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.

The Company did not sell any shares of common stock during the year ended December 31, 2025 under the A&R 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 under the A&R Sales Agreement.

The Company presently has one equity compensation plan, the 2019 Stock 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.

Stock Options

Following is a summary of stock option activity for the years ended December 31, 2025 and 2024:

During 2025, the Company granted newly hired employees options to purchase 0.1 million shares of common stock with an exercise price ranging from $1.06 to $1.55 per share, a term of 10 years, and a vesting period of 4 years. The options have an aggregated fair value of $0.1 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 3.76% to 4.46% (2) expected life of 6 years, (3) expected volatility range from 88.0% to 90.7%, and (4) zero expected dividends.

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.

On March 31, 2025, the Board of Directors approved of the cancellation of stock options to purchase an aggregate of 4.9 million shares of common stock held by certain current employees and directors that were initially granted under the Amended and Restated 2013 Stock Plan and the 2019 Amended and Restated Stock Plan. Such cancellations were subject to the consent of the applicable holders of the stock options, which the Company received. The cancellation of these stock options resulted in the recording of $8.8 million in stock option compensation expense for the year ended December 31, 2025. During the year ended December 31, 2024, the Company recorded stock option compensation expense of $4.6 million.

The fair values of all options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at December 31, 2025 was $0.1 million related to unvested options, which is expected to be expensed over a weighted average of 2.4 years.

Restricted Stock Units

Following is a summary of restricted stock unit (“RSUs”) activity for the years ended December 31, 2025 and 2024:

The RSUs vested on August 18, 2025. The fair value of the RSUs, $1.8 million, was determined based on the stock price on the date of the grants and was recognized over three years. During the years ended December 31, 2025 and 2024, the Company recorded compensation expense related to RSUs of $0.4 million and $0.6 million, respectively. 

Warrants

Following is a summary of warrant activities for the years ended December 31, 2025 and 2024:

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, 2025 and 2024, the Company recorded stock-based compensation expense related to warrants of $3 thousand and $5 thousand, respectively.