12. Equity Incentive Plan

 

On September 27, 2024, the Company’s Board of Directors approved the Company’s 2024 Equity Incentive Plan (the “Equity Incentive Plan”). On October 10, 2024, the Company granted stock options to certain individuals who were the Company’s directors and employees to purchase an aggregate of 176,017 shares of common stock at an exercise price of $6.90 per share. The options have a contractual term of ten years and vest upon the satisfaction of service conditions for Company employees and performance conditions for Company directors. Of the 176,017 stock options granted, 74,862 stock options vested on February 18, 2025 upon the completion of the Company’s IPO.

 

The fair value of the stock options was estimated using the Black-Scholes option-pricing model. The following table summarizes the significant assumptions used to estimate the fair value of the stock option.

 

Expected term  5 years 
Expected volatility   49.04%
Expected dividend rate   0.00%
Risk-free rate   3.75%

 

The Company recognized stock-based compensation expenses of $4,857 and nil during the year ended December 31, 2025 and 2024, respectively. Stock-based compensation expenses are included in selling, general and administrative expenses in the Consolidated Statements of Operations.

 

The following is a summary of stock option activity under the Company’s Equity Incentive Plan during the year ended December 31, 2025:

 

  

Number of

shares

  

Weighted-

Average Grant-

Date Fair Value

  

Weighted-average

remaining

contractual term (in years)

 
Unvested balance as of December 31, 2024   176,017   $46.91      
Granted   21,925    3.30      
Vested   (74,862)   46.91      
Forfeited   (13,825)   46.91      
Unvested balance as of December 31, 2025   109,255   $39.15    8.9 

 

As of December 31, 2025, the Company’s unrecognized stock-based compensation expense for unvested options was $3,473.

 

 

Historical Timeline

Fiscal YearFiled
2025Mar 18, 2026Showing above
2024Mar 28, 2025

About Stock Compensation Disclosures

Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.

Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.