Share-based Compensation

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

In April 2021, the Company adopted the 2021 Long-Term Performance Incentive Plan (“2021 Incentive Plan”). Under the 2021 Incentive Plan, the Company can grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and stock grants. On its initial effective date, the 2021 Incentive Plan allowed for the issuance of up to 1,266,092 shares of common stock (the “Share Limit”). The Share Limit automatically increases on January 1st of each year, during the term of the 2021 Incentive Plan, commencing on January 1 of the year following the year in which the effective date occurs, in an amount equal to four percent (4%) of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year; provided that the board of directors may determine that there will be no such increase or a smaller increase for any particular year. As of September 30, 2025, 1,322,222 shares remained available for future grants.

In addition, from time to time, the Company makes inducement grants of stock options to new hires, which awards are made pursuant to the Nasdaq’s inducement grant exception to the shareholder approval requirement for grants of equity

compensation. During the nine months ended September 30, 2025, the Company granted inducement stock options covering 359,000 shares of the Company’s common stock to new employees.

Share-based awards generally vest over a period of one year to four years, and share-based awards that lapse or are forfeited are available to be granted again. The contractual life of all share-based awards is ten years. The expiration dates of the outstanding share-based awards range from January 2028 to June 2035.

The Company measures share-based awards at their grant-date fair value and records compensation expense on a straight-line basis over the service period of the awards. Share-based compensation is allocated to employees and consultants based on their respective departments. All board of directors’ compensation is charged to general and administrative expense.

Share-based compensation expense related to the issuance of stock options was as follows for the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Research and development	$	29,271	$	25,811	$	204,940	$	21,765
General and administrative	293,810		187,191		800,972		588,281
	$	323,081	$	213,002	$	1,005,912	$	610,046

The weighted average assumptions used in the Black-Scholes option pricing model to determine the fair value of share-based awards granted during the nine months ended September 30, 2025 and 2024 were as follows:


	2025	2024
Expected stock price volatility	111.99%	95.52%
Risk-free interest rate	4.30%	4.13%
Expected term (in years)	5.94	6.00
Expected dividend yield	—	—

The following table summarizes the share-based award activity for the periods presented:


	Number of Shares	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at January 1, 2025	3,273,615	$	1.97	8.2	$	176,045
Granted	3,254,660	$	0.77
Forfeited	(689,775)	$	1.73
Outstanding at September 30, 2025	5,838,500	$	1.33	8.4	$	712,194
Vested and exercisable at September 30, 2025	2,009,009	$	2.26	7.0	$	68,103
Vested and expected to vest at September 30, 2025	5,838,500	$	1.33	8.4	$	712,194

The aggregate intrinsic value in the above table is calculated as the difference between the fair market value of the Company’s common stock price and the exercise price of the stock options. The weighted average fair value of share-based awards granted during the nine months ended September 30, 2025 and 2024 was $0.65 and $1.19, respectively. As of September 30, 2025, the unrecognized compensation cost related to outstanding share-based awards was $2.3 million and is expected to be recognized as expense over a weighted-average period of approximately 2.65 years.