Share-based Compensation

9 Months Ended

Sep. 30, 2025

Share-based Compensation

Share-based Compensation

Note 8. Share-based Compensation

2019 Incentive Award Plan

The following table summarizes stock option activity under the 2019 Award Plan:

		Weighted
		Average
	Number of	Exercise
	Shares	Price
Outstanding, January 1, 2025	47,955	$	720.00
Options granted	—		—
Options forfeited	—		—
Outstanding, September 30, 2025	47,955	$	720.00
Exercisable, September 30, 2025	44,595	$	720.00

As of September 30, 2025 and December 31, 2024, the weighted average remaining contractual life of options outstanding and options exercisable was 5.3 years and 6.0 years, respectively.

During the three and nine months ended September 30, 2025 and 2024, the Company recognized $0.3 million and $1.3 million, $0.7 million and $2.3 million, respectively, of share-based compensation expense related to stock options granted.

As of September 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested stock options was $0.5 million and $1.8 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 1 month and 4 months, respectively.

The following table summarizes restricted stock units activity under the 2019 Award Plan:

		Weighted
		Average
	Number of	Grant Date
	Shares	Fair Value
Outstanding, January 1, 2025	11,398	$	780.48
Granted	—		—
Vested	(1,639)		—
Forfeited	—		—
Outstanding, September 30, 2025	9,759	$	780.48

During three and nine months ended September 30, 2025 and 2024, the Company recognized $0.3 million, $1.0 million, $0.3 million and $1.1 million, respectively, of share-based compensation expense related to restricted stock units granted, excluding restricted stock units with earnout vesting criteria. For the restricted stock units with earnout vesting criteria, the Company recognized $0.1 million and $0.5 million for the three and nine months ended September 30, 2024. As of September 30, 2025, the Company determined that the earnout vesting criteria was no longer probable, as such, the Company reversed $1.0 million of share-based compensation expense related to the restricted stock units with earnout criteria during the three and nine months ended September 30, 2025.

As of September 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested restricted stock units was $2.0 million and $3.0 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 14 months and 21 months, respectively. The unrecognized compensation expense with the earnout criteria as of September 30, 2025 and December 31, 2024 of $5.1 million and $4.3 million, respectively, will be recognized when the milestones are determined to be probable over the RSUs vesting term, calculated as the period from the date the milestone was determined to be probable and the expected achievement date of the milestone.

2023 Incentive Award Plan

As of September 30, 2025 there were 40,398 shares of common stock available for issuance under the Company’s 2023 Incentive Award Plan (the “2023 Award Plan”). The following table summarizes stock options activity under the 2023 Award Plan:

		Weighted
		Average
	Number of	Exercise
	Shares	Price
Outstanding, January 1, 2025	51,016	$	242.14
Options granted	—		—
Options forfeited	—		—
Outstanding, September 30, 2025	51,016	$	242.14
Exercisable, September 30, 2025	32,426	$	—

The weighted average remaining contractual life of options outstanding and options exercisable as of September 30, 2025 and December 31, 2024 was 8.7 years and 9.5 years, respectively.

During the three and nine months ended September 30, 2025 and 2024, the Company recognized $0.6 million, $1.9 million, $0.5 million and $1.0 million respectively, of share-based compensation expense related to stock options granted. As of September 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested stock options was $3.4 million and $5.3 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 10 months and 19 months, respectively.

The following table summarizes restricted stock units activity under the 2023 Award Plan:

		Weighted
		Average
	Number of	Grant Date
	Shares	Fair Value
Outstanding, January 1, 2025	14,215	$	60.05
Granted	—		—
Vested	—		—
Forfeited	—		—
Outstanding, September 30, 2025	14,215	$	60.05

During the three and nine months ended September 30, 2025, the Company recognized $0.1 million and $0.3 million, and de minimus stock-based compensation expenses for the three and nine months ended September 30, 2024.

As of September 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested restricted stock units was $0.4 million and $0.7 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 11 and 20 months, respectively.

In May 2025, under the 2023 Award Plan, the Board approved cash-settled restricted stock units, which are share-based awards granted to employees and directors over a vesting period that entitle the grantee to receive the cash equivalent to the value of a share of the Company’s common stock upon each vesting anniversary.

During the three and nine months ended September 30, 2025, there were 5,288,059 cash-settled restricted stock units granted with weighted-average grant date fair value of $0.81 with one, three, and four-year vesting, subject to continued service through the applicable vesting date. There were no units vested as of September 30, 2025.

The Company has elected to account for cash-settled restricted stock units in accordance with ASC 718. The Company will recognize compensation expense on the condensed consolidated statement of operations and record the associated liability to accrued compensation on the condensed consolidated balance sheets using straight-line method over the service period. Additionally, changes in fair value of the awards will be recorded to operating costs on the condensed consolidated statement of operations at each reporting date until settlement, reflecting changes in the underlying stock price.

During the three and nine months ended September 30, 2025, the Company recognized $0.6 million and $0.7 million of share-based compensation expense related to cash-settled restricted stock units granted. As of September 30, 2025, total unrecognized compensation expense related to nonvested cash-settled restricted stock units was $3.6 million, which is expected to be recognized over the weighted-average remaining requisite service period of 34 months. As of September 30, 2025, the liability related to cash-settled restricted stock units was $0.7 million in accrued compensation on the condensed consolidated balance sheet.

2025 Employee Inducement Incentive Award Plan

Effective April 19, 2025, the Board adopted the 2025 Employment Inducement Incentive Award Plan (the “Inducement Plan”) and, subject to the adjustment provisions of the Inducement Plan, reserved 1,000,000 shares of the Company’s Class A common stock for issuance pursuant to equity awards granted under the Inducement Plan. The Inducement Plan provides for the grant of equity-based awards, including non-statutory stock options, restricted stock units, restricted stock, stock appreciation rights, performance shares and performance stock units, and its terms are substantially similar to the 2023 Award Plan. In accordance with the NYSE American Company Guide, awards under the Inducement Plan may only be made to individuals not previously employees or non-employee directors of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company or being rehired following a bona fide period of interruption of employment by the Company. The Inducement Plan was adopted without stockholder approval pursuant to the applicable provisions of the NYSE American Company Guide. As of September 30, 2025, there were 660,983 shares of common stock available for issuance under the Inducement Plan.

For the nine months ended September 30, 2025 there were 59,034 stock options issued, with weighted average exercise price of $0.41. The weighted average fair value of options granted as of September 30, 2025 was $0.37. The weighted average remaining contractual life of options outstanding and options exercisable as of September 30, 2025 was 9.6 years. During the three and nine months ended September 30, 2025, the Company recognized de minimus amounts of share-based compensation expense related to stock options granted. As of September 30, 2025, total unrecognized compensation expense related to nonvested stock options was $20 thousand, which is expected to be recognized over the weighted-average remaining requisite service period of 43 months.

For the nine months ended September 30, 2025, there were 279,983 restricted stock units issued, with weighted averaged grant date fair value of $0.49. During the three and nine months ended September 30, 2025, the Company recognized de minimus amounts of share-based compensation expense related to restricted stock units granted. As of September 30, 2025, total unrecognized compensation expense related to nonvested restricted stock units was $0.1 million, which is expected to be recognized over the weighted-average remaining requisite service period of 43 months.

Share-based Compensation Expense and Valuation Information

The Company accounts for the measurement and recognition of compensation expense for all share-based awards based on the estimated fair value of the awards. The fair value of share-based awards is amortized on a straight-line basis over the requisite service period. The Company records share-based compensation expense net of actual forfeitures.

During the three and nine months ended September 30, 2025 and 2024, the Company recognized $1.0 million, $4.4 million $1.6 million and $4.9 million, respectively, of share-based compensation expense, of which $0.6 million, $3.3 million, $1.2 million, and $3.7 million, respectively, were in selling, general and administrative expenses, and $0.3 million and $1.1 million and $0.4 million and $1.3 million respectively, were in research and development expenses in the accompanying condensed consolidated statements of operations and comprehensive (loss) income.

The fair value of stock options granted under the Award Plan was estimated using the following assumptions:

	Nine Months Ended
	September 30,
	2025	2024
Expected volatility	123%	47% – 87%
Risk-free interest rate	3.9%	3.7% – 4.3%
Expected life (in years)	6.25	5.27 – 6.25
Expected dividend yield	—	—