The Company currently provides share-based compensation under two equity incentive plans approved by the Board of Directors and the stockholders:

Options granted prior to fiscal 2017 were made pursuant to plans that have expired or were terminated.

The Company’s stockholders approved the 2017 Incentive Plan in June 2017. The 2017 Incentive Plan allows the Board of Directors to grant up to 4,000,000 shares of common stock to directors, officers, employees and consultants in a combination of equity incentive forms including incentive stock options (ISOs), non-qualified stock options (NQSOs), stock appreciation rights (SARs) or restricted shares of common stock.

On May 31, 2024, the Company held its 2024 Annual Meeting of Stockholders (Annual Meeting). At the Annual Meeting, the Company’s stockholders approved the Company’s Third Amended and Restated 2020 Equity Incentive Plan (the Amended and Restated Plan) which, among other things, (a) increased the aggregate number of shares of Common Stock authorized for issuance under the Amended and Restated Plan by 4,870,092 for a total of 12,500,000 shares of Common Stock, and (b) adjusted the “evergreen” provision included therein, such that the number of shares of Common Stock available for the grant of awards under the Amended and Restated Plan will automatically increase on January 1 of each year in an amount equal to 5% of the number of shares of Common Stock issued and outstanding on December 31 of the immediately preceding year (subject to adjustment in the event of stock splits and other similar events); provided, however, that the Company’s Board of Directors may act prior to January 1 of a given year to provide that there will be no increase in the share limit for such year or provide that the increase for such year will be a lesser number of shares of Common Stock. Under the Amended and Restated Plan, the Board of Directors may grant to directors, officers, employees and consultants various forms of equity, including ISOs, NQSOs, SARS, and restricted awards. On August 14, 2024, the Company filed a Form S-8 to register 4,870,092 additional shares of Common Stock authorized for issuance under the Amended and Restated Plan as approved by stockholders at the Annual Meeting. On January 1, 2026 and January 1, 2025, the number of shares of Common Stock available for grant increased by 3,716,899 and 3,533,573, respectively, pursuant to the “evergreen” provision in the Amended and Restated Plan. The Company filed a Form S-8 to register the January 1, 2025 additional shares on March 26, 2025.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. The Company uses the Black-Scholes option valuation model because management believes the model is appropriate for the Company. However, management understands that because changes in the subjective input assumptions can materially affect the fair value estimate, this valuation model does not necessarily provide a reliable single measure of the fair value of its stock options. The weighted-average fair value is that of the grant dates of the awards. The risk-free interest rate is based on the U.S. Treasury security rate with an equivalent term in effect as of the date of grant. The expected term and expected volatility assumptions are based on historical data of the Company. The expected dividend yield of zero reflects that the Company has not paid cash dividends and does not intend to pay cash dividends in the foreseeable future.

The weighted-average fair value of stock option awards granted and the key assumptions used in the Black-Scholes valuation model to calculate the fair value are as follows:


	Year Ended December 31,								Year Ended December 31,
	2025								2024
Weighted-average fair value				$	2.81							$	9.11
Options issued					4,111,920								2,994,875
Exercise price	$	1.80		to		$	4.83		$	3.48		to		$	15.77
Expected term (in years)	5.3			to			6.1		5.5			to			7.0
Expected dividend yield		-					-			-					-
Risk-free rate		3.68	%	to			4.47	%		3.46	%	to			4.45	%
Expected volatility		102.04	%	to			107.34	%		97.37	%	to			106.12	%

The following table presents the share-based compensation expense recognized for all share-based compensation arrangements, excluding share-based compensation expense reported in Note 4, Discontinued Operations (in thousands):


	Year Ended December 31,
	2025		2024
Research and development expense	$	3,945	$	2,209
General and administrative expense		5,021		3,012
Total share-based compensation	$	8,966	$	5,221

The total value of the stock options awards is expensed ratably over the vesting period applicable to the options. As of December 31, 2025, total unrecognized compensation cost related to stock-based options and awards was approximately $21.3 million, and the weighted-average period over which it is expected to be recognized is approximately 2.65 years.

The summary of stock option activity for the year ended December 31, 2025 is as follows:


				Weighted-Average		Weighted-Average
	Number of			Exercise Price		Remaining Contractual		Aggregate Intrinsic
	Options			per Share		Term (years)		Value
Balance at December 31, 2024		7,352,501		$	6.07		7.84	$	3,818,602
Granted1		4,111,920			2.81
Exercised		(141,297	)		2.62
Expired		(67,760	)		7.61
Forfeited		(732,577	)		4.76
Balance at December 31, 2025		10,522,787		$	4.92		7.79	$	3,264,955

Exercisable at December 31, 2025		5,439,089		$	4.41		6.66	$	2,571,335

All options granted had exercise prices equal to the closing price of the Company’s common stock on the grant date. The options were granted to employees, consultants and members of the Board of Directors and have a term of 10 years and generally vest over a four-year period.


	Year Ended December 31,
	2025		2024
Total intrinsic value of options exercised	$	71,188	$	1,994,730

The Company’s current policy is to issue new shares to satisfy option exercises.