Note 8. Equity

Common Stock

The Company’s certificate of incorporation, as amended, authorizes the Company to issue up to 500,000,000 shares of $0.00001 par value common stock. Holders of common stock are entitled to one vote per share on all matters to be voted upon by the stockholders of the Company.

Subject to the preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors (the “Board”). No dividends have been declared to date.

On April 6, 2023, the Company entered into a sales agreement (“Sales Agreement”) with Cowen and Company, LLC as the Company’s agent (“Agent”), to issue and sell up to an aggregate gross sales of $100.0 million in shares (“Shares”) of the Company’s common stock through an “at-the-market” equity offering program (“ATM Offering”). The Company will pay commissions to the Agent of up to 3.0% of the gross proceeds of the sale of the Shares sold under the Sales Agreement and reimburse the Agent for certain expenses. During the year ended December 31, 2023, the Company issued and sold 2,502,000 shares of common stock under the ATM Offering, resulting in net proceeds of $19.1 million, after deducting commissions and other offering costs. The Company did not sell any shares of common stock through the ATM Offering during the three months ended March 31, 2026. The Company terminated the Sales Agreement with the Agent in April 2026.

On April 9, 2026, the Company entered into an open market sale agreement (the “2026 Sales Agreement”) with Jefferies LLC (“Jefferies”), as sales agent, pursuant to which the Company may offer and sell from time to time up to an aggregate of $80.0 million in shares of the Company’s common stock through an ATM Offering Program. Sales of shares of the Company’s common stock under the 2026 Sales Agreement will be made pursuant to a Registration Statement on Form S-3 as supplemented by a prospectus supplement. The Company has agreed to pay Jefferies a commission of up to 3.0% of the gross proceeds from the sale of shares of the Company’s common stock sold under the 2026 Sales Agreement.

Preferred Stock

The Company’s certificate of incorporation, as amended, authorizes the Company to issue up to 10,000,000 shares of $0.00001 par value preferred stock. The preferred stock is not convertible. No shares of preferred stock were issued and outstanding as of March 31, 2026 and December 31, 2025.

Shareholder Rights Plan

On August 15, 2024, the Company entered into a Rights Agreement between the Company and Equiniti Trust Company, LLC as Rights Agent (as amended from time to time, the “Rights Agreement”), which was previously approved by the Board. In connection with the Rights Agreement, a dividend was declared of one preferred stock purchase right (individually, a “Right” and collectively, the “Rights”) for each share of the common stock, par value $0.00001 per share, of the Company outstanding at the close of business on August 29, 2024 (the “Record Date”). Each Right entitles the registered holder thereof, after the Rights become exercisable and until August 15, 2025 (or the earlier redemption, exchange or termination of the Rights), to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.00001 per share, (the “Series A Preferred”), of the Company at a price of $6.50 per one one-thousandth of a share of Series A Preferred, subject to adjustment. The Rights are not exercisable until the Distribution Date (as defined in the Rights Agreement”) and the Rights will expire on August 15, 2025, subject to the Company’s right to extend such date, unless earlier redeemed or exchanged by the Company or terminated. Additional information regarding the Rights Agreement is contained in a Current Report on Form 8-K filed with the SEC on August 19, 2024. The adoption of the Shareholder Rights Plan had no impact on the financial position of the Company. The Shareholder Rights Plan expired on August 15, 2025.

Common Stock and Pre-Funded Warrants Transactions

2026 Private Placement

In March 2026, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”) to raise approximately $40.0 million. The Purchase Agreement provided for the sale and issuance by the Company of an aggregate of: (i) 8,245,611 shares (the “Shares”) of the Company’s common stock and (ii) pre-funded warrants to purchase up to an aggregate of 5,789,493 shares of common stock (collectively, the "2026 Private Placement”). The price per Share was $2.85, and the price per 2026 Pre-Funded Warrant was $2.84999. The closing of the 2026 Private Placement occurred on March 10, 2026 (the “Closing”).

The Company valued the 2026 Pre-Funded Warrants at issuance, concluding their sales price approximated their fair value, and allocated net proceeds from the sale proportionately to the common stock and the 2026 Pre-Funded Warrants. Net proceeds allocated to the common stock and the 2026 Pre-Funded Warrants were $21.9 million and $15.4 million, respectively, net of placement agent fees and other offering costs, and recorded as a component of additional paid-in-capital.

In connection with the 2026 Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Purchasers at the Closing. Pursuant to the Registration Rights Agreement, among other things, the Company filed a registration statement (the “Registration Statement”) and a prospectus supplement with the SEC on April 9, 2026 to register the resale of the Shares and the shares of common stock issuable upon exercise of the 2026 Pre-Funded Warrants. The SEC declared the Registration Statement effective on April 20, 2026.

2025 Exchange Agreements

In June 2025, the Company entered into exchange agreements (the “2025 Exchange Agreements”) with existing stockholders pursuant to which the stockholders exchanged an aggregate of 2,952,000 shares of the Company’s common stock for the 2025 Pre-Funded Warrants to purchase up to an equivalent number of shares of common stock. The exchange of 152,000 of shares of the Company's common stock settled in July 2025.

The exchange transactions were completed pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended, and no cash consideration was received by the Company. As there was no cash consideration and the exchange involved equity instruments, the transactions were accounted for as an equity-for-equity exchange with no gain or loss recognized. The Company valued the 2025 Pre-Funded Warrants at issuance, concluding that the closing stock price on the transaction close dates approximated their fair value.

Pre-Funded Warrants

The 2025 Pre-Funded Warrants and the 2026 Pre-Funded Warrants (collectively, the “Pre-Funded Warrants”) have an exercise price of $0.00001 per share and do not have an expiration date. The Pre-Funded Warrants include a beneficial ownership limitation that restricts the holders from exercising any portion of the Pre-Funded Warrant to the extent that, following such exercise, the holder would own more than 9.99% of the Company’s outstanding common stock. The ownership limitation may be increased by the holders to up to 19.99% upon 61 days’ prior written notice to the Company.

The Pre-Funded Warrants meet the criteria for equity classification under ASC 815-40, because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, and (v) are indexed to the Company’s common stock. Accordingly, the Pre-Funded Warrants were recorded in additional paid-in capital within stockholders’ equity.

As of March 31, 2026, all of the Pre-Funded Warrants remain unexercised.