Teknova maintains stock incentive plans for the benefit of certain of Teknova's officers, directors, consultants and employees. The Company granted time-based and performance-based options to purchase common shares under both its 2016 Stock Plan, as amended (2016 Plan) and 2020 Equity Incentive Plan, as amended (2020 Plan). At the time the 2020 Plan became effective, no additional stock awards were granted or are able to be granted in the future under the 2016 Plan. In June 2021, the Company’s board of directors and the Company’s stockholders approved the 2021 Equity Incentive Plan (2021 Plan), which became effective in connection with the IPO. From and after the date on which the 2021 Plan became effective, no further grants were made or will be made under the 2020 Plan. At December 31, 2024, 4,826,871 shares of the Company's common stock remain available for future grants under the 2021 Plan.

The types of equity-based awards that may be granted under the 2021 Plan include: incentive stock options or nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other stock-based awards. The equity-based awards for employees will vest over a four-year period, pursuant to two different vesting schedules. For initial equity-based awards granted to employees, the first vest is generally a one-year cliff vest, followed by monthly vesting for the final three years. Thereafter, annual equity-based awards granted to employees typically vest monthly over the four-year vest term, except for restricted stock units which vest annually over a four year period. The initial equity-based awards granted to the Company’s non-employee, independent directors upon appointment to the board of directors will vest over a three-year period, with the first vest being a one-year cliff, followed by monthly vesting over the remaining two years. Thereafter, annual equity-based awards granted to the Company’s non-employee, independent directors will cliff vest after one year from the date of grant.

Generally, the number of shares of the Company’s common stock that will be reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year for a period of ten years, beginning on January 1, 2022, and continuing through January 1, 2031, in an amount equal to 4% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding year; provided, however, that the Company’s board of directors may act prior to January 1 of a given year to provide that the increase for such year

will be a lesser number of shares of common stock. Effective January 1, 2025, an additional 2,136,389 new shares became available for issuance under the 2021 Plan.

The following table summarizes the stock option activity for the year ended December 31, 2024 (in thousands, except share and per share data):


	Number of Shares			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2024		4,041,807		$	6.41		7.53	$	5,159
Granted		756,400		$	2.97		—		—
Exercised		(8,865	)	$	3.33		—		—
Forfeited		(470,592	)	$	9.13		—		—
Expired		(326,415	)	$	11.99		—		—
Outstanding at December 31, 2024		3,992,335		$	4.99		6.86	$	19,318
Exercisable at December 31, 2024		2,410,383		$	5.36		6.31	$	11,752
Vested and expected to vest at December 31, 2024		3,707,653		$	5.34		7.08	$	17,070

The total intrinsic value of options exercised during the year ended December 31, 2024 and 2023 was $0.1 million and $0.1 million, respectively. The aggregate grant-date fair value of options vested during the year ended December 31, 2024 and 2023, was $2.5 million and $4.7 million, respectively.

The following table summarizes the restricted stock unit activity for the year ended December 31, 2024 (in thousands, except share and per share data):


	Number of Shares			Weighted Average Grant Date Fair Value per Share		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2024		155,780		$	5.05		1.36	$	581
Granted		60,000		$	1.29		—		—
Vested		(67,169	)	$	4.58		—		—
Forfeited		(21,000	)	$	5.41		—		—
Outstanding at December 31, 2024		127,611		$	3.47		0.84	$	1,066
Vested and expected to vest at December 31, 2024		127,611		$	3.47		0.84	$	1,066

The aggregate grant-date fair value of restricted stock units vested during the year ended December 31, 2024 and 2023, was $0.3 million and $0.2 million, respectively.

In June 2021, the Company’s board of directors and the Company’s stockholders, respectively, approved the Company’s 2021 Employee Stock Purchase Plan (the ESPP), which became effective in connection with the IPO. At December 31, 2024, 887,119 shares of the Company’s common stock remain available for issuance under the ESPP. The number of shares of the Company’s common stock that will be reserved for issuance will automatically increase

on January 1 of each year for a period of ten years, beginning on January 1, 2022, and continuing through January 1, 2031, by the lesser of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year; and (ii) 319,911 shares (subject to adjustments for stock splits, dividends, combinations of shares, exchanges of shares, and other “Capitalization Adjustments,” as defined in the ESPP), except before the date of any such increase, the Company’s board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii). Effective January 1, 2025, an additional 319,911 new shares became available for issuance under the ESPP.

Generally, all regular employees, including executive officers, employed by the Company will be eligible to participate in the ESPP and to contribute, normally through payroll deductions, up to 15% of their earnings (as defined in the ESPP) for the purchase of the Company’s common stock under the ESPP. Unless otherwise determined by the Company’s board of directors, shares of the Company’s common stock will be purchased for the accounts of employees participating in the Company’s ESPP at a price per share equal to the lesser of (i) 85% of the fair market value of a share of the Company’s common stock on the first day of an offering; or (ii) 85% of the fair market value of a share of the Company’s common stock on the date of purchase. Offering periods are generally six months long. Beginning on May 15, 2023, offering periods begin on June 1 and December 1 of each year. Prior to this time, offering periods began on May 15 and November 15 of each year.

Teknova uses the Black-Scholes option-pricing model to determine the fair value of stock options. The valuation model for stock compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term, expected volatility and fair value of the Company’s common stock, and an assumed risk-free interest rate. The assumptions used in the Black-Scholes option-pricing model were as follows:

Volatility. Since the Company has limited historical data on volatility of its stock, expected volatility is based on the volatility of the stock of similar publicly traded entities. In evaluating similarity, the Company considers factors such as industry, stage of life cycle, size, and financial leverage.

Fair value of underlying common stock. The fair value of the Company’s common stock is determined by the closing price of its common stock as reported on the Nasdaq Global Market on the date of grant.

Risk-free interest rate. The risk-free rate that the Company uses is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options.

Expected term. As the Company does not have sufficient historical exercise activity to estimate expected life, the expected life of options granted is determined using the simplified method. The simplified method is based on the vesting period and the contractual term for each grant or for each vesting tranche for awards with graded vesting. The midpoint of the vesting date and the maximum contractual expiration date are used to determine the expected term under this method.

Dividend yield. The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future. Therefore, the Company uses an expected dividend yield of zero. In addition, the terms of the Amended Credit Agreement prohibit us from paying dividends, other than dividends payable in the Company’s common stock, without the prior consent of the lender.

The weighted average assumptions used in the Black-Scholes option-pricing model were as follows:


	For the Year Ended December 31,
	Employee Stock Option Plans						Employee Stock Purchase Plan
	2024			2023			2024			2023
Estimated dividend yield		-	%		-	%		-	%		-	%
Weighted-average expected stock price volatility		35.91	%		35.10	%		30.00	%		32.00	%
Weighted-average risk-free interest rate		4.32	%		4.14	%		5.23	%		5.37	%
Expected average term of options (in years)		6.25			5.95			0.50			0.50
Weighted-average fair value of common stock	$	2.97		$	5.03		$	2.87		$	2.88
Weighted-average fair value per option	$	1.29		$	2.11		$	0.71		$	0.72

In January 2024, the Company’s board of directors approved a one-time repricing of certain previously granted and still outstanding vested and unvested stock option awards held by eligible employees, executive officers, and non-employee directors. As a result, the exercise price for these awards will be lowered to $2.97 per share effective September 14, 2025, which was the closing price of the Company’s common stock as reported on the Nasdaq Global Stock Market on March 14, 2024, so long as the holder remains employed by the Company or continues to serve as a member of the board of directors through September 14, 2025 absent earlier trigger events defined in the option repricing plan. No other terms of the stock options were modified, and the stock options will continue to vest according to their original vesting schedules and will retain their original expiration dates. As a result of the repricing, 1,631,016 vested and unvested stock options outstanding as of March 14, 2024, with original exercise prices ranging from $3.02 to $27.49, were repriced.

The repricing on March 14, 2024, resulted in incremental stock-based compensation expense of $0.9 million, of which $0.5 million related to vested stock option awards and was expensed on the repricing date. The remaining $0.4 million related to unvested stock option awards and is being amortized on a straight-line basis over the weighted-average vesting period of those awards of approximately 2.38 years as of March 14, 2024.

Stock-based compensation expense included in the accompanying financial statements was as follows (in thousands):


	For the Year Ended December 31,
	2024		2023
Cost of sales	$	112	$	142
Research and development		82		162
Sales and marketing		196		660
General and administrative		3,276		3,173
Total stock-based compensation expense	$	3,666	$	4,137

Stock-based compensation expense related to stock options was $3.4 million and $3.7 million for the years ended December 31, 2024 and 2023, respectively. Unrecognized compensation expense related to stock options was $3.2 million at December 31, 2024, which is expected to be recognized as expense over the weighted-average period of 2.77 years.

Stock-based compensation expense related to restricted stock units was $0.2 million and $0.3 million for the years ended December 31, 2024 and 2023, respectively. Unrecognized compensation expense related to restricted stock units was $0.3 million at December 31, 2024, which is expected to be recognized as expense over the weighted-average period of 1.37 years.

During the year ended December 31, 2021, the Company’s board of directors approved an amendment to the outstanding performance-based option to acquire 231,719 shares of the Company’s common stock previously granted under 2020 Plan, to eliminate the performance-based vesting and provide that such option will vest in 48 equal monthly installments. The stock option modification was measured as the excess of the fair value of the

modified option over the fair value of the original option immediately before the modification. The incremental stock-based compensation expense for such stock option modification is approximately $3.5 million, of which $0.9 million of incremental stock-based compensation expense was recognized during each of the years ended December 31, 2024 and 2023, in general and administrative expenses in the accompanying financial statements. Additionally, in January 2019, the Company granted 284,682 performance-based options that vest upon a change of control. As of December 31, 2024, these options were not considered probable of vesting. The Company had unrecognized compensation expense of approximately $0.5 million at December 31, 2024, relating to these options.

Total stock-based compensation expense related to the ESPP was not significant and $0.1 million for the years ended December 31, 2024 and 2023, respectively. Total compensation cost related to the ESPP not yet recognized is also not significant. As of December 31, 2024, an insignificant amount has been withheld on behalf of employees for a future purchase under the ESPP. The Company issued 88,926 and 148,102 shares of common stock under the ESPP during the years ended December 31, 2024 and 2023, respectively.