9. Stock-Based Compensation

2012 Equity Incentive Plan

In August 2012, the Company adopted the 2012 Equity Incentive Plan (the “2012 Plan”). The 2012 Plan provided for options, restricted stock awards, performance stock awards and stock bonuses. The exercise price of each option granted under the 2012 Plan is not less than 100% of the fair market value of one share on the date of grant. The maximum permitted term of options granted under the 2012 Plan is ten years. The Company’s board of directors administers the 2012 Plan and determines the provisions of incentive awards, including eligible recipients, number of shares subject to an incentive award, exercise price, vesting schedule, duration of an incentive award and other restrictions an incentive award may be subject to. In September 2017, the 2012 Plan was frozen and no further awards may be made under the 2012 Plan.

2017 Amended and Restated Stock Incentive Plan

In September 2017, the Company adopted the 2017 Amended and Restated Stock Incentive Plan (the “2017 Plan”). The 2017 Plan provides for the grant of options, restricted stock awards, stock appreciation rights, restricted stock units, performance awards and stock bonuses. The exercise price of each option granted under the 2017 Plan is not less than 100% of the fair market value of one share on the date of grant. The maximum permitted term of options granted under the 2017 Plan is ten years. The 2017 Plan is generally administered by the compensation committee of the board of directors, which has the authority to interpret the 2017 Plan, grant awards and make all other determinations necessary for the administration of the 2017 Plan.

The number of shares reserved for issuance under the 2017 Plan will automatically increase on January 1 of each year from 2026 to 2027 by the number of shares equal to 1.0% of the aggregate number of outstanding shares of common stock as of the immediately preceding December 31. However, the Company’s board of directors may reduce the amount of the increase in any particular year. The number of shares reserved for issuance under the 2017 Plan was automatically increased by 371,432 and 255,060 shares on January 1, 2025 and 2024, respectively.

During the years ended December 31, 2025 and 2024, the board of directors and the stockholders approved additional increases of 3,000,000 and 1,500,000, respectively, to the number of shares reserved for issuance under the 2017 Plan.

As of December 31, 2025, the number of shares available for issuance under the 2017 Plan is 2,591,634.

Stock Options

Options granted under the 2017 Plan are exercisable at various dates as determined upon grant and will expire no more than 10 years from their date of grant. The exercise price of each option shall be determined by the board of directors based on the estimated fair value of the Company’s common stock on the grant date. The exercise price shall not be less than 100% of the fair market value of the Company’s common stock on the grant date. Most option grants generally vest 25% on the first anniversary of the original vesting commencement date, with the balance vesting monthly over the remaining three years. The 2017 Plan is generally administered by the compensation committee of the board of directors, which has the authority to interpret the 2017 Plan, grant awards and make all other determinations necessary for the administration of the 2017 Plan.

The following table summarizes the activity for all stock options outstanding:

Schedule of Stock Options Activity 

In January 2025, the Company modified previously granted stock option awards to 44 employees by reducing the exercise price of these options to the Company’s closing common stock price on the modification date. During the year ended December 31, 2025, the incremental compensation expense recognized as a result of these modifications was $0.2 million. The effect of these modifications on stock-based compensation over the remaining service periods will be $0.3 million.

During the year ended December 31, 2025, the market conditions associated with options previously granted to an employee were satisfied following the achievement of the specified stock price threshold. As a result, the options vested and the Company recognized $8.4 million in stock-based compensation expense related to these awards during the year ended December 31, 2025.

During the years ended December 31, 2025 and 2024, the weighted-average grant date fair value of options granted was $25.01 and $11.22 per share, respectively. The total intrinsic value of options exercised during the years ended December 31, 2025 and 2024, was $35.7 million and $0.6 million, respectively. Upon the exercise of stock options, the Company will issue new shares of its common stock. As of December 31, 2025, the unrecognized compensation cost related to outstanding employee and non-employee options was $52.7 million and is expected to be recognized as expense over a weighted-average period of 1.7 years.

The assumptions used in the Black-Scholes option pricing model and Monte Carlo simulation model to determine the fair value of the employee and non-employee stock option grants issued, were as follows:

Schedule of Assumptions for Fair Value of Employee And Non-Employee Stock Option 

During the years ended December 31, 2025 and 2024, the Company recognized stock-based compensation expense for stock options of $20.0 million and $6.6 million, respectively.

Restricted Stock

The following table summarizes restricted stock award and restricted stock unit activity during the year ended December 31, 2025:

Schedule of Restricted Stock Award And Restricted Stock Unit Activity 

As of December 31, 2025, the unrecognized compensation cost related to outstanding restricted stock was $2.3 million and is expected to be recognized over a weighted-average period of 1.9 years. The total fair value of restricted stock vested during the year ended December 31, 2025 was less than $0.1 million.

During the years ended December 31, 2025 and 2024, the Company recognized stock-based compensation expense for restricted stock of $0.1 million and less than $0.1 million, respectively.

2017 Employee Stock Purchase Plan

In September 2017, the Company adopted the 2017 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides participating employees with an opportunity to purchase shares of the Company’s common stock at a discount through payroll deductions. The ESPP is available to all employees unless they are employed for less than 20 hours per week or own 5% or more of the total combined voting power or value of the Company’s common stock. The ESPP is administered using overlapping 24 month offering periods (the “Offering Periods”). Each Offering Period has four six-month purchase periods. A new Offering Period and purchase period begin every six months on May 1 and November 1 of each year. Participating employees may purchase common stock, on a voluntary after tax-basis, at a price equal to 85% of the fair market value of a share of common stock on either the offering date or the purchase date, whichever is lower. If the purchase date has a lower price, the employee will automatically be placed in the Offering Period beginning immediately after the purchase date.

The number of shares reserved for issuance under the ESPP automatically increases on January 1 of each year from 2023 to 2027 by the number of shares equal to 0.5% of the aggregate number of outstanding shares of common stock as of the immediately preceding December 31. However, the Company’s board of directors may reduce the amount of the increase in any particular year. The number of shares reserved for issuance under the ESPP was automatically increased by 185,716 and 127,530 shares on January 1, 2025 and 2024, respectively.

As of December 31, 2025, the number of shares available for issuance under the ESPP is 469,576.

During the years ended December 31, 2025 and 2024, the Company recognized stock-based compensation expense related to the ESPP of $1.3 million and $0.3 million, respectively.

Stock-based Compensation

The Company recognized the following stock-based compensation expense in its statements of operations (in thousands):

 Schedule of Stock-based Compensation Expenses