Share-based Compensation |
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Share-based Compensation |
The 2019 Plan provides for the granting of incentive stock options, nonqualified stock options, restricted stock, stock appreciation rights (“SARs”), restricted stock units, performance awards, dividend equivalent rights and other awards, which may be granted singly, in combination, or in tandem, and which may be paid in cash, shares of common stock of the Company or a combination of cash and shares of common stock of the Company. The Company initially reserved a total of shares of the Company’s common stock for awards under the 2019 Plan. Effective as of May 26, 2020 and May 3, 2021, respectively, the Board approved an increase of the number of authorized shares of common stock reserved under the 2019 Plan from shares of common stock to and from shares of common stock to shares of common stock, all of which may be delivered pursuant to incentive stock options.
On December 31, 2024, the Board approved an additional 780,000 shares of common stock to be reserved under the 2019 Plan, such that total of number of shares underlying the Plan is of which shares have already been awarded or exercised. The Company’s stockholders approved this 780,000 increase at the Company’s 2025 Annual Meeting of Stockholders held on June 17, 2025. Subject to adjustments pursuant to the 2019 Plan, the maximum number of shares of common stock with respect to which stock options or SARs may be granted to an executive officer during any calendar year is shares of common stock.
Incentive stock options
On January 2, 2025, the Company granted options to purchase up to shares of the Company’s common stock at a per share exercise price of $ to Adam Levy for his service as our Chief Executive Officer pursuant to the terms of his Executive Employment Agreement dated December 31, 2024, all of which vests over a period of four years beginning December 31, 2025.
On January 2, 2025, the Company granted options to purchase up to shares of the Company’s common stock at a per share exercise price of $ to Joe McGuire for his service as our Chief Financial Officer pursuant to the terms of his Executive Employment Agreement dated December 31, 2024, which % vest beginning September 1, 2025 and the remainder over a period of three years.
Non-incentive stock options
On June 25, 2025, the Company granted to each of its four non-employee Board members options to purchase up to for their services as Board members until the Company’s 2026 Annual Meeting of Stockholders. The options vest in equal share amounts over the continuous twelve months beginning on July 31, 2025. shares of the Company’s common stock at a per share exercise price of $
As of June 30, 2025, vested outstanding stock options had $ thousand intrinsic value as the exercise price is greater than the estimated fair value of the underlying common stock, respectively. As of June 30, 2025, there was approximately $ thousand of total unrecognized share-based compensation related to unvested stock options, which the Company expects to recognize over the next 3 months excluding options fully contingent upon certain sales-based milestones being achieved within to months of commercial release.
The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period.
The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Accordingly, the Company has elected to use the “simplified method” to estimate the expected term of its share-based awards. The simplified method computes the expected term as the sum of the award’s vesting term plus the original contractual term divided by two.
The Company estimated the expected volatility input for the Black-Scholes model using the historical volatility of its own publicly traded common stock over a period commensurate with the expected term of the option.
Restricted stock awards
Effective as of June 25, 2025, the Company granted restricted stock awards of until the Company’s 2026 Annual Meeting of Stockholders. . Under ASC 718, Compensation—Stock Compensation (“ASC 718”), the Company has measured the value of the aggregated shares granted based on the closing price of the Company’s stock at the grant date of the RSU Grant ($ per share). shares of the Company’s common stock to two Board members for the services as Chairperson of the Board and Chairperson of the Audit Committee, respectively,
Effective as of January 2, 2025, the Company granted an aggregated restricted stock award of shares of the Company’s common stock to Adam Levy for his service as our Chief Executive Officer pursuant to the terms of his Executive Employment Agreement dated December 31, 2024. The shares vest monthly from January 2, 2025 through December 31, 2025. Under ASC 718, the Company has measured the value of the shares granted based on the closing price of the Company’s stock at the grant date of the RSU Grant ($ per share).
Effective as of January 1, 2025, the Company granted fully vested restricted stock awards of shares of the Company’s common stock to two Board members. Under ASC 718, the Company has measured the value of the aggregated shares granted based on the closing price of the Company’s stock at the grant date of the RSU Grant ($ per share).
Effective as of January 2, 2025, the Company granted an aggregated restricted stock award of fully vested shares of the Company’s common stock to Joseph McGuire for reimbursed expenses in the prior year. Under ASC 718, the Company has measured the value of the 4,082 shares granted based on the closing price of the Company’s stock at the grant date of the RSU Grant ($ per share).
Effective as of January 1, 2024, the Company granted an aggregated restricted stock award of shares of the Company’s common stock to Adam Levy for his service as our Chief Executive Officer pursuant to the terms of his Executive Employment Agreement dated December 31, 2023. The shares vest monthly from April 1, 2024 through December 31, 2024. Under ASC 718, the Company has measured the value of the shares granted based on the closing price of the Company’s stock at the grant date of the RSU Grant ($ per share).
Compensation expense will be recognized ratably over the total vesting schedule. The Company will periodically adjust the cumulative compensation expense for forfeited awards. The Company recognizes the reversal of any previously recognized compensation expense on forfeited awards in the period the awards are forfeited. Share-based compensation of $ thousand and $ thousand has been recorded for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, there was $ thousand unrecognized share-based compensation related to unvested RSUs, which the Company expects to recognize through December 2025.
Warrants
The following table shows a summary of common stock warrants through June 30, 2025:
As of June 30, 2025 and 2024, vested outstanding warrants had no intrinsic value as the exercise price is greater than the estimated fair value of the underlying common stock.
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