Note 8. Equity Incentive Plans

2011 Stock Option Plan and 2021 Incentive Award Plan

In 2011, the Company approved the 2011 Stock Option Plan (the “2011 Plan”) that provided for the grant of stock options to employees and nonemployees of the Company.

In July 2021, the board of directors and stockholders adopted and approved the 2021 Incentive Award Plan, (the “2021 Plan”). Under the 2021 Plan, the Company has the ability to issue incentive stock options ("ISOs"), nonqualified stock options ("NSOs"), stock appreciation rights, dividend equivalent rights, restricted stock awards, and restricted stock units ("RSUs"), including performance-based and time-based RSUs.

Stock options under the 2021 Plan can typically be granted for periods of up to ten years. For stock options granted to a grantee who, at the time the option is granted, owned stock representing more than 10% of the voting power of all classes of stock of the Company (or any parent or subsidiary of the Company), the term of the stock option may be granted for periods of up to five years. The ISOs and NSOs will be granted at a price per share not less than the fair value at the date of grant. The exercise price of a stock option granted to a 10% stockholder shall be not less than 110% of the grant date fair value of the shares. Stock options granted to new hires generally vest over a four-year period, with 25% of the shares vesting on the first anniversary of the grant date and the remaining shares vesting in 36 equal monthly installments thereafter. Stock options granted as merit awards generally vest in 48 equal monthly installments following the grant date.

RSUs are share awards that entitle the holder to receive shares of common stock upon vesting and settlement of the awards. Time-based RSUs granted to employees generally vest over a four-year period with straight-line vesting in equal amounts, either in annual or quarterly installments. Time-based RSUs granted to newly hired non-executive employees generally vest over a four-year period, with 25% of the shares vesting on the first anniversary of the grant date and the remaining shares vesting in 12 equal quarterly installments thereafter. Time-based RSUs granted to newly hired executive employees generally vest over a four-year period, with shares vesting in four (4) equal annual installments. Time-based RSUs granted to executive and non-executive employees as merit awards generally vest in 16 equal quarterly installments following the grant date.

Performance-based RSUs may be granted to executives, the vesting of which is based on achievement of performance targets, defined in each executive’s grant agreement. These awards generally vest over a three-year period in equal, consecutive installments commencing upon, and subject to and contingent upon the achievement of the performance targets. Up to 200% of the target number of shares subject to each performance-based RSU are eligible to be earned.

The Company initially reserved 5,200,000 shares of common stock for future issuance under the 2021 Plan. This initial reserve is subject to annual increase on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031. These annual increases are equal to the lesser of (i) 5% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as determined by the Company's board of directors (the "Board"), subject to certain limitations. Pursuant to the evergreen provision, the initial share reserve was increased by 2,674,685 and 2,546,899 shares on January 1, 2026 and 2025, respectively.

As of March 31, 2026 and December 31, 2025, there were 8,440,065 shares and 7,876,575 shares, respectively, of common stock available for issuance under the 2021 Plan.

The 2011 Plan was superseded by the 2021 Plan at the time of the initial public offering of the Company's common stock, which closed on July 15, 2021, and no further grants have been made under the 2011 Plan from the date the 2021 Plan became effective.

Stock Option Awards

During the three months ended March 31, 2026 and 2025, the Company recorded stock-based compensation expense of $0.2 million and $1.6 million related to stock option awards, respectively. The Company did not grant any stock option awards during the three months ended March 31, 2026 or March 31, 2025.

The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2026 was $0.3 million. The aggregate intrinsic value was calculated as the difference between the exercise prices of the underlying stock options and the estimated fair value of the common stock on the date of exercise. As of March 31, 2026, the unrecognized stock-based compensation expense relating to unvested stock options was $0.6 million, which is expected to be recognized over a weighted-average period of approximately 0.7 years.

Restricted Stock Units

During the three months ended March 31, 2026, the Company granted performance-based RSUs to certain employees, the vesting of which is dependent upon the achievement of a revenue performance target. These awards, if earned, shall vest in equal, consecutive installments over three years, with the first installment vesting upon the date of determination of the level of achievement of the performance target and accompanying number of RSUs. The number of shares included as “Granted” in the above table includes 226,043 shares. This represents achievement at 100% of the performance target, which the Company believes is probable as of March 31, 2026.

During the three months ended March 31, 2026 and 2025, the Company recorded stock-based compensation expense of $2.5 million and $2.5 million related to the RSUs, respectively, including $0.1 million and $0.0 million related to the performance-based RSUs, respectively. As of March 31, 2026, the unrecognized stock-based compensation expense relating to RSUs was $23.7 million, of which $1.4 million is related to performance-based RSUs. This expense is expected to be recognized over a weighted-average period of approximately 3.3 years.

Employee Stock Purchase Plan

In July 2021, the board of directors and stockholders approved the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP permits participants to purchase shares of common stock at a discount through payroll deductions of up to a specified percentage of their eligible compensation. Shares of common stock are offered during two offering periods annually, each running for nine months, with the first offering period typically beginning in the second quarter, and the second offering period typically beginning in the fourth quarter. The purchase of shares for participants in the ESPP occurs at the conclusion of each offering period.

The Company initially reserved 850,000 shares of common stock for future issuance under the ESPP. This initial reserve is subject to annual increase on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031. These annual increases shall be equal to the lesser of (i) 1% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as determined by the Board, subject to certain limitations. Pursuant to the evergreen provision, the initial share reserve was increased by 534,937 and 509,379 shares on January 1, 2026 and 2025, respectively.

As of March 31, 2026 and December 31, 2025, there were 2,415,148 and 1,880,211 shares of common stock available for issuance under the ESPP, respectively.

During the three months ended, March 31, 2026 and 2025, there were no shares purchased under the ESPP. As of March 31, 2026, the Company has collected payroll withholdings of $0.4 million in the current offering period for the purchase of shares under the ESPP. The Company recorded stock-based compensation expense of $0.1 million related to the ESPP for the three months ended March 31, 2026 and 2025.

Stock-Based Compensation