The Company adopted the 2008 Stock Plan (“2008 Plan”) under which it may issue stock options to purchase shares of common stock, and award restricted stock and stock appreciation rights to employees, Directors and consultants. The 2008 Plan expired in March 2018 and all award issuance therefore ceased. Options generally vest over a four-year period with a one-year cliff. The option term is no longer than five years for incentive stock options for which the grantee owns greater than 10% of the Company’s capital stock and no longer than 10 years for all other options. The Company has a repurchase option on unvested restricted stock exercisable upon the voluntary or involuntary termination of the purchaser’s employment with the Company for any reason. The Company’s repurchase right lapses in accordance with the vesting terms. Options outstanding under the 2008 Plan will remain outstanding until they are exercised, canceled or expire.

In May 2018, the Company adopted the 2018 Stock Plan (“2018 Plan”) under which the Company may issue stock options to purchase shares of common stock, and award restricted stock and stock appreciation rights to employees, Directors and consultants.

Under the 2018 Plan, the Board of Directors may grant incentive stock options or nonqualified stock options. Incentive stock options may only be granted to Company employees. The 2018 Plan expired in May 2023 and all award issuance therefore ceased. The exercise price of incentive stock options and non-qualified stock options cannot be less than 100% of the fair value per share of the Company’s common stock on the grant date. If an individual owns more than 10% of the Company’s outstanding capital stock, the price of each share incentive stock option will be at least 110% of the fair value. Fair value is determined by the Board of Directors. Options generally vest over a four-year period with a one-year cliff. The option term is no longer than five years for incentive stock options for which the grantee owns greater than 10% of the Company’s capital stock and no longer than 10 years for all other options. The Company has a repurchase option on unvested restricted stock exercisable upon the voluntary or involuntary termination of the purchaser’s employment with the Company for any reason. The Company’s repurchase right lapses in accordance with the vesting terms. Options outstanding under the 2018 Plan will remain outstanding until they are exercised, canceled or expire.

In May 2023, the Company adopted the 2023 Equity Incentive Plan (“2023 Plan”) under which the Company may issue stock options to purchase shares of common stock, award restricted stock, restricted stock units (“RSU”), performance stock units (“PSUs”), dividend equivalents, stock appreciation rights, and other stock-based or cash-based awards to employees, Directors and consultants.

Stock options granted to newly hired employees generally vest over a four-year period, following the date of grant, with 25% vesting on the first anniversary of the grant date and the remaining vesting in equal monthly installments thereafter, and grants of additional stock options to employees generally vest in equal monthly installments over a four year period with no cliff vesting. As of September 30, 2024, 316,634 stock options granted under the 2023 Plan had vested and were exercisable. There have been no stock options exercised under the 2023 Plan. The RSUs generally vest over a three-year period, following the date of grant, with a third of the award vesting on each year on the annual anniversary of the grant date. As of September 30, 2024, 2,369,213 RSUs that were granted under the 2023 Plan have vested into shares of Common Stock.

Collectively, the 2008 Stock Plan, 2018 Stock Plan and the 2023 Equity Incentive Plan are referred to as “the Plans”.

The Company measures stock-based awards at their grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the awards. The Company also measures the PSU awards at their grant-date fair value and assumes that performance goals will be achieved. If the performance goals are not met, no compensation expense is recognized and any recognized compensation expense is reversed. The Company recorded stock-based compensation expense in the following expense categories in its accompanying condensed consolidated statements of operations and comprehensive loss:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Research and development	$	267	$	180	$	946	$	292
Sales and marketing		437		455		1,608		901
General and administrative		1,051		580		3,314		831
Cost of sales		31		59		126		113
Total stock-based compensation	$	1,786	$	1,274	$	5,994	$	2,137

The following table summarizes stock option activity for the Plans for the nine months ended September 30, 2024:


	Number of shares			Weighted average exercise price per share		Weighted average remaining contractual term (years)		Aggregate intrinsic value (in 000’s)
Outstanding at December 31, 2023		4,872,527		$	3.64		6.10
Granted		2,355,844		$	1.58
Exercised		(788,899	)	$	0.34
Forfeited		(253,054	)	$	5.97
Expired		(130,413	)	$	3.37
Outstanding at September 30, 2024		6,056,005		$	3.17		7.66	$	2,090
Exercisable at September 30, 2024		2,553,916		$	2.47		5.23	$	1,759
Vested and expected to vest at September 30, 2024		6,056,005		$	3.17		7.66

As of September 30, 2024, the total unrecognized compensation expense related to unvested stock option awards was $8.8 million, which the Company expects to recognize over a weighted-average period of 2.8 years.

The fair value of options is estimated using the Black-Scholes option pricing model, which takes into account inputs such as the exercise price, the value of the underlying common stock at the grant date, expected term, expected volatility, risk-free interest rate and dividend yield. The fair value of each grant of options was determined using the methods and assumptions discussed below.

The fair value of each stock option granted during the nine months ended September 30, 2024, was estimated on the date of grant using the weighted average assumptions in the table below:


	September 30, 2024			September 30, 2023
Expected volatility		72.3	%		68.1	%
Risk-free interest rate		3.5	%		4.1	%
Expected term (in years)		6.0			6.0
Expected dividend yield		—	%		—	%

The following table summarizes RSU activity for the Plans for the nine months ended September 30, 2024:


	Number of shares			Weighted average grant date fair value per share
Outstanding at December 31, 2023		872,037		$	11.27
Granted		2,369,213		$	1.43
Vested		(1,047,671	)	$	4.31
Forfeited		(91,369	)	$	8.84
Outstanding at September 30, 2024		2,102,210		$	3.75

As of September 30, 2024, the total unrecognized compensation expense related to unvested RSUs was $7.1 million, which the Company expects to recognize over a weighted-average period of 2.0 years.

During the nine months ended September 30, 2024, the Company granted an aggregate of 1,869,602 PSUs to its executives and certain personnel within the Company. The PSUs vest over a three-year period beginning on January 1, 2025, with one-third of the award eligible to vest at the end of each fiscal year through December 31, 2027, based on the Company’s level of achievement of certain performance-based criteria tied to annual net revenue and adjusted EBITDA targets. The PSUs were valued using the market value of the Company’s Common Stock at the closing market price on the grant date.

The following table summarizes the PSU activity for the Plans for the nine months ended September 30, 2024:


	Number of shares		Weighted average grant date fair value per share
Outstanding at December 31, 2023		—	$	—
Granted		1,869,602	$	1.60
Vested		—	$	—
Forfeited		—	$	—
Outstanding at September 30, 2024		1,869,602	$	1.60

As of September 30, 2024, the Company did not believe it was probable that the performance criteria associated with the PSUs would be achieved. Accordingly, no compensation expense has been recognized for these awards, and there is no unrecognized compensation cost associated with these awards. The Company will reassess the probability of achieving the performance conditions at each reporting date.