price ranging from $5.00 to $11.60 per share, a term of 10 years, and a vesting period from 4 to 4.2 years. The options have an aggregated fair value of $9.0 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 3.5% to 4.82% (2) expected life of 6 years, (3) expected volatility range from 79.0% to 81.6%, and (4) zero expected dividends.

During the years ended December 31, 2024 and 2023, options to purchase 0.5 million and 0.3 million common shares were cancelled, respectively, upon the termination of employment.

The fair values of all options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at December 31, 2024 was $9.1 million related to unvested options, which is expected to be expensed over a weighted average of 2.6 years. During 2024 and 2023, the Company recorded total option expense of $4.6 million and $3.2 million, respectively.

Restricted Stock Units

Following is a summary of restricted stock unit (“RSUs”) activity for the years ended December 31, 2024 and 2023:

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 prices on the dates of the grants and each RSU grant is being recognized over its respective three-year period. The unrecognized compensation expense at December 31, 2024 of $0.4 million is expected to be expensed over a weighted average of 0.6 years. During 2024 and 2023, the Company recorded compensation expense related to RSUs of $0.6 million and $0.6 million, respectively. 

Warrants

Following is a summary of warrant activities for the years ended December 31, 2024 and 2023:

On April 23, 2024, warrants to purchase an aggregate of 1.4 million shares of common stock expired. These warrants were issued on April 23, 2019, when the Company completed an underwritten offering of 1.4 million shares of common stock and warrants to purchase 1.4 million shares of common stock at a price of $11.55 per share and related warrant. The warrants were exercisable for a period of 5 years at an exercise price of $15.00 per share.

During the years ended December 31, 2024 and 2023, the Company recorded stock-based compensation expense related to warrants of $5 thousand and $6 thousand, respectively.