9. Stock-Based Compensation

2023 Equity Incentive Plan

On September 12, 2023, the Company adopted the 2023 Equity Incentive Plan (the “2023 Plan”). The 2023 Plan reserved the right for the Compensation Committee or the Board of Directors acting as the Compensation Committee, as the administrator of the plan (the “Administrator”), to issue up to 2,051 equity awards, including stock options (“Options”), restricted stock awards (“Restricted Stock”), dividend equivalents awards, stock payment awards, restricted stock units (“RSUs”) and/or stock appreciation rights (“SARs,” together with Options, Restricted Stock and RSUs, “Awards”), according to its discretion. On July 9, 2025, the Company’s stockholders approved an amendment to the 2023 Plan to increase the aggregate number of shares of common stock authorized for grant under the 2023 Plan from 2,051 to 17,676, and on June 12, 2026, the Company’s stockholders approved an amendment to the 2023 Plan to increase the aggregate number of shares of common stock authorized for grant under the 2023 Plan from 17,676 to 121,875. Awards may be granted under the 2023 Plan to the Company’s employees, directors, and consultants. As of June 30, 2026, the Administrator has issued RSUs and stock options under the 2023 Plan.

Under the 2023 Plan, Awards may vest and thereby become exercisable or have restrictions on forfeiture lapse on the date of grant or in periodic installments or upon the attainment of performance goals, or upon the occurrence of specified events depending on the Administrator’s discretion. The Administrator has broad authority to determine the terms and conditions of any Award granted pursuant to the 2023 Plan.

No Awards may be granted under the 2023 Plan with a term of more than ten years and no Awards granted may be exercised after the expiration of ten years from the date of grant.

Inducement Grants

On April 22, 2025, the Company granted Eric Poma, the Company’s Chief Executive Officer, an inducement grant for the purchase of 3,783 shares of Common Stock with an exercise price of $90.08 per share, which was the closing price of the Company’s Common Stock on April 22, 2025 (the “Poma Grant”).

On July 6, 2026, the Company granted Sandra Gurrola, the Company’s Vice President of Finance and Controller, an inducement grant for the purchase of 6,250 shares of Common Stock with an exercise price of $2.40 per share, which was the closing price of the Company’s Common Stock on July 6, 2026 (the “Gurrola Grant,” and collectively with the Poma Grant, the “Inducement Grants”).

The Inducement Grants vest over four years with twenty-five percent of the stock options vesting on the one-year anniversary of the date of grant, and the remaining stock options vesting in 36 substantially equal monthly installments thereafter, subject to continued employment with the Company. The Inducement Grants were granted as an inducement material to both Dr. Poma and Ms. Gurrola entering into employment with the Company in accordance with Section 711 of NYSE American LLC Company Guide.

2023 Employee Stock Purchase Plan (“ESPP”)

On August 28, 2023, the Company approved the 2023 Employee Stock Purchase Plan (the “2023 ESPP”). Under the 2023 ESPP, eligible employees may purchase a limited number of shares of common stock at a discount of up to 15% of the market value of such stock at pre-determined and plan-defined dates. There have been no issuances of common stock under the 2023 ESPP to date.

Stock Options

Options granted under the 2023 Plan may be either “incentive stock options” within the meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended (the “Code”), or “non-qualified” stock options that do not qualify incentive stock options. Incentive stock options may be granted only to the Company’s employees and employees of domestic subsidiaries, as applicable. The exercise price of stock options shall be equal to or greater than the fair market value of common stock on the date the option is granted. In the case of an optionee who, at the time of grant, owns more than 10% of the combined voting power of all classes of stock, the exercise price of any incentive stock option must be at least 110% of the fair market value of the common stock on the grant date, and the term of the option may be no longer than five years. The aggregate fair market value of common stock (determined as of the grant date of the option) with respect to which incentive stock options become exercisable for the first time by an optionee in any calendar year may not exceed $0.1 million, otherwise it will be classified as a non-qualified stock option.

The exercise price of an option may be payable in cash or in common stock, or in a combination of cash and common stock, or other legal consideration for the issuance of stock as the Board or Administrator may approve.

Generally, options vest over four years and will be exercisable only while the optionee remains an employee, director or consultant, or during the three months thereafter, but in the case of the termination of an optionee’s services due to death or disability, the period for exercising a vested option shall be extended to the earlier of twelve months after termination or the expiration date of the option.

Employee Benefit Plans Securities Registration Statement

On October 1, 2024, the Company filed a Registration Statement on Form S-8, which includes a Reoffer Prospectus which may be used for reoffers and resales of shares of the Company. The Reoffer Prospectus covers the shares issuable to the holders pursuant to awards granted by the Company under the 2023 Plan. The Company will not receive any proceeds from the sale of the shares offered by the Reoffer Prospectus.

Option Awards Activity

A summary of the 2023 Plan option activity and related information follows (in thousands, except weighted average numbers):

 Summary of Stock Option Activity 

The Company recorded stock-based compensation expense in the following categories on the accompanying unaudited condensed consolidated statements of operations for the periods presented (in thousands):

 Schedule of Stock-Based Compensation Expense 

On January 18, 2023, the Board approved a repricing of approximately 0.2 million stock options previously granted at an exercise price of $17,798.40 per share to the then current fair value of $13,651.20 per share pursuant to an updated valuation report. The three and six months ended June 30, 2026 include an insignificant noncash compensation charge in connection with this repricing. The three and six months ended June 30, 2025 includes a noncash compensation charge of approximately $16,000 and $33,000, in connection with this repricing. The stock option repricing and the acceleration of vesting were accounted for as a modification.

As of June 30, 2026, the total unamortized stock-based compensation expense related to stock options was approximately $0.4 million, expected to be amortized over an estimated weighted average life of 2.4 years. The weighted-average estimated fair value of stock options with service-conditions granted during the three months ended June 30, 2026 and 2025 was $1.87 and $67.68 per share, respectively, and during the six months ended June 30, 2026 and 2025 was $1.87 and $68.00, respectively, using the Black-Scholes model with the following weighted-average assumptions:

 Schedule of Stock Options Valuation Assumptions 

The Company does not recognize deferred income taxes for incentive stock option compensation expense and records a tax deduction only when a disqualified disposition has occurred.