STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2025

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

2023 Equity Incentive Plan:

The Company maintains the 2023 Equity Incentive Plan (the "2023 Plan") and previously maintained the 2019 Equity Incentive Plan (the “2019 Plan”) and 2018 Omnibus Incentive Plan (the "2018 Plan"). Following stockholder approval in December 2023, any shares then available for future grant under the 2019 Plan and 2018 Plan were allocated to the 2023 Plan and no further grants could be made under the 2018 Plan and the 2019 Plan. In December 2024, stockholders approved a proposal to amend the 2023 Plan to increase shares available for grant under the 2023 Plan by 1,520,000 shares. As of June 30, 2025, 102,453 shares remained issuable under the 2023 Plan.

2024 Inducement Plan:

On February 28, 2024, the Board approved the Company's 2024 Inducement Plan (the "Inducement Plan"). Pursuant to the Inducement Plan and Nasdaq Listing Rule 5635(c)(4), the Company is permitted to grant equity awards as an inducement material to an individual's entering into employment with the Company, subject to certain conditions ("Inducement Grants"). In November 2024, the Board reduced the number of shares available to be issued under the Inducement Plan to one share. In May 2025, 100,000 shares were returned to the Inducement Plan as a result of forfeited equity awards. As of June 30, 2025, there were 100,001 shares available for future Inducement Grants, which includes shares underlying Inducement Grants that were forfeited.

2019 Employee Share Purchase Plan:

The Company has adopted an Employee Share Purchase Plan ("ESPP") pursuant to which qualified employees (as defined in the ESPP) may elect to purchase designated shares of the Company’s common stock at a price equal to 85% of the lesser of the fair market value of the common stock at the beginning or end of each semi-annual share purchase period (“Purchase Period”). Employees are permitted to purchase the number of shares purchasable with up to 15% of the earnings paid (as such term is defined in the ESPP) to each of the participating employees during the Purchase Period, subject to certain limitations under Section 423 of the U.S. Internal Revenue Code.

As of June 30, 2025, 70,926 shares remained available for grant under the ESPP.

For the six months ended June 30, 2025 and 2024, 16,196 and 5,285 shares were purchased by employees pursuant to the ESPP, respectively.

Options granted to employees and directors:

For the six months ended June 30, 2025, the Company granted options to employees and directors as follows:

	Six Months Ended June 30, 2025
	Award amount in shares	Exercise price range	Vesting period	Expiration
Options	1,582,500	$1.80 - $2.77	4 years	10 years

During the six months ended June 30, 2025, the fair value of options granted to employees and directors was $3.6 million.

The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility is based on a combination of historical volatilities of companies in comparable stages as well as companies in the industry, by statistical analysis of daily share pricing model. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the options granted in dollar terms. The Company’s management uses the expected term of each option as its expected life. The expected term of the options granted represents the period of time that granted options are expected to remain outstanding and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the midpoint between the vesting date and the end of the contractual term. The Company used the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options.

The underlying data used for computing the fair value of the options are as follows:

	Six Months Ended June 30,
	2025
Exercise price	$1.80 - $2.77
Dividend yield	—	%
Expected volatility	101.91% - 104.79%
Risk-free interest rate	4.29% - 4.58%
Expected term	6 years

Stock-based compensation expenses:

The following table illustrates the effect of stock-based compensation on the line items on the unaudited condensed consolidated statements of operations and comprehensive loss:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2025		2024		2025		2024
Research and development	$	61	$	133	$	187	$	296
General and administrative	468		752		1,105		1,574
Total	$	529	$	885	$	1,292	$	1,870