by our shareholders on May 9, 2023. The Equity Incentive Plans provide for the grant of stock options, restricted share unit awards and performance share unit awards to our employees, consultants and directors. Upon the effective date of the 2026 Plan described below, we ceased granting awards under the Equity Incentive Plans, but any awards granted under the Equity Incentive Plans will remain subject to the terms of the applicable plans.

The 2026 Incentive Award Plan (the “2026 Plan”) was approved by our shareholders at a Special Meeting of Shareholders held on January 15, 2026 and became effective on March 31, 2026. The 2026 Plan provides for the grant of options, including incentive stock options and nonqualified stock options, restricted stock, dividend equivalents, restricted stock units (“RSUs”), performance shares, other incentive awards, stock appreciation rights and cash awards, to our employees, consultants and directors.

The number of shares reserved for issuance under the 2026 Plan equals the sum of (i) 6,500,000 shares; (ii) any shares that remain available under the prior Equity Incentive Plans; (iii) any shares that are subject to awards under the prior Equity Incentive Plans which are forfeited or lapse unexercised and which are not issued under the prior Equity Incentive Plans; and (iv) an annual increase on the first day of each calendar year beginning January 1, 2027 and ending on and including January 1, 2036, equal to the lesser of (A) 6% of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares as is determined by the Board or the compensation committee.

We have granted inducement equity awards to certain of our key executives. These awards included stock options subject to a service condition, performance-based stock options (collectively, the “Inducement Stock Options”), and performance-based restricted share award units (“Inducement Share Awards”). The grants were made as a material inducement to employment in accordance with Nasdaq Listing Rule 5635(c)(4), and therefore did not require shareholder approval.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Stock-based compensation expense:
Pursuant to Equity Incentive Plans and Inducement Equity Awards	$	1,788	$	362	$	4,087	$	1,207
Pursuant to consulting service agreements	657		—		1,387		—
	$	2,445	$	362	$	5,474	$	1,207
Stock-based compensation expense in operating expenses:
Research and development	$	1,245	$	144	$	3,223	$	763
General and administrative	1,200		218		2,251		444
	$	2,445	$	362	$	5,474	$	1,207


	Stock options subject only to a service condition
	Number Outstanding	Weighted- Average Exercise Price (i)		Aggregate Intrinsic Value		Weighted- Average Remaining Contractual Life (in years)
Outstanding at December 31, 2025	17,216,957	$	1.11	$	1,576	3.8
Granted (ii)	4,761,000	$	1.04
Forfeited	(561,417)	$	1.02
Expired	(1,219,166)	$	2.40
Outstanding at June 30, 2026 (iii)	20,197,374	$	1.02	1,956		4.8
Vested and exercisable at June 30, 2026	5,329,017	$	1.20	$	753	2.4

i.The weighted-average exercise prices reflect the conversion of Canadian dollar denominated stock options translated into U.S. dollars using the applicable foreign exchange rate as of the date of grant. ii.Includes 800,000 Inducement Stock Options. iii.Includes 4,400,000 Inducement Stock Options.


	Stock options subject to a performance condition
	Number Outstanding	Weighted- Average Exercise Price (i)		Aggregate Intrinsic Value		Weighted- Average Remaining Contractual Life (in years)
Outstanding at December 31, 2025	1,900,000	$	0.42	$	868	4.4
Outstanding at June 30, 2026 (ii)	1,900,000	$	0.42	$	1,012	4.0
Vested and exercisable at June 30, 2026	—	$	—	$	—	—

i.The weighted-average exercise prices reflect the conversion of Canadian dollar denominated stock options translated into U.S. dollars using the applicable foreign exchange rate as of the date of grant. ii.Includes 1,900,000 Inducement Stock Options.

Our stock option activity for the six months ended June 30, 2025 was as follows:


	Stock options subject only to a service condition
	Number Outstanding	Weighted- Average Exercise Price (i)		Aggregate Intrinsic Value		Weighted- Average Remaining Contractual Life (in years)
Outstanding at December 31, 2024	6,876,345	$	1.61	$	205	2.8
Granted (ii)	3,600,000	$	0.47
Forfeited	(211,733)	$	1.00
Expired	(80,263)	$	2.71
Outstanding at June 30, 2025	10,184,349	$	1.21	$	1,075	3.3
Vested and exercisable at June 30, 2025	5,116,947	$	1.78	$	—	1.9

i.The weighted-average exercise prices reflect the conversion of Canadian dollar denominated stock options translated into U.S. dollars using the applicable foreign exchange rate as of the date of grant. ii.Includes 3,600,000 Inducement Stock Options.


	Stock options subject to a performance condition
	Number Outstanding	Weighted- Average Exercise Price (i)		Aggregate Intrinsic Value		Weighted- Average Remaining Contractual Life (in years)
Outstanding at December 31, 2024	—	$	—	$	—	—
Granted (ii)	1,900,000	$	0.42
Outstanding at June 30, 2025 (ii)	1,900,000	$	0.42	$	670	4.9
Vested and exercisable at June 30, 2025	—	$	—	$	—	—

i.The weighted-average exercise prices reflect the conversion of Canadian dollar denominated stock options translated into U.S. dollars using the applicable foreign exchange rate as of the date of grant. ii.Includes 1,900,000 Inducement Stock Options.

As of June 30, 2026, unrecognized compensation expense related to unvested stock options was $6,387, including $95 of compensation cost related to unvested stock options with a performance condition. These costs are expected to be recognized over a remaining weighted-average period of 1.7 years.

Stock option grants subject only to a service condition typically vest either immediately or annually over periods ranging from one to 3 years. The performance-based Inducement Stock Options will vest in full upon us generating a minimum of $25,000 in cumulative proceeds from new financing transactions after June 11, 2025.

We use the Black-Scholes Model to estimate fair value. We use historical data to estimate the expected dividend yield and expected volatility of our stock in determining the fair value of the stock options. The risk-free interest rate is based on the U.S. Treasury rate applicable to the expected life of the award. The expected dividend yield is zero, as we do not expect to pay dividends for the foreseeable future.

The fair value of options granted during the six months ended June 30, 2026 was determined using the following weighted-average assumptions:


Risk-free interest rate	4.2 %
Expected life (years)	6.7
Expected volatility	89.3		%
Expected dividend yield	— %
Weighted-average grant date fair value	$	0.82

As discussed in note 3, certain employee stock options previously classified as equity were reclassified as liabilities, effective January 1, 2026. The related stock option liability is measured at fair value on a recurring basis and is classified within Level 3 of the fair value hierarchy.

The fair value of the liability-classified options as of June 30, 2026 and January 1, 2026 was determined using the following weighted-average assumptions:


	June 30, 2026			January 1, 2026
Risk-free interest rate	4.1		%	3.6		%
Expected life (years)	3.5			3.9
Expected volatility	83.4		%	77.4		%
Expected dividend yield	—		%	—		%
Weighted-average fair value	$	0.64		$	0.57
Number of liability-classified stock options outstanding	7,336,535			7,671,135

A summary of the stock option liability for the six months ended June 30, 2026 was as follows:


	Stock option liability
Balance at December 31, 2025	$	—
Reclassification of liability from equity	1,189
Stock-based compensation expense	2,270
Fair value adjustment to liability	(66)
Balance at June 30, 2026	$	3,393


	Number of RSUs	Weighted- Average Grant Date Fair Value (i)		Intrinsic Value
Outstanding at December 31, 2025	497,842	$	0.95	$	435
Vested and released	(10,317)	$	1.09	9
Forfeited	(17,533)	$	1.11
Outstanding at June 30, 2026	469,992	$	0.89	$	446

i.The weighted-average grant date fair value prices reflect the conversion of Canadian dollar denominated RSUs translated into U.S. dollars using the applicable foreign exchange rate as of the date of grant.


	Number of RSUs	Weighted- Average Grant Date Fair Value (i)		Intrinsic Value
Outstanding at December 31, 2024	1,118,510	$	1.00	$	1,018
Granted	738,420	$	0.67
Vested and released	(1,256,646)	$	0.83	$	918
Outstanding at June 30, 2025	600,284	$	1.03	$	462

i.The weighted-average grant date fair value prices reflect the conversion of Canadian dollar denominated RSUs translated into U.S. dollars using the applicable foreign exchange rate as of the date of grant.

As of June 30, 2026, unrecognized compensation expense related to non-vested RSUs was $84. These costs are expected to be recognized over a remaining weighted-average period of 0.8 year.