11. EQUITY-BASED COMPENSATION

In July 2021, prior to the IPO, the Company adopted the Zevia PBC 2021 Equity Incentive Plan (the “2021 Plan”) under which the Company may grant options, stock appreciation rights, restricted stock units (“RSUs”), performance stock units (“PSUs”), restricted stock awards, other equity-based awards and incentive bonuses to employees, officers, non-employee directors and other service providers of the Company and its affiliates.

The number of shares available for issuance under the 2021 Plan is increased on January 1 of each year beginning in 2022 and ending with a final increase in 2031 in an amount equal to the lesser of: (i) 5% of the total number of shares of Class A common stock outstanding on the preceding December 31, or (ii) a smaller number of shares determined by the Company’s Board of Directors.

As of  June 30, 2026, the 2021 Plan provides for future grants and/or issuances of up to approximately 1.8 million shares of our common stock. Equity-based awards under our employee compensation plans are made with newly issued shares reserved for this purpose.

Stock Options

The Company uses a Black-Scholes valuation model to measure stock option expense as of each respective grant date. Generally, stock option grants vest ratably over four years, have a 10-year term, and have an exercise price equal to the fair market value as of the grant date. The fair value of stock options is amortized to expense over the vesting period. There were no stock options granted during the six months ended June 30, 2026 and 2025.

The following is a summary of stock option activity for the six months ended June 30, 2026:

The total intrinsic values of stock options exercised during the six months ended June 30, 2026 was $0.2 million.

As of  June 30, 2026, total unrecognized compensation expense related to unvested stock options was $0.4 million, which is expected to be recognized over a weighted-average period of 1.5 years.

Restricted Stock Units

The Company granted RSUs to members of the Board of Directors and its employees. The Company's outstanding RSUs typically vest over four years with vesting contingent upon continuous service. The Company determines the fair value of the RSUs using the market price of the common stock on the date of grant.

The following is a summary of RSU activity for the six months ended June 30, 2026:

As of  June 30, 2026, total unrecognized compensation expense related to unvested RSUs was $9.4 million, which is expected to be recognized over a weighted-average period of 3.1 years.

Performance Stock Units

PSUs are awards that give the holder the right to receive one share of common stock for each PSU upon meeting performance vesting conditions. These conditions typically include the attainment of specific metrics over a defined period. The fair value of the PSUs is determined based on the closing fair market value of the common stock on the grant date and is recognized over the vesting period if it is probable that performance conditions will be achieved.

During the six months ended June 30, 2026, the Compensation Committee of the Board of Directors approved the grant of 772,011 shares of PSUs (at target performance) to certain executives. The PSUs cliff vest after three years from the grant date based on continuous service, with the number of shares earned (50% to 200% of the target awarded) depending upon the extent to which the Company achieves certain revenue metric measured over the period beginning January 1, 2026 and ending December 31, 2028. The aggregate grant date fair value was $1.0 million, or $1.24 weighted average per share. Total unrecognized compensation expense related to outstanding PSUs issued to executives as of June 30, 2026, was $1.0 million and is expected to be expensed over the next 2.7 years, if probable of vesting.