Note 12 - Stock-based Compensation Stock

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 12. Stock-Based Compensation Stock

2015 Equity Plan

The 2015 Equity Plan provides for increases to the number of shares reserved for issuance thereunder each January 1 equal to 4.0% of the total shares of the Company’s common stock outstanding as of the immediately preceding December 31, unless a lesser amount is stipulated by the Compensation Committee of the Company’s Board. As of December 31, 2024, there were 23,843 shares available for future issuance under the 2015 Equity Plan. On January 1, 2025, the number of shares available for future issuance under the 2015 Equity Plan increased by 348,109.

2018 Employee, Director and Consultant Equity Incentive Plan

On March 28, 2018, EIP adopted the 2018 Plan, which was assumed by the Company pursuant to and in accordance with the terms of the Merger Agreement. Under the 2018 Plan, the Company may issue incentive stock options, non-qualified stock options, stock grants, and other stock-based awards to employees, directors, and consultants, as specified in the 2018 Plan and subject to applicable SEC and Nasdaq rules and regulations. The Board has the authority to determine to whom options or stock will be granted, the number of shares, the term, and the exercise price. Options granted under the 2018 Plan have a term of up to ten years and generally vest over a four-year period with 25% of the options vesting after one-year of service and the remainder vesting monthly thereafter. As of December 31, 2024, there were no shares available for issuance.

2024 Inducement Grants

During the year ended December 31, 2024, the Company granted stock options outside of the 2015 Equity Plan and the 2018 Plan to purchase an aggregate of 71,712 shares of common stock as material inducements to the employment of five new employees, in each case, in accordance with Nasdaq Listing Rule 5635(c)(4). Each such inducement option has a term of ten years and vests over a 36-month period commencing on the last day of the month in which the grant date occurred (subject to the employee's continued employment with the Company).

The Company recorded stock-based compensation expense in the following expense categories of its consolidated statements of operations and comprehensive loss:

	Year Ended December 31,
	2024		2023
Research and development	$	218,822	$	143,685
General and administrative		1,186,900		263,947
Total stock-based compensation expense	$	1,405,722	$	407,632

The following table summarizes the activity related to all stock option grants for the year ended December 31, 2024:

	Number of Options			Weighted average exercise price per share		Weighted average remaining contractual life (in years)		Aggregate intrinsic value
Balance at January 1, 2024		349,374		$	51.15		8.1	$	358,340
Granted		310,996		$	11.79
Expired		(23,568	)	$	395.10
Outstanding at December 31, 2024		636,802		$	19.38		7.6		—
Exercisable at December 31, 2024		316,560		$	28.62		6.5		—

The Black-Scholes option pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions: 

	Year Ended December 31,
	2024					2023
Expected term (in years)		5.25	-	5.76				5.75
Risk-free interest rate		3.89	-	4.46	%		3.9	-	4.5	%
Expected volatility		76.06	-	80.03	%		81.7	-	83.3	%
Dividend yield			—					—

At December 31, 2024, there was $2.0 million of unrecognized compensation expense that will be recognized over a weighted-average period of 2.1 years.

During the year ended December 31, 2024, the Company granted 39,721 options in lieu of 2023 executive bonus compensation.

Effective May 31, 2024, the employment of the Company's former Chief Financial Officer was terminated. Based on the terms of his severance agreement, unvested shares under previously granted option awards will continue to vest on the schedule provided for in the applicable option award agreement through September 30, 2025. The Company accounted for the change in vesting terms as an improbable-to-probable modification of his stock options and recognized $0.3 million of expense in relation to this modification during the year ended December 31, 2024. In addition, the exercise period for any shares under previously granted option awards vested as of May 31, 2024 was extended to September 30, 2025. The Company accounted for the change in exercise terms as a probable-to-probable modification of his stock options and recognized $12,000 of expense in relation to this modification during the year ended December 31, 2024.