During the three-month period ended March 31, 2026, the Company initiated actions to reduce general and administrative expenses to reflect a more focused cost structure following the recent strategic divestitures. This included a workforce reduction resulting in the recognition of severance and employee‑related costs, which primarily consist of cash severance payments, employer‑paid benefits during the severance period, and payroll‑related taxes. These costs were recognized in accordance with ASC 420, Exit or Disposal Cost Obligations. The Company incurred approximately $2.3 million in connection with the workforce reduction plan and the restructuring actions were substantially completed during the six-month period ended June 30, 2026.

The following table is a summary of the changes in the severance liability, included with accrued expenses on the consolidated balance sheets related to the workforce reduction: 

In addition, the Company announced a leadership transition in January 2026 in which our former Chief Executive Officer became Executive Chair of the Company’s Board of Directors. The Company and Dr. Cheryl Blanchard, our former Chief Executive Officer, entered into a Transitional Services and Separation Agreement (the “Transition Agreement”). Pursuant to the Transition Agreement, Dr. Blanchard stepped down from her role as the Company’s President and Chief Executive Officer, effective January 31, 2026. Dr. Blanchard will continue to serve on the Board of Directors through January 31, 2028. Pursuant to the Transition Agreement, Dr. Blanchard will be entitled to receive her base salary rate and related employee benefits for 18 months immediately at the time of transition, which will be paid over 24 months through January 31, 2028. Dr. Blanchard will also continue to serve on the Board of Directors through the Company’s 2028 annual stockholders meeting. Her equity awards granted under the Company’s 2017 Omnibus Incentive Plan and any other equity plan shall continue to vest throughout her service relationship, in accordance with the terms of the applicable award agreements and equity plans. 

With this change in Dr. Blanchard’s role, the Company determined that the unrecognized stock-based compensation associated with her equity awards at the time of transition should be expensed immediately during the three-month period ended March 31, 2026, based on the premise that Dr. Blanchard’s would be no longer providing substantive services after January 31, 2026, commensurate with the value of the equity awards. As a result, the Company recorded $3.3 million in stock-based compensation during the three-month period ended March 31, 2026.