Note 7 — Share-Based Payment Awards

In November 2018, the Company’s stockholders and board of directors approved the 2018 Plan which succeeded the 2017 Plan. The 2018 Plan was amended by the board of directors in December 2020. The Company has granted RSAs, stock options and RSUs for its common stock under the 2017 Plan and 2018 Plan as detailed in the tables below. There were 1,457,446 shares available for future issuance under the 2018 Plan as of June 30, 2026.

All stock options issued have been non-qualified stock options and the exercise price was the closing stock price of the Company's common stock on the date of grant. Non-qualified stock options typically have a ten-year life and non-qualified stock options that are expired, terminated, surrendered or canceled without having been fully exercised will be available for future awards under the 2018 Plan. In addition, the 2018 Plan provides that commencing January 1, 2019 through January 1, 2028, the share reserve will be increased by 4% of the total number of shares outstanding as of the preceding December 31, subject to a reduction at the discretion of the Company’s board of directors. On January 1, 2025, the share reserve was increased by 1,068,323 shares based on the 26,709,084 shares of common stock outstanding at December 31, 2024. On January 1, 2026, the share reserve was increased by 1,081,882 shares based on the 27,047,061 shares of common stock outstanding at December 31, 2025.The exercise price for stock options granted is not less than the fair value of common stock as of the date of grant. The Company uses the closing stock price on the date of grant as the exercise price.

For the six months ended June 30, 2026 and 2025, the Company’s total stock-based compensation expense was $2,986 and $3,296, respectively. Of these amounts, $2,887 and $3,214 were recorded in general and administrative (“G&A”) expenses during the six months ended June 30, 2026 and 2025, respectively, and $99 and $82 were recorded in research and development expenses during the six months ended June 30, 2026 and 2025, respectively.

Stock Options

The following table summarizes stock option activity during the six months ended June 30, 2026:

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock at June 30, 2026 for those stock options that had strike prices lower than the fair value of the Company’s common stock. 

The assumptions used to calculate the estimated fair value of options granted during the six months ended June 30, 2026 and 2025 under the BSM were as follows:

Expected Term — The Company has opted to use the “simplified method” for estimating the expected term of options granted to employees and directors, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). The expected term of options granted to non-employees equals the contractual life of the options.

Expected Volatility — Expected volatilities are based on the Company's historical volatility subsequent to our IPO, which the Company's believes represent the most accurate basis for estimating expected future volatility under the current conditions.

Risk-Free Interest Rate — The risk-free rate assumption is based on the U.S. Treasury instruments with maturities similar to the expected term of the Company’s stock options.

Expected Dividend — The Company has not issued any dividends in its history and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero.

Fair value of Common Stock —The Company uses the closing stock price on the date of grant for the fair value of the common stock.

Stock based compensation related to stock options was $1,864 and $1,756 for the six-month periods ended June 30, 2026 and 2025, respectively. As of June 30, 2026, there was a total of $7,983 of unrecognized compensation costs related to non-vested stock option awards, which will be recognized over a weighted average period of approximately 2.9 years. 

During the six months ended June 30, 2026, the Company issued 884,190 shares of its common stock resulting from stock option exercises at a weighted average exercise price of $4.68 per share with an intrinsic value of $21,254. During the six months ended June 30, 2025, the Company issued 108,451 shares of its stock resulting from stock option exercises at a weighted average exercise price of $3.63 per share with an intrinsic value of $1,167.

Restricted Stock Units (RSUs)

The following table summarizes restricted stock unit activity during the six months ended June 30, 2026:

Stock-based compensation expense related to RSUs was $1,002 and $1,582 for the six-month periods ended June 30, 2026 and 2025, respectively. As of June 30, 2026, there was $5,163 of unrecognized stock-based compensation expense related to unvested RSUs, which will be recognized over a weighted average period of approximately 3.1 years.

Employee Stock Purchase Plan

The ESPP provides for an initial reserve of 150,000 shares, and this reserve is automatically increased on January 1 of each year by the lesser of 1% of the outstanding shares of common stock at December 31 of the preceding year or 150,000 shares of common stock, subject to reduction at the discretion of the Company’s board of directors. As of June 30, 2026, there were 954,655 shares available for issuance under the ESPP.

The annual offerings consist of two stock purchase periods, with the first purchase period ending in December and the second ending in June. The terms of the ESPP permit employees of the Company to use payroll deductions to purchase stock at a price per share that is at least the lesser of (1) 85% of the fair market value of a share of common stock on the first date of an offering or (2) 85% of the fair market value of a share of common stock on the date of purchase. After the offering period ends, subsequent twelve-month offering periods automatically commence over the term of the ESPP on the day that immediately follows the conclusion of the preceding offering, each consisting of two purchase periods approximately six months in duration. The terms of the ESPP provide a restart feature if the Company's stock price is lower at the end of a six-month period within the twelve-month offering period than it was at the beginning of the twelve-month offering period.

The Company recorded an expense of $120 and a credit to income of $42 related to the ESPP during the six-month periods ended June 30, 2026 and 2025, respectively. As of June 30, 2026 and December 31, 2025, the accompanying Condensed Balance Sheets include $53 and $45, respectively, in accrued liabilities for employee ESPP contributions.