Stockholders' Equity |
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| Stockholders' Equity | 4. Stockholders’ Equity Authorized Capital Stock The Company’s authorized capital stock consists of an unlimited number of common shares, no par value per share. Warrants to Purchase Common Stock During the three and six months ended June 30, 2026, and 2025, there were no warrants exercised and no warrants were issued. Outstanding warrants have a weighted average life of 1.18 years on June 30, 2026. The following tables detail the Company’s warrant activity for the three and six months ended June 30, 2026:
Equity Incentive Plan The Company maintains the Fennec Pharmaceuticals Inc. 2020 Equity Incentive Plan, as amended (the “Plan”), which is administered by the Compensation Committee of the Board of Directors. The Plan provides for the issuance of stock options, restricted share units (“RSUs”), stock appreciation rights, restricted stock awards, unrestricted stock awards, cash-based awards, dividend equivalent rights and stock purchase rights to employees, directors, officers and consultants of the Company. The Compensation Committee is responsible for determining eligible participants and approving individual award grants under the Plan. On April 24, 2025, the Company’s Board of Directors approved an amendment to the Plan to: (i) increase the number of common shares available for issuance under the Plan (excluding common shares issued prior to the date of the meeting pursuant to the exercise of options and vesting of RSUs) to 8,500 common shares; and (ii) include provisions for an employee stock purchase program. This amendment was approved by the Company’s shareholders on June 3, 2025. On April 27, 2026, the Company’s Board of Directors approved a further amendment to the Plan to increase the maximum number of common shares reserved and available for issuance under the Plan, together with the Prior Plan, to 10,000 common shares, excluding for this purpose any shares issued under the Plan or the Company’s prior stock option plan prior to June 10, 2026. This amendment was approved by the Company’s shareholders at the Company’s Annual General Meeting of Shareholders held on June 10, 2026. Prior to the June 2026 amendment, the maximum number of equity instruments issuable under the Plan, together with the Company’s prior stock option plan, was limited to 8,500 common shares, excluding common shares issued prior to June 3, 2025 pursuant to the exercise of options and vesting of RSUs. Prior to the June 2025 amendment, the maximum number of equity instruments issuable under the Plan, together with the Company’s prior stock option plan, was limited to 25% of the Company’s issued and outstanding common shares, which based on the then-current outstanding share count equated to a maximum of 6,825 common shares available for issuance. All stock options granted under the Plan have an exercise price equal to the fair value of the Company’s common shares on the date of grant. Options generally vest over a period of up to three years and are exercisable for a period of up to ten years from the grant date. Awards under the Plan may be denominated in either U.S. or Canadian dollars. The Company recognizes stock-based compensation expense for all share-based awards granted to employees and non-employees based on the fair value of the awards on the grant date. The following table summarizes stock-based compensation expense related to equity awards:
Stock Option Activity The following is a summary of option activity for the three and six months ended June 30, 2026.
Of the 7,039 options granted and outstanding at June 30, 2026, 4,567 are fully vested and exercisable. The fair value of equity awards valued using the Black-Scholes option pricing model, including stock options awards, was estimated using the assumptions in the table below. Expected volatility was determined based on the historical volatility of the Company’s common stock over a period consistent with the expected term of the applicable award.
Performance-Based Units In May and August 2025, the Board of Directors approved grants of performance-based restricted share units (“PSUs”) that vest based on the achievement of specified revenue performance milestones for 2025, and the related compensation cost was fully recognized in 2025. During the six months ended June 30, 2026, no additional PSUs were granted, and certain PSUs vested and were released in accordance with the original terms of the awards. Restricted Share Units Activity The Plan allows for the issuance of restricted share units (“RSUs”). The following is a summary of RSU activity for the three and six months ended June 30, 2026. During the three and six months ended June 30, 2026, there were 287 and 405 RSUs released from restriction, respectively. Standard vesting of RSUs is over three years with vesting on the first anniversary date of the grant and then on the last day of each subsequent month. The Compensation Committee may also award RSUs with alternative vesting.
The value of RSUs issued was estimated using the share price on the date of the award multiplied by the number of common shares granted. Employee Stock Purchase Plan The Company maintains an employee stock purchase plan under the Fennec Pharmaceuticals Inc. 2020 Equity Incentive Plan that allows eligible employees to purchase common shares at a discount through after-tax payroll deductions during recurring six-month offering periods. The purchase price is generally 85% of the lower of the fair market value of the Company’s common shares on the first or last trading day of the applicable offering period, subject to statutory limits. The ESPP is accounted for as a compensatory plan under ASC 718, and the grant-date fair value of purchase rights is estimated using the Black-Scholes option pricing model. ESPP-related stock-based compensation expense for the three and six months ended June 30, 2026 was $64 and $64, respectively, reflecting expense only for the second quarter of 2026, when the ESPP became effective. Under the ESPP, eligible employees of the Company and its participating subsidiaries may purchase common shares through after-tax payroll deductions at a discounted price. Substantially all employees of the Company and its U.S. subsidiaries are eligible to participate, except employees who own 5% or more of the Company’s voting stock and employees who may be excluded under the plan’s terms in accordance with Section 423 of the Internal Revenue Code (e.g., based on service requirements, customary hours worked, or highly-compensated status). |
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