Equity Incentive Plan

6 Months Ended

Jun. 30, 2025

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plan

Equity Incentive Plan

In 2009, the Company adopted its 2009 Equity Incentive Plan (the “Plan”) which provides for the grant of

stock options to the Company’s employees, members of the Board of Directors and consultants. Options

granted under the Plan may be either incentive stock options (“ISOs”) or nonqualified stock options

(“NSOs”). ISOs may be granted only to employees. NSOs, Stock Appreciation Rights, Restricted Stock,

and Restricted Stock Units may be granted to employees, members of the Board of Directors and

consultants. As of June 30, 2025, the Company reserved 10,885,987 shares for issuance under the Plan.

Options under the Plan have a term of ten years from the grant date. The option exercise price will be

determined by the Board of Directors, but will be no less than 100% of the fair market value per share on

the date of grant. In addition, in the case of an ISO granted to an employee who owns stock representing

more than 10% of the voting power of all classes of stock of the Company, the per share exercise price

will be no less than 110% of the fair market value per share on the date of grant. Through June 30, 2025

and December 31, 2024, options granted generally vest over (i) four years with 25% vesting on the first

anniversary of the issuance date and 1/48th per month thereafter or (ii) vesting monthly in equal

installments over four years.

Stock option activity under the Company’s 2009 Equity Incentive Plan is set forth below (in thousands,

except share and per share amounts):

	Shares Available for Grant	Number of Options	Awards Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Balance at December 31, 2024 ...	1,079,492	8,537,210	$4.72	7.96	$68,256
Authorized .......................................	1,000,000	—	$—
Options granted ..............................	(1,418,628)	485,719	$13.10
Options exercised ...........................	—	(267,396)	$5.35
Options canceled ............................	676,551	(231,578)	$4.99
Balance at June 30, 2025 .............	1,337,415	8,523,955	$5.17	7.68	$72,526
Vested and exercisable, June 30, 2025 ..............................................		3,583,827	$5.23	6.49	$30,427
Vested and expected to vest, June 30, 2025 ..............................		8,523,955	$5.17	7.68	$72,526

The weighted-average grant date fair value of options granted during the three and six months ended

June 30, 2025 was $7.78 and $7.40 per share, respectively.

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying

stock options and the fair value of the Company’s common stock for stock options that were in-the-money

at each reporting period. The aggregate intrinsic value of stock options exercised during the three and six

months ended June 30, 2025 was $1.0 million and $2.1 million, respectively.

Stock-Based Compensation

The Company estimated the fair value of stock options using the Black-Scholes option-pricing model

based on the following assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Expected life (in years) ........................	6.0	5.6	6.0	5.6
Expected volatility .................................	56.1%-56.6%	53.7%-53.8%	55.0%-56.6%	53.7%-53.8%
Risk-free interest rate ...........................	4.2%	4.4%	4.1%	4.4%
Dividend yield ........................................	–%	–%	n/a	–%

The significant assumptions used in these calculations are summarized as follows:

Fair value of common stock. Because there has been no public market for the Company’s common stock,

the fair value of common stock shares underlying stock options has historically been determined by the

Board of Directors at the time of option grant by considering independent valuation performed by third-

party valuation firm as well as a number of objective and subjective factors, including valuation of

comparable companies, sales of convertible preferred stock to unrelated third parties, operating and

financial performance, the lack of liquidity of capital stock and general and industry specific economic

outlook, among other factors. The fair value of common stock was determined in accordance with

applicable elements of the American Institute of Certified Public Accountants Practice Aid, Valuation of

Privately-Held-Company Equity Securities Issued as Compensation.

Expected term. The expected term of stock options represents the weighted-average period the stock

options are expected to remain outstanding. The Company does not have sufficient historical exercise

and post-vesting termination activity to provide accurate data for estimating the expected term of options

and has opted to use the “simplified method,” whereby the expected term equals the arithmetic average

of the vesting term and the original contractual term of the option.

Expected volatility. As the Company is not publicly traded, the expected volatility for the Company’s stock

options was determined by using an average of historical volatilities of selected industry peers deemed to

be comparable to the Company’s business corresponding to the expected term of the awards.

Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the

time of grant for zero-coupon U.S. Treasury notes with maturities corresponding to the expected term of

the awards.

Expected dividend yield. The expected dividend rate is zero as the Company currently has no history or

expectation of declaring dividends on its common stock.

The Company also issues stock options with vesting based upon completion of performance goals. The

fair value for these performance-based awards is recognized over the period during which the goals are

to be achieved. Stock-based compensation expense recognized at fair value includes the impact of

estimated probability that the goals would be achieved, which is assessed prior to the requisite service

period for the specific goals.

Total stock-based compensation expense is as follows (in thousands):

	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Cost of revenue ...............................................	$45	$78	$102	$160
Research and development ..........................	381	486	928	1,003
Selling, general and administrative ..............	1,827	2,076	3,715	4,200
Total stock-based compensation expense .	$2,253	$2,640	$4,745	$5,363

As of June 30, 2025, total unrecognized stock-based compensation costs related to unvested stock

options was $14.8 million, which is expected to be recognized over a remaining weighted-average period

of 2.49 years.