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| COMMON STOCK | COMMON STOCK Stock Options
On April 1, 2026, the Company granted options to purchase 1.5 million shares of the Company’s common stock. The stock options were valued using the Black-Scholes option pricing model on the grant date. There were no options granted during the first quarter of fiscal 2026. There
The significant assumptions used by the Company to estimate the fair value of the option awards are summarized below:
1 Volatility is based of the Company's historical stock price over a period of the expected term of the options.
2 Dividend yield is set to 0.00% as the Company has not historically paid dividends.
3 Risk-free interest rate is based on the Treasury yield for the expected term of the options.
Stock-based Compensation Expense
The following table details the Company's stock-based compensation expense (in thousands):
Warrant
On June 1, 2026, as additional consideration for the Conversion, the Company issued to Dialectic a warrant (the “Conversion Warrant”) to purchase up to 105,911 shares of common stock at an exercise price of $5.1940 per share (the “Conversion Warrant Exercise Price”) (equal to the conversion price of the Convertible Note in effect following the reset period ending March 31, 2026), at any time until the fifth anniversary of the issuance of the Conversion Warrant. Upon exercise, the aggregate exercise price may be paid, at Dialectic’s election, in cash or on a net issuance basis, based upon the then current market price of the common stock at the time of exercise. The Conversion Warrant includes certain antidilution protections in favor of Dialectic, subject to certain limitations, including limitations that restrict Dialectic from beneficially owning more than 19.99% of the Company’s outstanding Common Stock and certain exclusions. Additionally, Dialectic may require the Company to repurchase the unexercised portion of the Conversion Warrant for an amount equal to $844,255, proportionately adjusted for the portion of the Conversion Warrant subject to repurchase, after the fourth anniversary of the issuance of the Conversion Warrant, or, prior to the fourth anniversary, upon a change of control of the Company or immediately prior to the occurrence of a voluntary dissolution, liquidation or winding up of the affairs of the Company.
Additionally, on June 1, 2026, the Company and Dialectic entered into a First Amendment to the Registration Rights Agreement dated as of September 23, 2025 (the “First Amendment”), pursuant to which, among other things, the Forbearance Warrant was amended to update its terms to be consistent with the Conversion Warrant, including the exercise price of $5.1940 per share.
Private Placement
On June 1, 2026, the Company entered into Securities Purchase Agreements with certain accredited investors, pursuant to which the Company, in a private placement (the “Private Placement”), agreed to issue and sell to the Investors an aggregate of 10,615,712 shares of the Company’s common stock, par value $0.01 per share, at a price
of $9.42 per share, for aggregate gross proceeds to the Company of $100.0 million. After deducting placement agent fees and other offering expenses payable by the Company, the Company received net proceeds of approximately $94.6 million. The Private Placement closed June 4, 2026.
Standby Equity Purchase Agreement
On January 25, 2025, we entered into the SEPA with YA in which pursuant to and subject to its terms, the Company has the right, but not the obligation, to sell up to $200.0 million of common stock at any time during the three-year period following the date of the SEPA. On January 27, 2025, the Company filed a registration statement on Form S-1 in connection with the SEPA. The Registration Statement on Form S-1 was declared effective February 11, 2025.
On June 4, 2026, in accordance with the terms of the SEPA, the Company provided a notice to YA regarding its termination of the SEPA, effective June 11, 2026. There were no amounts owed to YA under the SEPA at the time the termination notice was provided.
The Company did not make any sales on the SEPA during the first quarter of fiscal 2027. Comparatively, the Company had sales of 6.32 million shares for net proceeds of approximately $67 million in the first quarter of fiscal 2026.
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