Note 6. Stockholders’ Equity and Stock-Based Compensation Expense

Stock Option and Performance Award Activity in 2026

During the three months ended March 31, 2026, stock options and unvested Performance Awards outstanding under the Company’s stock option plans changed as follows:

The weighted average exercise price per share of options outstanding at March 31, 2026 was $15.01. As outstanding options vest over the current remaining vesting period of 2.2 years, the Company expects to recognize stock-based compensation expense of $19.9 million. If and when outstanding Performance Awards vest, the Company will recognize stock-based compensation expense of $0.1 million over the implicit service period.

During the three months ended  March 31, 2026, there were no stock options exercised.

Stock-based Compensation Expense in 2026

During the three months ended March 31, 2026 and 2025, the Company’s stock-based compensation expense was as follows (in thousands):

The Company estimates forfeitures for each award in determining stock-based compensation expense. There were no estimated forfeitures during the three months ended March 31, 2026. The Company recorded $0.8 million of estimated forfeitures during the three months ended  March 31, 2025.

2018 Equity Incentive Plan

The Company’s Board of Directors (the “Board”) or a designated committee of the Board is responsible for administration of the Company’s 2018 Omnibus Incentive Plan, as amended in May 2022 (the “2018 Plan”) and determines the terms and conditions of each option granted, consistent with the terms of the 2018 Plan. The Company’s employees, directors, and consultants are eligible to receive awards under the 2018 Plan, including grants of stock options and Performance Awards. Share-based awards generally expire 10 years from the date of grant. The 2018 Plan provides for issuance of up to 5,000,000 shares of common stock, par value $0.001 per share, subject to adjustment as provided in the 2018 Plan.



When stock options or Performance Awards are exercised net of the exercise price and taxes, the number of shares of stock issued is reduced by the number of shares equal to the amount of taxes owed by the award recipient and that number of shares are cancelled. The Company then uses its cash to pay tax authorities the amount of statutory taxes owed by and on behalf of the award recipient.