The Company has stock-based compensation plans under which it grants stock options, restricted stock units ("RSUs"), and performance restricted stock units ("PRSUs") to officers, directors and third parties. Total stock-based compensation for the periods presented is as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
Cost of sales	$	559	$	553	$	1,529	$	3,596
Research and development		3,605		4,159		7,606		7,803
Sales, general and administrative		13,983		10,912		32,671		26,543
Total	$	18,147	$	15,624	$	41,806	$	37,942

As of June 30, 2026, there was $96.8 million of unrecognized compensation expense for RSUs and PRSUs to be recognized over a weighted average period of 2.0 years.

The Company issued 375,682 and 4,700,362 shares of common stock, before net share settlement, upon vesting of RSUs and PRSUs during the three and six months ended June 30, 2026, respectively. The Company issued 385,769 and 3,915,180 shares of common stock, before net share settlement, upon vesting of RSUs and PRSUs during the three and six months ended June 30, 2025, respectively.

Employees are eligible to participate in the Employee Stock Purchase Plan ("ESPP") approved by its shareholders. During the three and six months ended June 30, 2026, there were 222,063 shares issued under the ESPP. During the three and six months ended June 30, 2025, there were 319,220 shares issued under the ESPP.

The Company estimates the fair value of shares issued to employees under the ESPP using the Black-Scholes option-pricing model. The assumptions used to estimate the fair value of stock options granted and stock purchase rights under the ESPP are as follows:


	Three and Six Months Ended
	June 30,
	2026		2025
Risk-free interest rate	3.77% - 3.81%		4.30% - 4.44%
Expected dividend yield		—		—
Expected term (years)		0.50		0.50
Volatility	55.85% - 84.62%		54.74% - 91.91%

In connection with debt financing entered into with Squadron Medical Finance Solutions, LLC ("Squadron Medical") in 2018, and amended in 2019 and 2020, the Company issued common stock warrants to Squadron Medical and a participant lender (the “Squadron Medical Warrants”). The Squadron Medical Warrants expire in May 2027 and are exercisable by cash or cashless exercise. No Squadron Medical Warrants have been exercised as of June 30, 2026.

The Company issued warrants to its Chairman and Chief Executive Officer (the “Executive Warrants”). The Executive Warrants had a nine-year term and are exercisable by cash or cashless exercise. No Executive Warrants have been exercised as of June 30, 2026.

A summary of all outstanding warrants for common stock as of June 30, 2026, is as follows (in thousands, except for strike price data):


	Number of Warrants		Strike Price		Expiration
2018 Squadron Medical Warrants		845	$	3.15	May 2027
2019 Squadron Medical Warrants		4,839	$	2.17	May 2027
2020 Squadron Medical Warrants		1,076	$	4.88	May 2027
Executive Warrants		1,327	$	5.00	December 2026
Other(1)		90	$	12.15	Various through December 2030
Total		8,177

(1)

Weighted-average strike price.

All outstanding warrants were deemed to qualify for equity classification under authoritative accounting guidance.