10. Stock-based compensation

Incentive Plans

The Company’s 2024 Equity Incentive Plan (the “2024 Plan”) provides for the Company to sell or issue common stock or restricted stock, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, directors and consultants of the Company. The 2024 Plan is administered by the Board, or its delegee.

On April 16, 2026, in connection with the Company's initial public offering, the Company adopted the 2026 Incentive Award Plan (the "2026 Plan"), which provides for the issuance of cash and equity awards. The number of shares initially available for issuance under awards granted pursuant to the 2026 Plan was 14,011,037 shares. The 2026 Plan provides that, on the first day of each calendar year beginning on and including January 1, 2027 and ending on and including January 1, 2036, the number of shares available for issuance under the 2026 Plan shall be increased by that number of shares equal to the lesser of (a) 5% of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the Board. Following the adoption of the 2026 Plan, any shares subject to an award issued under the 2024 Plan or the 2026 Plan that expires, lapses or is terminated, exchanged for or settled in cash, surrendered, repurchased, or canceled without having been fully exercised/settled, will become available for future grant under the 2026 Plan. As of September 30, 2026, 9,156,475 shares remained available for future grant under the 2026 Plan.

The exercise prices, vesting and other restrictions are determined at the discretion of the Board, or its delegee, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the common stock on the date of grant and the term of the stock option may not be greater than ten years. The Company generally grants stock-based awards with service conditions only (“service-based” awards) which generally vest over three or four years. The Company also has granted performance-based awards which vest upon the achievement of specified events and market condition awards which vest upon the satisfaction of certain market-based conditions. Stock options generally expire after ten years.

Employee Stock Purchase Plan

On April 16, 2026, in connection with the Company's initial public offering, the Company adopted the 2026 Employee Stock Purchase Plan (the "ESPP"), which provides for the issuance of up to 1,295,482 shares of common stock. The ESPP provides that, on the first day of each calendar year beginning on and including January 1, 2027 and ending on and including January 1, 2036, the number of shares available for issuance under the ESPP shall be increased by that number of shares equal to the lesser of (a) 1% of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the Board.

Stock option activity

The aggregate intrinsic value of stock options is calculated as the amount by which the fair value of the Company's common stock exceeds the exercise prices of the underlying stock options. The intrinsic value of stock options exercised during the three and nine months ended September 30, 2026 was $0.8 million and $2.0 million, respectively. There were no stock options exercised during the three and nine months ended September 30, 2025.

The weighted-average grant-date fair value of the Company’s stock options granted for the three and nine months ended September 30, 2026 was $13.52 and $10.69, respectively. The weighted-average grant-date fair value of the Company’s stock options granted for the three and nine months ended September 30, 2025 was $3.85 and $3.81, respectively.

Stock option valuation

The Company uses the Black-Scholes model to value its stock option grants that vest based on the passage of time or the achievement of certain performance criteria and expenses the related compensation cost using the straight-line method over the vesting period. The assumptions that the Company used to determine the grant-date fair value of stock options granted during the three and nine months ended September 30, 2026 and 2025 were as follows, presented on a weighted-average basis:

During the three and nine months ended September 30, 2026, the Company also granted stock options that vest upon the achievement of certain share price thresholds. The Company accounted for these stock options as market condition awards and used the Monte Carlo valuation model to determine the fair value of the stock options and an expense recognition period of approximately 1.3 years. As of September 30, 2026, there were a total of 1,302,000 market condition stock options outstanding.

Stock-based compensation

As of September 30, 2026, total unrecognized compensation cost related to the unvested stock-based awards was $92.3 million, which is expected to be recognized over a weighted-average period of 2.7 years.