Equity Incentive Plan

6 Months Ended

Jun. 30, 2026

Equity [Abstract]

Equity Incentive Plan

5. Equity Incentive Plan

Under its 2021 Omnibus Equity Incentive Plan as amended (“2021 Plan”), the Company may grant options to purchase shares of Common Stock, restricted stock awards, performance stock awards, incentive bonus awards, other cash-based awards or directly issue shares of Common Stock to our employees, directors, and consultants. The five percent evergreen provision resulted in an additional 133,005 and 12,588 shares of Common Stock issuable pursuant to the 2021 Plan as of January 1, 2026, and 2025, respectively. In addition, on May 27, 2026, the Company’s shareholders approved an amendment to the Company’s 2021 Plan to increase the number of shares available for issuance thereunder to 402,214 shares. As of June 30, 2026, there remained 252,712 shares reserved for issuance under the 2021 Plan, as amended.

Stock awards may be granted at an exercise price per share of not less than 100% of the fair market value at the date of grant. Stock awards granted are exercisable over a maximum term of 10 years from the date of grant and generally vest over a period of four years for employees and one year for directors of the Company’s Board and consultants.

On March 9, 2026, the Company appointed a new Vice President of Marketing to help launch the Company’s Tome skincare line. Upon commencement of employment, the new employee was provided a non-qualified stock option inducement grant to purchase up to 15,000 shares of the Company’s Common Stock with an exercise price of $1.33 per share based upon the Company’s Nasdaq closing stock price on that day (the “Inducement Award”). The Inducement Award was made outside of the Company’s 2021 Plan, was made in accordance with Nasdaq Listing Rule 5635(c)(4), and was unanimously approved by the Company’s Board of Directors. The terms and conditions of the Inducement Award are substantially the same as those awards granted under the Company’s 2021 Plan, including a four-year vesting period.

Fair Value Measurement

The Company uses the Black-Scholes option valuation model, which requires the use of highly subjective assumptions, to determine the fair value of stock-based awards. The fair value of each employee stock option is estimated on the grant date under the fair value method using the Black-Scholes model. The estimated fair value of each stock option is then expensed over the requisite service period, which is generally the vesting period. The assumptions and estimates that the Company uses in the Black-Scholes model are as follows:

	●	Fair Value of Common Stock. The fair value of Common Stock is measured as the Company’s closing price of Common Stock on the date of grant.

	●	Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes valuation model on the implied yield available on U.S. Treasury zero-coupon issues with a term equivalent to that of the expected term of the options.

	●	Expected Term. The expected term represents the period that the Company’s stock-based awards are expected to be outstanding, which is calculated using the simplified method for stock-based awards granted to employees, as the Company has insufficient historical information to provide a basis for an estimate. The simplified method calculates the expected term as the average of the vesting term plus the contractual life of the options. As permitted under ASC 718, the Company has elected to use the contractual term as the expected term for certain non-employee awards, on an award-by-award basis.

	●	Volatility. Beginning on January 1, 2026, based on the availability of sufficient historical trading data of the Company’s own common stock, the Company determines the expected stock volatility based on its historical volatility. Prior to January 1, 2026, the Company lacked sufficient historical trading history and, as such, determined volatility based on the historical volatilities of industry peers that consisted of several public companies with comparable characteristics, including therapeutic indications.

	●	Dividend Yield. The expected dividend assumption is based on the Company’s current expectations about its anticipated dividend policy. To date, the Company has not declared any dividends to common shareholders and, therefore, the Company has used an expected dividend yield of zero.

The Company granted stock options during the first quarter of 2026 and 2025. There were no stock option grants during the second quarter of 2026 or 2025. The following table presents the weighted-average assumptions used for stock options granted during the following periods:

		2026				2025
		Six Months Ended June 30,
		2026				2025
Grant date fair value		$	1.91			$	11.59
Risk-free interest rate			3.8	%			4.7	%
Dividend yield			0.00	%			0.00	%
Expected life in years			6.0				5.9
Expected volatility			135	%			110	%

Stock-based Compensation Expense

In general, stock-based compensation is allocated to research and development expense or selling, general and administrative expense according to the classification of cash compensation paid to the employee, director, or consultant to whom the stock award was granted. The following table summarizes the total stock-based compensation expense included in the Company’s statements of operations:

		2026				2025				2026				2025
		Three Months Ended June 30,								Six Months Ended June 30,
		2026				2025				2026				2025
Research and development		$	3,991			$	8,100			$	18,303			$	15,720
Selling, general and administrative			37,789				31,134				66,755				60,702
Total		$	41,780			$	39,234			$	85,058			$	76,422

Stock Option Award Activity

A summary of the Company’s stock option activity (inclusive of the Inducement Award) is as follows:

Schedule of Stock Option Activity

		Number of Options Outstanding				Weighted- Average Exercise Price				Weighted- Average Remaining Contractual Term (in Years)
Balance at December 31, 2025			20,477			$	25.27				8.9
Options granted			147,000				2.09				-
Options exercised			-				-				-
Options forfeited			(3,066	)			6.00				-
Balance at June 30, 2026			164,411			$	4.91				9.4

Options exercisable at June 30, 2026			17,666			$	18.73				8.7

The aggregate intrinsic value of options outstanding and exercisable as of June 30, 2026, is calculated as the difference between the exercise price of the underlying options and the closing market price of the Company’s Common Stock on June 30, 2026, which was $1.29 per share. The intrinsic value of options outstanding and exercisable as of June 30, 2026, was zero.

As of June 30, 2026, total unrecognized compensation cost related to stock options was approximately $0.4 million and the weighted average period over which this cost is expected to be recognized is 2.8 years.