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Stock-Based Compensation

6 Months Ended

Jun. 30, 2025

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 7. Stock-Based Compensation

Common Stock Equity Plans

In 2010, the Company adopted the 2010 Equity Incentive Plan and later amended it in 2014, 2017 and 2018 (the Amended 2010 Plan). The Amended 2010 Plan was terminated in August 2019 and remains in effect as to outstanding equity awards granted prior to the date of expiration. No new awards may be made under the Amended 2010 Plan.

In August 2019, the Company’s stockholders approved the 2019 Stock Incentive Plan (the 2019 Plan) to replace the Amended 2010 Plan. The 2019 Plan authorizes the board of directors or the compensation committee of the board of directors to grant a broad range of awards including stock options, stock appreciation rights, restricted stock, performance-based awards, and restricted stock units. Under the 2019 Plan, 4,563 shares were initially reserved for issuance. In November 2021 and December 2024, the Company’s stockholders approved amendments increasing the number of shares reserved for issuance under the 2019 Plan by 77,674 and 1,500,000 shares, respectively.

Under the 2019 Plan, the term of all incentive stock options granted to a person who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of the Company’s stock may not exceed five years. The exercise price of stock options granted under the 2019 Plan must be at least equal to the fair market value of the shares on the date of grant. Generally, awards under the 2019 Plan will vest over a three to four-year period, and options will have a term of 10 years from the date of grant. In addition, the 2019 Plan provides for automatic acceleration of vesting for options granted to non-employee directors upon a change of control of the Company.

In December 2021, the Company assumed the Peraso Technologies Inc. 2009 Share Option Plan (the 2009 Plan) and all outstanding options granted pursuant to the terms of the 2009 Plan. Each outstanding, unexercised and unexpired option under the 2009 Plan, whether vested or unvested, was assumed by the Company and converted into options to purchase shares of the Company’s common stock and became exercisable by the holder of such option in accordance with its terms. No further awards will be made under the 2009 Plan.

The 2009 Plan, the Amended 2010 Plan and the 2019 Plan are referred to collectively as the “Plans.”

Stock-Based Compensation Expense

The Company reflected compensation costs related to the vesting of stock options of $0.2 million and $2.0 million during each of the six-month periods ended June 30, 2025 and 2024, respectively. At June 30, 2025, the unamortized compensation cost was approximately $0.8 million related to stock options and is expected to be recognized as expense over a weighted average period of approximately 2.3 years. The Company reflected compensation costs of approximately $25,000 and $0.4 million related to the vesting of restricted stock units during each of the six-month periods ended June 30, 2025 and 2024, respectively. The unamortized compensation cost at June 30, 2025 was approximately $22,000 related to restricted stock units and is expected to be recognized as expense over a weighted average period of approximately 0.3 years. No stock options were granted or exercised during the six months ended June 30, 2024.

Valuation Assumptions and Expense Information for Stock-Based Compensation

The fair value of the Company’s share-based payment awards for the six months ended June 30, 2025 was estimated on the grant dates using the Black-Scholes model with the following assumptions:

		Six Months Ended June 30, 2025
Interest rate (risk-free rate)			4.34	%
Expected volatility			119	%
Expected term			4.38 years
Expected dividend			0	%
Fair value of option grants (in thousands)		$	832

The risk-free interest rate was derived from the U.S. Treasury Yield Curve Rates as published by the U.S. Department of the Treasury as of the grant date for terms equal to the expected terms of the options. The expected volatility was based on the historical volatility of the Company’s stock price over the expected term of the options. The expected term of options granted was derived from historical data based on employee exercises and post-vesting employment termination behavior. A dividend yield of zero is applied because the Company has never paid dividends and has no intention to pay dividends in the near future. The Company accounts for forfeitures as they occur.

Common Stock Options and Restricted Stock

The term of all incentive stock options granted to a person who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of the Company’s stock may not exceed five years. The exercise price of stock options granted under the 2019 Plan must be at least equal to the fair market value of the shares on the date of grant. Generally, options granted under the 2019 Plan will vest over a three to four-year period and have a term of 10 years from the date of grant. In addition, the 2019 Plan provides for automatic acceleration of vesting for options granted to non-employee directors upon a change of control (as defined in the 2019 Plan) of the Company.

The following table summarizes the activity in the shares available for grant under the Plans during the three and six months ended June 30, 2025 and options outstanding as of June 30, 2025 (in thousands, except exercise price):

						Options Outstanding
										Weighted
		Shares								Average
		Available				Number of				Exercise
		for Grant				Shares				Prices
Balance as of December 31, 2024			1,544				30			$	130.14
Options granted			(1,325	)			1,325			$	0.78
RSUs granted			(2	)			—				—
Balance as of March 31, 2025			217				1,355			$	130.14
RSUs cancelled and returned to the 2019 Plan			1				—				—
Options exercised			—				(5	)		$	0.78
Options cancelled and returned to the 2019 Plan			95				(95	)		$	0.78
Balance as of June 30, 2025			313				1,255			$	3.54

The following table summarizes significant ranges of outstanding and exercisable options as of June 30, 2025 (in thousands, except contractual life and exercise price):

		Options Outstanding												Options Exercisable
						Weighted
						Average
						Remaining				Weighted								Weighted
						Contractual				Average								Average				Aggregate
		Number				Life				Exercise				Number				Exercise				Intrinsic
Range of Exercise Price		Outstanding				(in Years)				Price				Exercisable				Price				value
$0.00 - $1.00			1,225				9.53			$	0.78				142			$	0.78			$	44
$1.01 - $62.80			2				4.39			$	62.80				2			$	62.80				—
$62.81 - $599.60			28				5.53			$	110.13				27			$	110.32				—
$0.00 - $599.60			1,255				9.43			$	3.54				171			$	53.22			$	44

A summary of RSU activity under the Plans is presented below (in thousands, except for fair value):

						Weighted
						Average
		Number of				Grant-Date
		Shares				Fair Value
Non-vested shares as of December 31, 2024			2			$	37.69
Granted			2			$	1.00
Non-vested shares as of March 31, 2025			4			$	18.88
Vested			(1	)		$	42.65
Non-vested shares as of June 30, 2025			3			$	4.88