Note 5. Convertible Preferred Stock and Stockholders’ Deficit

Stockholders’ Deficit

As of June 30, 2026, under the Company’s Amended and Restated Certificate of Incorporation, the Company had a total of 195,552,612 shares of capital stock authorized for issuance, consisting of 110,000,000 shares of common stock, par value of $0.0001 per share, and 85,552,612 shares of convertible preferred stock, par value of $0.0001 per share.

Convertible Preferred Stock

In 2020, the Company issued 2,134,242 shares of its Series Angel convertible preferred stock at a price of $0.94 per share, resulting in aggregate gross proceeds of $2.0 million, and incurred immaterial issuance costs.

In 2021, the Company issued 5,679,965 shares of its Series A convertible preferred stock at a price of approximately $12.50 per share, resulting in aggregate gross proceeds of $71.0 million, and incurred immaterial issuance costs.

In 2023, 2024 and 2025, the Company issued an aggregate of 10,444,753 shares of Series B convertible preferred stock at a price of $17.63 per share resulting in aggregate gross proceeds of $184.2 million and incurred $0.4 million of total issuance costs.

As of June 30, 2026, the Company’s Series Angel, Series A and Series B convertible preferred stock have been classified as temporary equity in the accompanying balance sheets given that the holders of the convertible preferred stock could cause certain events to occur that are outside of the Company’s control whereby the Company could be obligated to redeem the convertible preferred stock. The carrying value of the convertible preferred stock is not adjusted to the redemption value until the contingent redemption events are considered to be probable of occurring.

Immediately prior to the closing of the IPO in August 2026, the Company’s outstanding convertible preferred stock automatically converted into 18,258,960 shares of common stock. Following the closing of the IPO, no shares of convertible preferred stock were outstanding.

The Company’s convertible preferred stock has the following rights, preferences and privileges:

Dividends

The Company shall not declare or pay any dividends on shares of any class of capital stock of the Company unless the holders of the Series Angel, Series A or Series B convertible preferred stock shall first receive, or simultaneously receive, a dividend on each outstanding share of such convertible preferred stock equal to an amount as defined in the Company’s Amended and Restated Certificate of Incorporation. No such dividends have been declared or paid through June 30, 2026.

Preferences on Liquidation

The holders of the Series A and Series B convertible preferred stock are entitled to receive liquidation preferences, in the event of a change in control, liquidation, dissolution or winding up, at an amount per share equal to the greater of (i) the original issuance price, plus any dividends declared but unpaid or (ii) the amount per share that would be payable had the share been converted to shares of common stock immediately prior to the liquidation event. Liquidation payments to the holders of the Series A and Series B convertible preferred stock have priority and are made in preference to any payments to the holders of Series Angel convertible preferred stock and common stock. If assets available to be distributed are insufficient to pay Series A and Series B convertible preferred stockholders, amounts available will be distributed on a pro-rata basis.

After full payment of the liquidation preference to the holders of the Series A and Series B convertible preferred stock, the remaining assets, if any, will be distributed to the holders of the Series Angel convertible preferred stock. The holders of the Series Angel convertible preferred stock are entitled to receive liquidation preferences, in the event of a change in control, liquidation, dissolution or winding up, at an amount per share equal to the greater of (i) the original issuance price, plus any dividends declared but unpaid or (ii) the amount per share that would be payable had the share been converted to shares of common stock immediately prior to the liquidation event. Liquidation payments to the holders of the Series Angel convertible preferred stock have priority and are made in preference to any payments to the holders of common stock. If assets available to be distributed are insufficient to pay Series Angel convertible preferred stockholders, amounts available will be distributed on a pro-rata basis.

After full payment of the liquidation preference to the holders of the Series Angel, Series A and Series B convertible preferred stock, the remaining assets, if any, will be distributed to the holders of common stock, pro rata based on the number of shares held by each holder.

Conversion Rights

The shares of Series Angel, Series A and Series B convertible preferred stock are convertible into common stock at the option of the holder. The conversion rate for the convertible preferred stock is determined by dividing the original issue price by the conversion price. The conversion price is initially the original issue price, but is subject to adjustment for dividends, stock splits and other distributions. The conversion rate on June 30, 2026, for the Series Angel, Series A and Series B convertible preferred stock was 1:1.

Each share of Series Angel, Series A and Series B convertible preferred stock will be automatically converted into common stock at the then effective conversion rate upon: (i) the closing of the sale of common stock to the public (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the common stock), in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $50.0 million of gross proceeds to the Company; or (ii) the date and time, or the occurrence of an event, specified by vote or written consent of the majority of holders of the outstanding shares of Series Angel, Series A and Series B convertible preferred stock.

Voting

The holders of Series Angel convertible preferred stock shall be entitled to cast the number of votes equal to ten times the number of shares of Common Stock into which the shares of Series Angel convertible preferred stock held by such holder are then convertible. The holders of Series A and Series B convertible preferred stock shall be entitled to cast the number of votes equal to the number of shares of common stock into which the shares of Series A and Series B convertible preferred stock held by such holder are then convertible. The holders of Series Angel, Series A and Series B convertible preferred stock generally vote together with the shares of common stock as a single class, but also have class vote approval rights as provided by the Company’s amended and restated certificate of incorporation or as required by applicable law.

The holders of shares of Series Angel convertible preferred stock, exclusively and as a separate class, shall be entitled to elect one member of the board of directors. The holders of shares of Series A convertible preferred stock, exclusively and as a separate class, shall be entitled to elect three members of the board of directors. The holders of shares of Series B convertible preferred stock, exclusively and as a separate class, shall be entitled to elect two members of the board of directors. The holders of shares of common stock, exclusively and as a separate class, shall be entitled to elect at least one member of the board of directors. The holders of Series Angel, Series A and Series B convertible preferred stock voting together as a single class, shall be entitled to elect all remaining members of the board of directors.

Common Stock

The voting, dividend and liquidation rights of the holders of the common stock are subject to, and qualified by, the rights, preferences and privileges of the holders of the Series Angel, Series A and Series B convertible preferred stock. The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders.

Stock Options

In June 2020, the Company adopted the 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan provides for the grant of incentive stock options (“ISO”), non-statutory stock options (“NSO”), stock bonus awards and restricted stock awards. A total of 320,137 shares of common stock were initially reserved for issuance under the 2020 Plan. The 2020 Plan was subsequently amended in February 2021, July 2023 and March 2025 to increase the total number of shares available under the 2020 Plan to 691,495, 1,395,279, and 1,921,534, respectively.

Options granted under the 2020 Plan are exercisable at various dates as determined upon grant and will expire no more than ten years from their date of grant. The exercise price of each option shall be determined by the board of directors based on the estimated fair value of the Company’s stock on the date of the option grant. The exercise price shall not be less than 100% of the fair market value of the Company’s common stock at the time the option is granted. The stock option awards generally include service condition vesting terms of four years, with 25% of the award vesting one year from the vesting commencement date and then ratably over the following 36 months, though some vest over shorter periods, vesting monthly from grant date.

As of December 31, 2025 and June 30, 2026, the Company recorded receivables for amounts related to option exercises of approximately $31 thousand and $19 thousand, respectively. These amounts were received subsequent to the respective period end.

Stock-based Compensation Expense

As of June 30, 2026, the unrecognized compensation cost related to outstanding employee and non-employee options was $6.0 million and is expected to be recognized as expense over a weighted-average period of approximately 2.9 years.

Early Exercise Liability

During the three months ended June 30, 2026, the Company amended certain stock option agreements to permit holders to exercise their stock options prior to vesting. Shares issued upon early exercise that remain unvested are subject to the Company's right to repurchase such shares at the original exercise price upon termination of the holder's service. The Company's repurchase right lapses as the underlying shares vest.

The right to repurchase shares that were exercised prior to the time the options have vested generally lapses over the four-year vesting period. As of June 30, 2026, the early exercise liability was approximately $2.1 million and is included in other current and noncurrent liabilities and reclassified to equity as the shares vest. For accounting purposes, the early exercise of options is not considered to be a substantive exercise until the underlying awards vest and are not considered to be outstanding until those shares vest.