The Company’s Employee Stock Purchase Plan ("ESPP") and 2021 Incentive Award Plan (“2021 Plan”) were adopted by the Company’s Board of Directors on October 8, 2021. The ESPP and 2021 Plan were both adopted by the Company’s stockholders on October 19, 2021, and became effective on the date prior to the first date of the effectiveness of the registration statement on Form S-1 filed by the Company.

The ESPP initially provided participating employees with the opportunity to purchase up to an aggregate of 1,329,040 shares of the Company’s common stock at 85% of the market price at the lesser of the date the purchase right is granted or exercisable. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022, and ending on January 1, 2031, by the lesser of 1% of all classes of the Company’s common stock outstanding on the immediately preceding December 31, or such smaller number of shares as

determined by the Company’s Board or the committee. As of December 31, 2024, 3,468,996 shares remained available for issuance.

Eligible employees can contribute up to 15% of their gross base earnings for purchases under the ESPP through regular payroll deductions, limited to $25,000 worth of the Company’s shares of common stock for each calendar year in which the purchase right is outstanding. The Company currently holds offerings consisting of six-month periods commencing on January 1st and July 1st of each calendar year, with a single purchase date at the end of the purchase period on June 30th and December 31st of each calendar year.

During the years ended December 31, 2024, 2023 and 2022, the Company issued 118,067, 73,442 and 38,968 shares, respectively, upon exercise of purchase rights. The Company recognizes compensation expense on a straight-line basis over the service period. During the years ended December 31, 2024, 2023 and 2022, the Company recognized $470, $322 and $213 of compensation expense, respectively, related to the ESPP.

Below are the assumptions used for the years ended December 31, 2024, 2023 and 2022, in determining the fair value of shares under the ESPP:

The 2021 Plan authorized the Company to issue an initial aggregate maximum number of shares of common stock equal to (i) 7,641,979 shares plus (ii) a number of shares that are available for issuance under the 2011 Plan plus (iii) any shares that are subject to 2011 Plan that become available for issuance (via expiration, forfeitures, etc.) plus (iv) an increase commencing on January 1, 2022, and continuing annually on the anniversary thereof through January 1, 2031, equal to the lesser of (a) 5% of the shares of all classes of the Company’s common stock outstanding on the last day of the immediately preceding calendar year or (b) such smaller number of shares as determined by the Company’s Board or the committee. As of December 31, 2024, the Company had reserved 16,408,251 shares of common stock for future grant.

The following table summarizes the Company’s stock option plan and the activity for the year ended December 31, 2024:

During the years ended December 31, 2023 and 2022, there were 225,000 and 359,054 options granted at a weighted average strike price of $18.33 and $16.08, respectively. There were no options issued during 2024.

The Company received cash in the amount of $3,132, $2,406 and $5,271 from the exercise of stock options for the years ended December 31, 2024, 2023 and 2022, respectively. The tax benefit from equity options exercised were $747, $560 and $1,223 for the years ended December 31, 2024, 2023 and 2022, respectively.

The aggregate intrinsic value of options outstanding at December 31, 2024, is $12,274. The aggregate intrinsic value of vested and exercisable options at December 31, 2024 is $12,247. The aggregate intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022, is $2,069, $4,742 and $18,764, respectively.

As of December 31, 2024, there was approximately $1,944 total unrecognized compensation cost related to non-vested stock option compensation arrangements, which is expected to be recognized over a weighted average period of 0.60 years.

Below are the assumptions used for the years ended December 31, 2023 and 2022, in determining the fair value of each option award:


	Year Ended December 31,
	2023	2022
Expected volatility	66.20%	55% - 70%
Expected dividends	—	—
Expected term (in years)	6.25	6.00
Risk-free rate	4.11%	1.69% - 2.79%

RSUs granted under the 2021 Plan have a ten-year contractual term and typically vest over a three or four-year period, contingent upon continued service with the Company. The following table summarizes the Company’s restricted stock units’ activity for the year ended December 31, 2024:

During the years ended December 31, 2024, 2023 and 2022, the Company granted 1,992,071, 776,359 and 929,090 RSUs, respectively. The grant date fair value for RSUs is the thirty-day trailing average market price of the common stock on the date of grant.

As of December 31, 2024, there was approximately $24,792 total unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted average period of 1.65 years.

On March 8, 2024, the Company granted 241,881 performance share units (“PSUs”) with a weighted-average fair value of $11.69 to certain executives, of which 21,638 were forfeited with a weighted-average fair value of $11.00 during the six months ended June 30, 2024. The grant date fair value of PSUs granted to the Chief Executive Officer was calculated using a Monte Carlo simulation and was based on assumptions, including expected volatility of 59.7%, expected dividends of 0%, and a 4.21% risk-free rate. Other granted PSUs’ fair value were based on the Company’s share price on the date of grant, or $11.00 per share. The PSUs will vest based on the Company’s achievement level relative to Adjusted Free Cash Flow (“aFCF”) for the trailing twelve months ending December 31, 2026, or the consummation of a change in

control if earlier (“Performance Period”). aFCF is defined as Total Operating Cash Flow plus Investing Cash Flow adjusted for certain nonrecurring items. Upon achievement of the minimum threshold performance metric, the executive may earn a pro rata portion of their respective target shares and up to 200% of their target shares upon maximum achievement. The Chief Executive Officer was granted 166,924 of the 241,881 PSUs which may be further increased or decreased by up to 25%, based on the achievement of Relative Total Stockholder Return, as defined as the stockholder return of the Company relative to certain of its peer companies within the Healthcare Equipment Select Industry Index. The PSUs additionally require the executive to provide service over the performance period. Termination of service prior to completion of the Performance Period, except by reason of death or disability, will result in automatic forfeiture of the performance share units. If the executive’s termination of service occurs by reason of death or disability on or after January 1, 2025, a pro-rata number of the PSUs shall vest at the level based on actual performance through the end of the Performance Period, multiplied by a fraction equal to (x) the number of days elapsed between the beginning of the Performance Period and the date of executive’s termination of service, divided by (y) the total number of days in the Performance Period.

On August 7, 2024, the Company granted 124,835 PSUs with a weighted-average fair value of $8.45 to the Company’s Chief Financial Officer (“CFO”) and EVP of Supply Chain Operations. The grant date fair value of PSUs granted to the CFO and EVP of Supply Chain Operations was calculated using a Monte Carlo simulation and was based on assumptions, including expected volatility of 60.8%, expected dividends of 0%, and a 3.88% risk-free rate. The PSUs will vest based on the Company’s achievement level relative to Adjusted Free Cash Flow for the trailing twelve months ending December 31, 2026, or the consummation of a change in control if earlier.

Stock-based compensation expense is recognized on a straight-line basis over the vesting period, beginning at the point in time that the performance condition is considered probable of achievement. The probability of achieving the performance condition is assessed at each reporting period. If it is deemed probable that the performance condition will be met, compensation cost will be recognized based on the grant date fair value of the award expected to be earned. If it is deemed that it is not probable that the performance condition will be met, the Company will discontinue the recognition of compensation cost and any compensation cost previously recorded will be reversed. At December 31, 2024, achievement of the performance condition for the performance share units was deemed probable with 332,053 PSUs expected to vest, and the expense recorded for the year ended December 31, 2024, was $1,253. Stock-based compensation expenses are recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss.

Stock-based compensation expenses are recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. During the years ended December 31, 2024, 2023 and 2022, the Company recognized $2,038, $5,542 and $8,500 respectively, of compensation expense related to stock options. During the years ended December 31, 2024, 2023 and 2022, the Company recognized $9,726, $6,822 and $1,865, respectively, of compensation expense related to RSUs.