Restricted Stock Units

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

On March 18, 2024, the number of shares of common stock reserved for issuance of RSU under the Company’s 2014 Stock Incentive Plan (the “2014 Plan”) was increased to 4.6 million and the term of the 2014 Plan was extended to March 18, 2034. The RSUs generally have two vesting requirements, a time and service-based requirement (the “Time-Based Requirement”) and a liquidity event requirement (the “Liquidity Event Requirement”). The Liquidity Event Requirement will be satisfied as to any then-outstanding RSUs on the first to occur of: (1) a change in control event (as defined in the award agreement) or (2) the first sale of common stock pursuant to an underwritten IPO, in either case, within 10 years of the grant date. The Time-Based Requirement generally requires four years for full vesting of the grants, with 25% vesting after one year and quarterly vesting over the subsequent three years. Certain grants have had modified time-based vesting requirements, including certain grants that have been issued with the Time-Based Requirement satisfied on the grant date.

On April 26, 2024, in connection with the Company’s IPO, our board of directors approved and adopted, subject to stockholder approval, the 2024 Stock Incentive Plan (“2024 Plan”), and our stockholders approved the 2024 Plan on April 29, 2024. The 2024 Plan became effective on May 8, 2024 and supersedes our 2014 Plan.

The following table summarizes the Company's RSU activity for the three months ended March 31, 2024:


	Weighted Average			Restricted Stock Units
	Grant Date Fair Value		Remaining Contract Term (in years)	Granted	Time Vested	Time Non-Vested
Balance as of December 31, 2023	$	7.20	6.56	3,398,276	2,060,651	1,337,625
Granted	15.65		9.87	957,525	—	957,525
Vested	5.85		9.17	—	94,474	(94,474)
Forfeited / canceled	8.25		5.36	(53,623)	—	(53,623)
Balance as of March 31, 2024	$	9.09	7.12	4,302,178	2,155,125	2,147,053

During the three months ended March 31, 2024, the grant date fair value of the RSU awards was derived from an interpolation based on the contemplated listing price of the Company’s anticipated IPO.

Historically the Company has not recorded stock-based compensation expense for the RSUs, due to the Liquidity Event Requirement not being probable. The Company has valued the unrecorded stock-based compensation expense, using historical estimates of the fair value of the Company's common stock. Should the Liquidity Event Requirement (“Liquidity Event”) become probable, the Company would incur stock-based compensation expense associated with (i) active employees and service providers who have fulfilled or are in the process of fulfilling the Time Based Requirement, (ii) certain former employees and service providers whose RSUs become vested in connection with the Liquidity Event, and (iii) the acceleration of the Time Based Requirement for certain awards to executive officers, senior management and directors as a result of Liquidity Event.

As of March 31, 2024, the Company had 4,302,178 outstanding RSUs. The total grant date fair value of such outstanding RSUs in unrecognized stock-based compensation expense is $39.1 million. The 2,155,125 RSUs which have contractually met the Time-Based Requirement as of March 31, 2024, have a grant date fair value of $12.8 million. The remaining 2,147,053 RSUs which have not met the Time-Based Requirement as of March 31, 2024, have a grant date fair value of $26.3 million.

On May 13, 2024, the Liquidity Event Requirement was satisfied with the completion of the Company’s IPO. See Note 13 for further discussion.

As a result, effective with the Company’s IPO, the Company will record cumulative stock-based compensation expense for the service period through such date using the straight-line attribution method, net of actual forfeitures, based on the grant-date fair value of the RSU awards. Had the IPO and Liquidity Event been completed on March 31, 2024, the Time Based Requirement would be accelerated in accordance with their terms for an additional

228,043 RSUs, and the Company would have recognized cumulative combined stock-based compensation expense of $16.5 million for active and former employees and service providers as of March 31, 2024.