2020 Equity Incentive Plan

The Company’s 2020 Plan was established for granting stock incentive awards to directors, officers, employees and consultants to the Company. On June 7, 2024, the stockholders of the Company approved an amendment to the 2020 Plan, pursuant to which the number of shares of Common Stock reserved and available for issuance under the 2020 Plan increased by 2,500,000 shares. On January 3, 2025, the stockholders of the Company approved an amendment to the 2020 Plan, pursuant to which the number of shares of Common Stock reserved and available for issuance under the 2020 Plan increased by 27,453,993 shares. Subject to certain adjustments, the maximum number of shares of common stock that may be issued under the 2020 Plan after the stockholder's approval on January 3, 2025 in connection with awards is limited to 31,417,517 shares.

Restricted Stock

In connection with the acquisition of CorHepta in February 2025 (see Note 10), the Company issued a combined 1,660,222 shares of restricted common stock to two selling shareholders who were subsequently employed by the Company, which are subject to a combination of post-acquisition service- and performance-based vesting conditions, as follows: (i) 996,133 shares shall vest on the first anniversary of the closing of the acquisition, (ii) 166,023 shares shall vest upon the achievement of a certain milestone specified in the Merger Agreement, and (iii) 498,066 shares shall vest on the first anniversary of the closing of the acquisition, provided that the performance milestone has been achieved by such date, and in all cases, provided that both employees have been continuously providing services to the Company during the one year period following the acquisition date.

For the restricted shares with service-based vesting conditions, stock-based compensation expense is recognized on a straight-line basis over the service period, which is generally the vesting term. For restricted shares with performance-based vesting conditions, stock-based compensation expense is recognized over the requisite service period when it is probable that the performance condition will be achieved.

The weighted-average grant date fair value of the restricted shares issued in connection with the asset acquisition was $4.9 million. During the three months ended March 31, 2025, the Company recognized stock-based compensation expense of $0.3 million related to the restricted shares with service-based vesting conditions. No stock-based compensation expense was recognized related to the restricted shares with performance-based vesting conditions during the three months ended March 31, 2025, as it was not considered probable that the performance conditions would be achieved. As of March 31, 2025, there was $4.6 million of unrecognized compensation expense related to the restricted shares issued in connection with the acquisition of CorHepta.

Stock Options

During the three months ended March 31, 2025, the Company granted 21,329,195 options with a weighted average strike price of $2.52 to purchase common stock to certain employees that either (i) vest annually in three equal parts over three years, (ii) vest on the first anniversary of the grant of such option in the amount of one-third of such grant, and the remaining portion will vest in 36 equal monthly installments thereafter, (iii) vest in 48 equal monthly installments, (iv) vest annually over two years, or (v) vest annually over four years. The Company also granted 2,056,049 performance-based options with a weighted average strike price of $2.35 to purchase common stock to certain employees. These options are subject to performance vesting and will vest and become exercisable once the performance conditions are probable of being met. There is no assurance that the performance conditions will be met and therefore some or all of these options may never vest or become exercisable. The total aggregate grant date fair value of all options granted was $43,113,397. During the three months ended March 31, 2025, certain performance conditions were met.

During the three months ended March 31, 2024, the Company granted 18,039 options with a weighted average strike price of $2.55 to purchase common stock to certain employees that will vest annually in three equal parts over three years. The total aggregate grant date fair value of all options granted was $34,494. On January 3, 2025, the above options were repriced to $1.26 with the incremental fair value of the reprice being de minimis.

For awards with performance conditions in which the award does not vest unless the performance condition is met, the Company recognizes expense if, and to the extent that, the Company estimates that achievement of the performance condition is probable. If the Company concludes that vesting is probable, the Company recognizes expense from the date the Company reaches this conclusion through the estimated vesting date.

Stock-Based Compensation Expense