Share-Based Compensation

3 Months Ended

Mar. 29, 2025

Share-Based Payment Arrangement [Abstract]

In 2019, the Company’s 2011 Equity Incentive Plan (the “2011 Equity Incentive Plan”) was amended, restated and re-named the 2018 Equity Incentive Plan (the “2018 Equity Incentive Plan”). The shares available for issuance under the 2011 Equity Incentive Plan were added to the shares reserved for issuance under the 2018 Equity Incentive Plan. As of January 1, 2025, the maximum aggregate number of shares that may be issued under the 2018 Equity Incentive Plan increased to 27,349,482 shares, which includes an increase of 2,144,521 shares effective January 1, 2025 under the terms of the 2018 Equity Incentive Plan.

The following table summarizes the shares available for issuance under the 2018 Equity Incentive Plan:


			Shares Available for Issuance
Balance - December 31, 2024			7,489,593
Authorized			2,144,521
Granted(1)			(206,663)
Shares withheld to cover taxes			70,338
Forfeited(2)			562,368
Balance - March 29, 2025			10,060,157

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(1) Includes 145,660 shares reserved for issuance pursuant to PSUs if 200% of the applicable performance target is achieved.

(2) Includes forfeiture of an additional 80,307 shares reserved for issuance for a potential 200% achievement of the Tranche I award. See Performance Stock Units below.

As of March 29, 2025 and December 31, 2024, there were 4,211,947 and 4,392,460 shares, respectively, issuable under stock options outstanding; 1,805,678 and 2,241,231 shares, respectively, issuable under unvested restricted stock units (“RSUs”) outstanding; 145,660 and 225,967 shares, respectively, issuable under unvested PSUs outstanding; 145,660 and 225,967 shares, respectively, reserved for issuance under unvested PSUs outstanding if 200% of the applicable performance target is achieved; 11,269,442 and 10,837,816 shares, respectively, issued for stock option exercises, RSU settlement and restricted stock grants; and 10,060,157 and 7,489,593 shares, respectively, available for grant under the 2018 Equity Incentive Plan.

Stock Options

Following are the assumptions used in the Black-Scholes valuation model for options granted during the periods shown below:


	Three Months Ended
	March 29, 2025	March 30, 2024
Risk-free interest rate	N/A	4.3%
Average expected term (years)	N/A	7.0
Expected volatility	N/A	55.0%
Dividend yield	—	—

There were no option grants to employees in the three months ended March 29, 2025. Option grants to employees in the three months ended March 30, 2024 generally vest 25% of the total award on the first anniversary of the vesting commencement date, and thereafter ratably vesting monthly over the remaining three-year period, subject to continued employment through the vesting date.

The following table summarizes the Company’s stock option activity during the three months ended March 29, 2025:


	Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (in thousands)(1)
Outstanding at December 31, 2024	4,392,460	$	24.44	6.5	$	1,168
Granted	—	$	—	—	$	—
Exercised	—	$	—	—	$	—
Canceled/Forfeited	(180,513)	$	12.68	—	$	—
Outstanding at March 29, 2025	4,211,947	$	24.94	6.1	$	742
Vested and exercisable at March 29, 2025	2,878,851	$	30.30	5.0	$	742
Vested and expected to vest at March 29, 2025	3,896,959	$	26.17	5.9	$	742

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(1) Aggregate intrinsic value is calculated as the difference between the value of common stock on the transaction date and the exercise price multiplied by the number of shares issuable under the stock option. Aggregate intrinsic value of shares outstanding at the beginning and end of the reporting period is calculated as the difference between the value of common stock on the beginning and end dates, respectively, and the exercise price multiplied by the number of shares outstanding.

In the three months ended March 29, 2025 and March 30, 2024, the Company recorded $2.0 million and $1.9 million, respectively, of share-based compensation expense related to options. The share-based compensation expense is included in cost of goods sold, research and development expenses and SG&A expenses in the Company’s condensed consolidated statements of operations.

As of March 29, 2025, there was $8.6 million in unrecognized compensation expense related to nonvested stock option awards which is expected to be recognized over a weighted average vesting period of 1.0 years.

Restricted Stock Units

RSU grants to new employees in the three months ended March 29, 2025 generally vest: (i) 25% of the total award on the first anniversary of the vesting commencement date, and thereafter vest quarterly over the remaining three years of the award; or (ii) 50% of the total award on the first anniversary of the vesting commencement date, and thereafter vest quarterly over the remaining four quarters of the award, each subject to continued employment through the vesting date. RSU grants to a non-employee consultant and a brand ambassador in the three months ended March 29, 2025 vest on varying dates, subject to continued service through the vesting dates.

RSU grants to employees in the three months ended March 30, 2024 generally vest 25% of the total award on the first anniversary of the vesting commencement date, and thereafter vest quarterly over the remaining three years of the award, subject to continued employment through the vesting date. Some of the RSU grants to continuing employees in the three months ended March 30, 2024 vest 50% of the total award on the first anniversary of the vesting commencement date, and thereafter vest quarterly over the remaining four quarters of the award, subject to continued employment through the vesting date. RSU grants to non-employee consultants and brand ambassadors in the three months ended March 30, 2024 vest on varying dates, subject to continued service through the vesting date.

The following table summarizes the Company’s RSU activity during the three months ended March 29, 2025:


	Number of Units	Weighted Average Grant Date Fair Value Per Unit
Unvested at December 31, 2024	2,241,231	$	11.89
Granted	206,663	$	3.08
Vested(1)	(423,665)	$	12.13
Canceled/Forfeited	(218,551)	$	12.01
Unvested at March 29, 2025	1,805,678	$	10.81

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(1) Includes 70,338 shares of common stock that were withheld to cover taxes on the release of vested RSUs and became available for future issuance pursuant to the 2018 Equity Incentive Plan.

In the three months ended March 29, 2025 and March 30, 2024, the Company recorded $3.6 million and $4.0 million, respectively, of share-based compensation expense related to RSUs. The share-based compensation expense is included in cost of goods sold, research and development expenses and SG&A expenses in the Company’s condensed consolidated statements of operations.

As of March 29, 2025, there was $14.6 million in unrecognized compensation expense related to unvested RSUs which is expected to be recognized over a weighted average vesting period of 1.2 years.

Performance Stock Units

On March 1, 2024, the Company granted a target amount of $3.3 million in PSUs with market-based and service-based vesting conditions to certain executive officers. The market-based performance condition is

based on the Company’s total shareholder return (“TSR”) relative to a TSR comparator group (“Relative TSR Performance”) for each performance period. The TSR comparator group includes the companies included in the S&P Food and Beverage Select Industry Index, excluding companies in the S&P 500, as of the beginning of each of the three performance periods that apply to the PSUs (each performance period begins on January 1, 2024 and the performance periods end on December 31, 2024, December 31, 2025 and December 31, 2026 for a one-year, two-year and three-year performance period, respectively). The market-based performance condition allows for a range of vesting from 0% to 200% of the target amount, depending on the Company’s Relative TSR Performance for the applicable performance period, as determined by the Company’s Human Capital Management and Compensation Committee (“HCMCC”) within 60 days following the end of the performance period. In addition to the market-based vesting condition, these PSUs are subject to the continued service of the executive officers through the last day of the applicable performance period. PSUs that are unvested three months following the end of the performance period will be forfeited and returned to the 2018 Equity Incentive Plan on that date, or such earlier date as determined by the HCMCC.

The fair value of PSUs is measured on the grant date using a Monte Carlo valuation model. Each of the three performance periods is considered an individual tranche of the award referred to below as “Tranche I,” “Tranche II” and “Tranche III,” respectively.


	Number of Units	Grant Date Fair Value Per Unit		Performance Period
Tranche I	80,307	$	13.49	January 1, 2024 - December 31, 2024
Tranche II	74,714	$	14.50	January 1, 2024 - December 31, 2025
Tranche III	70,946	$	15.27	January 1, 2024 - December 31, 2026

The first performance period for the 2024 PSUs began on January 1, 2024 and ended on December 31, 2024 (the “Tranche I Performance Period”). The shares subject to the Tranche I Performance Period (the “Tranche I Target PSUs”) were to vest on the last day of the Tranche I Performance Period in an amount equal to the applicable percentage set forth below for the Relative TSR Performance for the Tranche I Performance Period, so long as the applicable executive remained a service provider through such date:


Relative TSR Performance(1)						Percentage Applicable to the Relative TSR Performance
Less than 30th percentile						0%
30th percentile						50%
50th percentile						100%
80th percentile and above						200%

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(1)Straight-line interpolation shall determine the Percentage Applicable to the Relative TSR Performance when Relative TSR Performance is between the 30th and 50th percentiles or between the 50th and 80th percentiles.

On February 4, 2025, the HCMCC determined that the Company’s Relative TSR Performance for the Tranche I PSUs was less than the 30th percentile, resulting in 0% of the Tranche I Target PSUs vesting. Accordingly, the unvested Tranche I Target PSUs were forfeited and returned to the 2018 Equity Incentive Plan share reserve for future issuance under the 2018 Equity Incentive Plan.

The market-based performance condition used for the 2024 PSU awards is based upon the company’s Relative TSR Performance, which is considered to be a market condition under FASB ASC Topic 718, for each performance period. Consistent with FASB ASC Topic 718, the full grant date fair value (at target performance) for the market-related TSR component for all three tranches of the 2024 PSU awards is included in the amounts shown. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to

service-based vesting conditions. The fair value of PSUs is measured on the grant date using a Monte Carlo valuation model. The following valuation assumptions were used in the Monte Carlo valuation model for the PSUs granted on March 1, 2024:


Assumption						As of March 1, 2024
Expected term (years)						2.8
Expected volatility						78.7%
Average correlation						21.4%
Risk-free interest rate						4.36%
Dividend yield						0%
Measurement date stock price						$9.77

•Expected Term: The expected term is based on the grant date of the PSU awards (3/1/2024) through the end of the performance period (12/31/2026).

•Expected Volatility and Correlation Assumptions: Volatility and correlation measures were based on three years of daily historical stock price data through March 1, 2024.

•Starting TSR: Starting TSR was calculated for the company and each of the companies in the TSR comparator group based on the closing price on the date of grant compared to the closing price on the trading day immediately preceding the beginning of each of the performance periods.

•Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury constant maturities yields on the grant date as reported in the H.15 Federal Reserve Statistical Release with a term corresponding to the remaining length of the performance period.

•Dividend Yield Assumption: For purposes of calculating TSR, which is inclusive of dividend payments, the dividend yield assumption is zero (i.e., stock prices include amounts that would otherwise have been paid as dividends). For purposes of discounting projected payouts to determine the fair value, the dividend yield assumption is also zero because the company is a non-dividend paying company.

The following table summarizes the Company’s PSU activity during the three months ended March 29, 2025 :


	Number of Units	Weighted Average Grant Date Fair Value Per Unit
Unvested at December 31, 2024	225,967	$	14.38
Granted	—	$	—
Vested	—	$	—
Canceled/Forfeited	(80,307)	$	13.49
Unvested at March 29, 2025	145,660	$	14.88

The total grant date fair value of the awards was determined to be $3.3 million, with each tranche of the awards representing $1.1 million of the total expense. The requisite service period for each tranche of the award is 10 months, 22 months and 34 months, respectively. Share-based compensation expense related to PSUs is recognized on a straight-line basis over their requisite service periods, regardless of whether the market condition is ultimately satisfied. Share-based compensation expense is not reversed if the achievement of the market condition does not occur.

In the three months ended March 29, 2025, the Company recorded $0.2 million of share-based compensation expense related to Tranche II and Tranche III of the PSUs. In the three months ended March 30, 2024, the Company recorded $0.2 million of share-based compensation expense related to Tranche I, II and III of the PSUs. The share-based compensation expense is included in SG&A expenses in the Company’s condensed consolidated statements of operations.

As of March 29, 2025, there was $1.1 million in unrecognized compensation expense related to unvested PSUs which is expected to be recognized over a weighted average vesting period of 1.4 years.

Employee Stock Purchase Plan

As of March 29, 2025, the maximum aggregate number of shares that may be issued under the 2018 Employee Stock Purchase Plan (“2018 ESPP”) was 4,020,975 shares of common stock, including an increase of 536,130 shares effective January 1, 2025 under the terms of the 2018 ESPP. The 2018 ESPP is expected to be implemented through a series of offerings under which participants are granted purchase rights to purchase shares of the Company’s common stock on specified dates during such offerings. The administrator has not yet approved an offering under the 2018 ESPP.