STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

The components of stock-based compensation expense were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Stock options	$	73	$	205	$	311	$	312
Restricted common stock(1)	98		1,402		47		4,174
Restricted stock units	—		225		14		1,444
Capitalized costs(2)	(4)		(59)		(4)		(169)
Total stock-based compensation expense	$	167	$	1,773	$	368	$	5,761

(1) See the section entitled “—Jamie Siminoff Restricted Common Stock” below.

(2) Included in internally-developed software, net on the accompanying Condensed Consolidated Balance Sheets.

Stock-based compensation expense is included in cost of revenue, research and development, sales and marketing and general and administrative on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Cost of revenue	$	(1)	$	—	$	1	$	3
Research and development	7		141		53		676
Sales and marketing	(2)		30		37		33
General and administrative	163		1,602		277		5,049
Total stock-based compensation expense	$	167	$	1,773	$	368	$	5,761

Stock Incentive Plans

In January 2016, Legacy Latch adopted the Latch, Inc. 2016 Stock Plan (the “2016 Plan” and, together with the Latchable, Inc. 2014 Stock Incentive Plan, the “Prior Plans”). Under the 2016 Plan, Legacy Latch’s board of directors was authorized (i) to grant either incentive stock options (“ISOs”) or non-qualified stock options (“NSOs”) to purchase shares of the Company’s common stock to its employees and (ii) to grant NSOs to purchase shares of the Company’s common stock to outside directors and consultants. When the 2021 Plan (defined below) became effective, 22,797,955 shares (adjusted for the exchange ratio of the 2021 Business Combination (the “Exchange Ratio”)) had been authorized for issuance under the 2016 Plan. Stock options under the 2016 Plan were granted with an exercise price equal to the stock’s fair market value at the grant date. Stock options outstanding under the 2016 Plan generally have ten-year terms and vest over a four-year period starting from the date specified in each award agreement. Since the effectiveness of the 2021 Plan, no additional awards have been or will be granted under the 2016 Plan. Upon the effectiveness of the 2021 Business Combination, all outstanding stock options under the Prior Plans, whether vested or unvested, converted into options to purchase a number of shares of common stock of the Post-Combination Company based on the Exchange Ratio. Awards previously granted under a Prior Plan remain subject to the provisions of such Prior Plan.

The Latch, Inc. 2021 Incentive Award Plan (the “2021 Plan”) was approved by the TSIA stockholders on June 3, 2021 and became effective upon the closing of the 2021 Business Combination. The 2021 Plan provides for the grant of stock options, including ISOs and NSOs, stock appreciation rights, restricted stock, RSUs and other stock-based and cash-based awards. The 2021 Plan has a term of ten years. The aggregate number of shares of the Company’s common stock available for issuance under the 2021 Plan is equal to (i) 22,500,611 shares plus (ii) an annual increase for ten years on the first day of each calendar year beginning on January 1, 2022, equal to the lesser of (a) 5% of the aggregate number of shares of the Company’s common stock outstanding on the last day of the immediately preceding calendar year and (b) such smaller amount of shares as determined by the Company’s board of directors. Effective January 1, 2022, 2023, 2024 and 2025, the number of shares reserved for future issuance under the 2021 Plan increased by 7,116,177, 7,267,376, 8,810,007 and 8,241,264 shares, respectively. As of September 30, 2025, there were 38,443,376 shares available for future grants under the 2021 Plan.

Stock Options

A summary of the status of stock options as of September 30, 2025, and changes during the nine months ended September 30, 2025, is presented below:


	Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term(1)	Aggregate Intrinsic Value
Balance at December 31, 2024	26,436,951	$	0.56
Options granted	700,000	$	0.16
Options exercised	—	$	—
Options forfeited	(4,531,832)	$	0.46
Options expired	(500,402)	$	0.13
Balance at September 30, 2025	22,104,717	$	0.58	6	$	—
Exercisable at September 30, 2025	12,013,397	$	0.71	2	$	—

(1) Approximately 3.9 million outstanding and exercisable stock options have been excluded from the computation of the weighted average remaining contractual term. The remaining contractual term of such options could not be reasonably estimated as the term end date will not be known until the suspension of the S-8 Registration Statement (as defined below) lapses.

Total compensation expense not yet recognized related to unvested stock options was $0.1 million as of September 30, 2025, which was expected to be recognized over a weighted-average period of 1.4 years. Stock options granted prior to 2024 had no material impact on the accompanying condensed consolidated financial statements. As of September 30, 2025, total compensation expense not yet recognized related to the unvested performance stock options granted in 2024 was $1.7 million, which was expected to be recognized over a weighted-average period of 4.4 years.

Restricted Stock Units

The Company’s RSUs are settled in shares of common stock after vesting and vest over a period of one to four years. The Company has the option, but not the obligation, to treat a participant’s failure to provide timely payment of any withholding tax arising in connection with RSUs as such participant’s election to satisfy all or any portion of the withholding tax by requesting the Company retain shares otherwise issuable pursuant to the RSU. In connection with the Restatement, the Company suspended use of its registration statement on Form S-8 under the Securities Act (the “S-8 Registration Statement”) on August 10, 2022. Since such date, the Company has not granted any RSUs.

A summary of RSU activity is presented below:


	Number of RSUs	Weighted Average Grant Date Fair Value (per unit)
Balance at December 31, 2024	375,640	$	6.26
Granted	—	$	—
Vested and released	—	$	—
Forfeited	—	$	—
Balance at September 30, 2025	375,640	$	6.26

Approximately 0.1 million and 0.3 million RSUs vested during the nine months ended September 30, 2025 and the year ended December 31, 2024, respectively, but were not released upon vesting due to the suspension of the S-8 Registration Statement.

Jamie Siminoff Restricted Common Stock

On the closing of the Company’s acquisition of HDW, the Company issued to HDW’s stockholders as merger consideration approximately 29.0 million shares of the Company’s common stock, including approximately 19.1 million shares to Mr. Siminoff (the “Siminoff Shares”).

Upon issuance by the Company, the Siminoff Shares were subject to vesting considerations and restrictions on transfer pursuant to a stock restriction agreement dated May 15, 2023 (the “Original Siminoff Stock Restriction Agreement”). The Company estimated the fair value of the Siminoff Shares on the closing date of the HDW acquisition to be $26.7 million based upon the $1.40 closing price of the Company’s common stock on such date. Of the $26.7 million, $5.7 million was attributable to pre-combination service and included in the consideration transferred and $21.0 million was attributable to post-combination service to be recognized as stock-based compensation expense over the estimated service period of 3.8 years.

On November 18, 2024 (the “Siminoff Agreement Date”), the Company and Mr. Siminoff mutually agreed that Mr. Siminoff would step down as the Company’s Chief Strategy Officer on December 31, 2024, after which he began serving in an advisory role that was expected to continue through December 31, 2026 (such advisory services, the “Advisory Services,” and such date, the “Advisory End Date”).

On the Siminoff Agreement Date, Mr. Siminoff and the Company entered into a Separation and Advisory Agreement and Release, pursuant to which the Company and Mr. Siminoff agreed to amend and restate the Original Siminoff Stock Restriction Agreement.

Pursuant to the amended and restated common stock restriction agreement (the “Restated Restriction Agreement”), the Company exercised its repurchase option with respect to 15,260,540 of the Siminoff Shares for $0.00005080 per share (the “Repurchase Price”), or a total payment of $775.24.

Pursuant to the Restated Restriction Agreement, the 3,815,135 Siminoff Shares that were not repurchased (the “Remaining Shares”) were subject to transfer restrictions and an amended repurchase option (the “Amended Repurchase Option”), pursuant to which the Company had the right to repurchase the Remaining Shares at the Repurchase Price to the extent not released from the transfer restrictions and the Amended Repurchase Option by the fifth anniversary of the effective date of the Restated Restriction Agreement.

The Remaining Shares were split into two tranches with different provisions governing their release from the transfer restrictions and the Amended Repurchase Option: the Separation Shares and the Advisory Shares (each as hereafter defined).

The “Separation Shares” consisted of 2,861,351 shares (representing 75% of the Remaining Shares) releasable from the transfer restrictions and the Amended Repurchase Option in equal tranches based upon the Company’s common stock reaching specified market trading prices. For the three and nine months ended September 30, 2025, the Company recognized stock-based compensation expense of $0.1 million and $0.3 million, respectively, related to the Separation Shares. The unrecognized stock-based compensation expense related to the Separation Shares was $0.5 million as of September 30, 2025, which was being expensed over a weighted-average period of 3.0 years.

Prior to the execution of the Restated Restriction Agreement, the Company recognized stock-based compensation expense of $1.4 million and $4.2 million for the three and nine months ended September 30, 2024, respectively, of the $21.0 million attributable to post-combination service. Total unrecognized stock-based compensation expense related to the Siminoff Shares as of September 30, 2024 was $14.1 million, which was being expensed over a period of 2.5 years.

The “Advisory Shares” consisted of 953,784 shares (representing 25% of the Remaining Shares) releasable from the transfer restrictions and the Amended Repurchase Option on the Advisory End Date, provided that a termination of the Advisory Services had not occurred prior to such date. In the event of such termination, certain Advisory Shares would not be released, as set forth in the Restated Restriction Agreement.

In May 2025, the Company terminated the Advisory Services. In connection therewith, the Company repurchased 0.8 million of the Advisory Shares from Mr. Siminoff for the Repurchase Price, or a total payment of $40.16, with the balance released from the Amended Repurchase Option and the transfer restrictions. The repurchase resulted in the reversal of $0.2 million of stock-based compensation expense by the Company