Equity-Based Compensation

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

The Company maintains a single equity incentive plan, the “2023 Incentive Equity Plan”, which was adopted by the Board of Directors and approved by stockholders in connection with the Business Combination. A total of 5,300,000 shares were authorized under the 2023 Incentive Equity Plan. The number of shares of common stock available for issuance under the 2023 Incentive Equity Plan will be increased annually on the first day of each fiscal year during the term of the 2023 Incentive Equity Plan by an amount equal to the lesser of (a) 5% of the shares of common stock outstanding on the final day of the immediately preceding calendar year or (b) such smaller number of shares as determined by the Company’s board of directors. At December 31, 2024, 751,028 shares were available for grant under the 2023 Incentive Equity Plan. The purpose of the 2023 Incentive Equity Plan is to attract and retain personnel for positions with the Company, to provide additional incentive to employees, directors, and consultants, and to promote the success of the Company’s business. The Plan permits the grant of Incentive Stock Options (“ISO”) to any ISO Employee and the grant of Non statutory stock options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, and Performance Awards to any Service Provider.

Restricted Stock Units

A summary of the RSU activity during the twelve month period ending December 31, 2024 is as follows:


	Twelve Months Ended December 31, 2024
	Restricted Stock Units	Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2023	—	$	—
Granted	4,760,521	$	4.82
Vested	(2,398,005)	$	5.47
Forfeited/Cancelled	(36,729)	$	—
Outstanding as of December 31, 2024	2,325,787	$	4.15

The Company recognized $17.7 million in stock-based compensation expense related to outstanding RSUs during the twelve months ended December 31, 2024. The amount comprises of $12.2 million recorded in APIC, $2.2 million related to Non-controlling interest and $3.3 million expense related to payment of tax withholding obligation on net RSU settlements

As of December 31, 2024, there was approximately $4.9 million of total unrecognized compensation expense related to RSUs, which is expected to be recognized over a weighted-average period of approximately 1.47 years.

The fair value of the RSUs is determined on the date of the grant based on the market price of the Company’s common stock on that date. Each RSU represents the right to receive one share of the Company’s common stock, upon vesting. Portions of the RSUs granted vest immediately with others vesting over one to four years following the grant date, subject to the individual’s continued service to the Company through the applicable vesting date, some may also require the satisfaction of certain performance conditions, and all are subject to the terms and conditions on the Company’s form of RSU agreement under the 2023 Incentive Equity Plan. For awards with performance conditions, the number of restricted stock units expected to vest may change over time depending upon the performance level expected to be achieved.

Stock Options

A summary of the Stock Option activity during the twelve month period ending December 31, 2024 is as follows:


	Twelve Months Ended December 31, 2024
	Stock Options	Weighted Average Exercise Price Per Option		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (in thousands)
Unexercised Options Outstanding as of December 31, 2023	—	$	—	—	$	—
Granted	385,000	5.43		4.9	146
Options Exercised	—	—		—	—
Forfeited/Cancelled	—	—		—	—
Unexercised Options Outstanding as of December 31, 2024	385,000	5.43		4.9	146
Exercisable at December 31, 2024	17,091	$	5.23	4.9	$	8

The Company estimates the fair value of time-based and performance-based stock options on the grant date using the Black-Scholes option pricing model. The estimated fair value of these employee stock options is amortized on a straight-line basis over the requisite service period of the awards. The fair value of time-based and performance-based stock options was estimated using the following weighted-average assumptions:


	Year Ended December 31,
	2024
Risk-free interest rate	4.15	%
Expected volatility	57.72	%
Expected term (in years)	3.65
Expected dividend yield	—	%

Risk-Free Interest Rate. The Company bases the risk-free interest rate assumption for equity awards on the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

Expected Volatility. The expected volatility of stock options is estimated based on the average historical volatilities of common stock of comparable publicly traded companies and the Company's own volatility. The comparable companies are chosen based on their size and stage in the life cycle. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Expected Term. The Company's limited option exercise history does not provide a reasonable basis for estimating expected term, therefore the Company has estimated the expected life of its stock options using the simplified method, whereby the expected life equals the average of the vesting term and the original contractual term of the option.

Expected Dividend Yield. The Company’s expected dividend yield assumption is zero as it has never paid dividends and has no present intention to do so in the future.

The Company recognized $0.1 million in stock-based compensation expense related to Stock Options during the twelve months ended December 31, 2024.

As of December 31, 2024, there was approximately $0.5 million of total unrecognized compensation expense related to Stock Options, which is expected to be recognized over a weighted-average period of approximately 4.9 years.