Equity-based compensation

9 Months Ended

Sep. 28, 2024

Compensation And Employee Benefit Plans [Abstract]

2021 Plan

The Company operates an equity-based compensation plan (the “2021 Plan”), which allows for the issuance of stock options (incentive and nonqualified), restricted stock, dividend equivalents, restricted stock units (“RSUs”), other stock-based awards, and cash awards (collectively, the “2021 Plan Awards”). As of September 28, 2024, 19,564,333 shares of Class A common stock have been authorized to be awarded under the 2021 Plan and 9,020,111 shares were available for 2021 Plan Awards.

2023 Plan

The Company also operates the 2023 Retention Equity Award Plan (the “2023 Plan” and, together with the 2021 Plan, the “Plans”), the purpose of which is to retain and motivate critical personnel over the short-term by providing them additional incentives in the form of RSUs (the “Retention Awards” and together with the “2021 Plan Awards,” the “Awards”). As of September 28, 2024, 600,000 shares of Class A common stock were authorized to be awarded under the 2023 Plan and 66,450 shares were available for Retention Awards.

Activity under the Plans

Expense

Equity-based compensation, net for Awards granted under the Plans for the three and nine months ended September 28, 2024 totaled $2,064 and $8,112, respectively. Equity-based compensation, net for Awards granted under the Plans for the three and nine months ended September 30, 2023 totaled $1,734 and $655, respectively. Expenses and expense reductions are primarily included in selling, general and administrative expense with a nominal amount in research and development expense within the consolidated condensed statements of operations and comprehensive loss based upon the department of the employee. There were no income tax benefits related to equity-based compensation expense for the three and nine months ended September 28, 2024 and September 30, 2023.

Restricted Stock Units

During the three and nine months ended September 28, 2024, the Company granted time-based RSUs which vest at various dates through March 15, 2028. RSU compensation expense is recognized over the vesting period, which is typically between 1 and 4 years. Unamortized compensation expense related to the RSUs totaled $5,739 at September 28, 2024, and is expected to be recognized over a weighted average period of approximately 2.45 years. A summary of the RSU award activity for the nine months ended September 28, 2024 is as follows (number of units in thousands):


	Number of units	Weighted-average grant-date fair value per unit
Unvested at December 31, 2023	2,066	$	4.51
Granted	2,463	5.45
Vested	(1,583)	4.63
Forfeited or canceled	(146)	6.87
Unvested at September 28, 2024	2,800	$	5.09

Stock Options

During the three and nine months ended September 28, 2024, the Company granted time-based stock options which vest over 1 to 4 years following the date of grant and expire within 10 years. The fair value of time-based stock options is determined using the Black-Scholes valuation model, with such value recognized as expense over the service period, which is typically 1 to 4 years, net of actual forfeitures. A summary of the Company’s assumptions used in determining the fair value of the stock options granted during the nine months ended September 28, 2024 is shown in the following table:


Risk-free interest rate	3.9% - 4.3%
Expected dividend yield	—	%
Expected stock price volatility	36.1% - 36.4%
Expected life of stock options (years)	6.25

The weighted-average grant date fair value of options granted during the nine months ended September 28, 2024 was $2.25 per share. The expected term of the options granted is estimated using the simplified method. Expected volatility is based on the historical volatility of the Company’s peers’ common stock. The risk-free interest rate is determined based upon a constant U.S. Treasury security rate with a contractual life that approximates the expected term of the option. Unamortized compensation expense related to the options totaled $3,506 at September 28, 2024, and is expected to be recognized over a weighted average period of approximately 2.92 years.

A summary of stock option activity is as follows for the nine months ended September 28, 2024 (number of options in thousands):


	Number of options	Weighted-average exercise price		Weighted average remaining contractual term	Aggregate intrinsic value
Outstanding at December 31, 2023	4,347	$	8.68
Granted	1,763	5.18

Exercised	(361)	6.28
Forfeited or canceled	(826)	10.45
Outstanding at September 28, 2024	4,923	7.58		7.54	$	22,424
Exercisable and vested at September 28, 2024	1,871	$	10.30	5.56	$	1,379

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s Class A common stock for options that had exercise prices lower than $11.64 per share, as this was the closing price of the Company’s Class A common stock on September 27, 2024, the last trading day of the second quarter.

Employee Stock Purchase Plan

The Company operates a non-qualified Employee Stock Purchase Plan (“ESPP”), which provides for the issuance of shares of the Company’s Class A common stock to eligible employees of the Company that elect to participate in the plan and purchase shares of Class A common stock through payroll deductions at a discounted price. As of September 28, 2024, the aggregate number of shares reserved for issuance under the ESPP was 1,393,982. A total of 125,622 shares were issued under the ESPP and $215 of expense was recognized during the nine months ended September 28, 2024. A total of 93,092 and 460,019 shares were issued under the ESPP and $99 and $292 of expense was recognized during the three and nine months ended September 30, 2023, respectively.