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Stockholders' Deficit
 9 Months Ended
Sep. 30, 2024
Stockholders' Equity Note [Abstract]  
Stockholders' Deficit
11.
Stockholders’ Deficit

Common Stock

The Company is authorized to issue 76,879,683 and 76,672,748 shares of $0.001 par value common stock as of September 30, 2024 and December 31, 2023, respectively. Authorized shares of common stock as of September 30, 2024 and December 31, 2023 include 626,398 shares of non-voting common stock, none of which are outstanding.

The holders of common stock are entitled to receive dividends whenever funds and assets are legally available and when declared by the Board of Directors, subject to the prior rights of holders of redeemable convertible preferred stock outstanding. As of September 30, 2024 and December 31, 2023, no dividends had been declared.

As of September 30, 2024 and December 31, 2023, the Company had reserved common stock for future issuance as follows:

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Conversion of Series Seed redeemable convertible preferred stock

 

 

1,218,208

 

 

 

1,218,208

 

Conversion of Series A redeemable convertible preferred stock

 

 

3,026,755

 

 

 

3,026,755

 

Conversion of Series B redeemable convertible preferred stock

 

 

4,648,714

 

 

 

4,648,714

 

Conversion of Series C redeemable convertible preferred stock

 

 

8,923,966

 

 

 

8,923,966

 

Conversion of Series B warrants

 

 

45,726

 

 

 

45,726

 

Conversion of Series C-1 warrants

 

 

56,573

 

 

 

15,228

 

Outstanding options under the 2014 Plan

 

 

4,120,841

 

 

 

4,746,527

 

Outstanding options under the 2024 EIP

 

 

1,556,057

 

 

 

—

 

Outstanding RSUs under the 2024 EIP

 

 

19,843

 

 

 

—

 

Options reserved for future issuance under the 2014 Plan

 

 

—

 

 

 

409,017

 

Options reserved for future issuance under the 2024 EIP

 

 

136,429

 

 

 

—

 

Total

 

 

23,753,112

 

 

 

23,034,141

 

 

 

Stock Incentive Plan

In 2014, the Company’s Board of Directors adopted the 2014 Stock Incentive Plan (the “2014 Plan”) under which incentive stock options (“ISO”), non-statutory stock options (“NQ”), restricted stock, restricted stock units (“RSU”), stock appreciation rights (“SAR”), dividend equivalent rights, performance stock units (“PSU”), and performance shares may be granted to its employees, directors, and consultants. To date only ISO and NQ awards have been granted. The Board of Directors determines the terms and conditions of the awards, including the number of awards to be granted and vesting criteria at the time of grant. The term of each option shall be stated in the option agreement; however, the term shall be no more than ten years from the date of the grant thereof. Options granted under the 2014 Plan generally vest over a four-year period starting from the date specified in each agreement. Stock options must be granted with an exercise price no less than the stock’s fair market value at the date of grant. Except for as-needed increases in the size of the total option pool, the 2014 Plan has had no major changes since its inception.

On April 23, 2024, the Company’s Board of Directors terminated the 2014 Plan and adopted the 2024 Equity Incentive Plan (the “2024 EIP”). An aggregate of 3,610,238 shares of the Company's common stock under the 2014 Plan plus forfeited shares to the Company under the 2014 Plan may be issued under the 2024 EIP. Upon termination of the 2014 Plan, no additional awards will be granted under the 2014 Plan. Under the 2024 EIP, ISOs, NQs, RSUs, and other stock-based awards may be granted to its employees, directors, and consultants. To date, only ISO, NQ, and performance based awards have been granted. The Board of Directors determines the terms and conditions of the awards, including the number of awards to be granted and vesting criteria at the time of grant. The term of each option shall be stated in the option agreement; however, the term shall be no more than ten years from the date of the grant thereof. Stock options must be granted with an exercise price no less than the stock’s fair market value at the date of grant.

Activity under the plans is as follows:

 

 

 

 

 

 

 

 

Weighted
average

 

 

Aggregate

 

 

 

Number of

 

 

Weighted
average

 

 

remaining
contractual

 

 

intrinsic
value

 

 

 

options

 

 

exercise price

 

 

life (years)

 

 

(thousands)

 

Balance at December 31, 2023

 

 

4,746,527

 

 

$

4.04

 

 

 

8.17

 

 

 

13,383

 

Options granted

 

 

1,713,753

 

 

 

11.68

 

 

 

 

 

 

 

Options exercised

 

 

(348,943

)

 

 

2.69

 

 

 

 

 

 

 

Options forfeited

 

 

(434,439

)

 

 

5.12

 

 

 

 

 

 

 

Balance at September 30, 2024

 

 

5,676,898

 

 

 

6.35

 

 

 

7.91

 

 

 

59,386

 

Shares outstanding, vested, and expected to vest at September 30, 2024

 

 

5,676,898

 

 

 

6.35

 

 

 

7.91

 

 

 

59,386

 

Shares exercisable at September 30, 2024

 

 

2,555,661

 

 

$

3.76

 

 

 

6.75

 

 

 

33,358

 

 

Stock-Based Compensation

As of September 30, 2024, the aggregate unrecognized compensation costs related to outstanding unvested options under the 2014 Plan and 2024 EIP was $16.3 million. The Company expects to recognize those costs over a weighted average period of 2.9 years.

Option awards included performance-based awards which are subject to the achievement of performance goals. For options subject to performance goals, the Company recognizes expense when it is probable that the performance condition will be achieved. These performance-based awards represent 118,999 and 64,527 of option awards outstanding as of September 30, 2024, and December 31, 2023, respectively.

The Company estimated the fair value of stock options using the Black-Scholes option-pricing model. The fair value of service-based stock options is amortized on a straight-line basis over the requisite service period of the awards.

The fair value of employee stock options granted was estimated using the following weighted-average assumptions:

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2024

 

2023

 

2024

 

2023

Expected term (in years)

 

 

5.5

 

 

 

 

5.1

 

 

 

 

5.4

 

 

 

 

5.0

 

 

Expected volatility

 

 

63.4

 

%

 

 

74.5

 

%

 

 

68.3

 

%

 

 

75.6

 

%

Risk-free interest rate

 

 

3.8

 

%

 

 

4.5

 

%

 

 

4.1

 

%

 

 

4.1

 

%

Dividend yield

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

The expected term is based on an average of the midpoint of the requisite service period and the contractual term, and the historical exercise behavior. The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company did not have any trading history for the Company’s common stock. The Company will continue to analyze the historical stock price volatility and expected term assumptions as more historical data for the Company’s common stock becomes available. The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history and expectation of no dividend payouts.

The Company’s total stock-based compensation expense was as follows (in thousands):

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2024

 

2023

 

2024

 

2023

Sales and marketing

 

$

395

 

 

 

$

158

 

 

 

$

837

 

 

 

$

495

 

 

General and administrative

 

 

792

 

 

 

 

351

 

 

 

 

1,894

 

 

 

 

1,103

 

 

Research and development

 

 

189

 

 

 

 

128

 

 

 

 

478

 

 

 

 

335

 

 

Total stock-based compensation expense

 

$

1,376

 

 

 

$

637

 

 

 

$

3,209

 

 

 

$

1,933

 

 

 

The total fair value of options vested are $1.2 million, $0.7 million, for the three months ended September 30, 2024 and 2023, respectively, and was $2.8 million and $1.8 million for the nine months ended September 30, 2024 and 2023, respectively. Stock-based compensation expense does not include the impact of estimated forfeitures. Forfeitures are taken as a reduction in expense in the period in which they occur. No compensation cost is recorded for awards that do not vest. Total stock-based compensation expense includes non-employee stock-based compensation of $93,000 and $64,000 for the three months ended September 30, 2024 and 2023, respectively, and $165,000 and $412,000 for the nine months ended September 30, 2024 and 2023, respectively.