STOCK-BASED COMPENSATION AND ESPP |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCK-BASED COMPENSATION AND ESPP | NOTE 10 – STOCK-BASED COMPENSATION AND ESPP The number of shares authorized and to be issued, as they are disclosed below, has been restated to reflect the Reverse Stock Split effected on May 14, 2026. During the six months ended June 30, 2025, the Company granted stock options with a service condition covering 1,867,585 shares for a total grant-date fair value of $3.8 million to employees under the 2019 Stock Incentive Plan (the “2019 Plan”). During the six months ended June 30, 2026, the Company granted stock options and restricted stock units to employees and directors under the 2019 Plan for awards prior to the IPO and under the 2026 Stock Incentive Plan (“2026 Plan”) after the IPO. The 2019 Plan was amended on March 6, 2026 to authorize an additional 34,151,952 shares of common stock to be available under the plan and was terminated on April 13, 2026 in anticipation of the IPO, being replaced by the 2026 Plan. Any awards outstanding under the 2019 Plan remained outstanding. On January 26, 2026, the Company granted stock options with a service condition, covering 4,184,750 shares with a total grant-date fair value of $16.9 million. On March 6, 2026, the Company granted stock options covering 9,959,797 shares. Of the total March 6, 2026 grant, stock options covering 233,805 shares have a service condition and a total grant-date fair value of $1.9 million and stock options covering 2,431,498 shares include both a service condition and performance-based vesting condition tied to an operational milestone and have a total grant-date fair value of $19.6 million. As of June 30, 2026, the performance condition related to certain awards granted on March 6, 2026 was considered probable of being achieved, and therefore, the related stock-based compensation expense was recognized during the three and six months ended June 30, 2026. The remaining stock options covering 7,294,494 shares, comprised of three tranches split evenly, contained a performance condition dependent on the Company completing its IPO which has been met during the three months ended June 30, 2026. The remaining vesting conditions for this grant include a) a performance-based vesting condition tied to operational milestones, b) the achievement of either a market-based condition or another performance-based condition tied to operations and c) a service condition. The total grant-date fair value was $11.3 million, $16.7 million, and $13.6 million for each of the respective tranches. The stock options contain a performance condition which was not considered probable of being achieved as of June 30, 2026, related to the operational milestones. Accordingly, no stock-based compensation expense has been recognized related to these awards during the three and six months ended June 30, 2026. The Company will continue to reassess the probability of achieving these conditions at each reporting period and will recognize stock-based compensation expense when such conditions are deemed probable. The grant-date fair value of the stock options with a market condition was estimated using the following Black-Scholes option-pricing model assumptions:
On April 13, 2026, the Company granted 55,554 restricted stock units to directors with a service condition, for a total grant-date fair value of $1.5 million. On June 15, 2026, the Company granted 533,708 restricted stock units to employees with a service condition, for a total grant-date fair value of $18.9 million. Stock-based Compensation Expense The Company recorded stock-based compensation expense, excluding the ESPP, of $7.6 million and $10.2 million for the three and six months ended June 30, 2026, respectively, and $0.6 million and $1.1 million for the three and six months ended June 30, 2025, respectively, in General and administrative expense in the Condensed Consolidated Statements of Operations. Employee Stock Purchase Plan The Company’s ESPP became effective shortly after the IPO in May 2026. The ESPP allows eligible employees to purchase shares of the Company’s Class A common stock at a discounted price through payroll deductions of up to 15% of their eligible compensation. The purchase price is equal to 85% of the fair market value of a share of common stock on the first day of an offering period or the purchase date, whichever is lower. May 21, 2026 was the initial grant date for the ESPP awards. The initial offering period consists of two purchase periods. The total grant-date fair value of the ESPP awards was $2.8 million and $3.1 million for each of the respective tranches. The grant-date fair value of the ESPP awards was estimated using the following Black-Scholes option-pricing model assumptions:
During the three and six months ended June 30, 2026, no shares had been purchased under the ESPP. The Company recorded stock-based compensation expense related to the ESPP of $0.6 million for the three and six months ended June 30, 2026, in General and administrative expense in the Condensed Consolidated Statements of Operations.
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