PULSE BIOSCIENCES, INC.

1. Description of the Business

Pulse Biosciences, Inc. is a novel bioelectric medicine company committed to health innovation using its patented Nano-pulse Stimulation (“NPS”) technology, a revolutionary energy modality that delivers nanosecond-duration pulses of electrical energy, each less than a millionth of asecond long, to non-thermally clear targeted cells while sparing adjacent noncellular tissue. NPS technology, also referred to as a Nanosecond Pulsed-Field Ablation (“nsPFA”) technology when used to ablate cellular tissue, can be used to treat a variety of medical conditions for which an optimal solution remains unfulfilled. The Company developed its proprietary CellFX System, a novel nsPFA delivery platform, and commercialized the initial application of its nsPFA technology to treat benign lesions of the skin. In parallel, the Company has designed a variety of applicators to explore the potential use of the CellFX platform to treat disorders in other medical specialties, such as cardiology, gastroenterology, gynecology, and ear nose and throat. These applicators include devices for open surgical procedures, endoscopic or minimally invasive procedures, and endoluminal catheters, and each has been used in preclinical studies. Based on our preclinical experience and the potential to significantly improve outcomes for patients in a large and growing market, the Company decided in2022 to focus its efforts on the use of nsPFA and the CellFX platform in the treatment of atrial fibrillation (“AF”), and in a select few other markets where nsPFA could have a profound positive impact on healthcare for both patients and providers, such as surgical soft tissue ablation.

The Company was incorporated in Nevada on* May 19, 2014.On June 18, 2018,*the Company reincorporated from the State of Nevada to the State of Delaware. The Company is headquartered in Miami, Florida, with its principal operating facility located in Hayward, California.

The Company’s activities are subject to significant risks and uncertainties, including the need for additional capital. The Company doesnot currently have any material cash flows from operations. It has had minimal revenue since inception and will need to raise additional capital to finance its operations. However, there can beno assurances that the Company will be able to obtain additional financing on acceptable terms and in the amounts necessary to fully fund its operating requirements.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities Exchange Commission (the “SEC”). The consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries and intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates that affect the amounts reported in the financial statements and accompanying notes to the financial statements. Estimates include, but arenot limited to, the valuation and recognition of stock-based compensation, the valuation of equity-classified subscription rights, income taxes, and the useful lives assigned to long-lived assets. The Company evaluates its estimates and assumptions based on historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from these estimates.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company places its cash equivalents with high credit quality financial institutions and, by policy, limits the amounts invested with anyone financial institution or issuer. Deposits held with banks* mayexceed the amount of insurance provided on such deposits. The Company hasnot* experienced any losses since inception.

Fair Value of Financial Instruments

The Company believes the carrying amounts of its financial instruments, including cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses, approximate fair value due to the short-term nature of such instruments.

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Cash and Cash Equivalents

The Company invests its cash primarily in money market funds. The Company considers all highly liquid investments purchased with an original maturity ofthree months or less to be cash equivalents.

Property and Equipment

Property and Equipment is recorded at cost and depreciated using the straight-line method over their estimated useful lives, ranging from three tofive years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life. Upon the sale or retirement of property and equipment, the costs and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operating expenses. Maintenance and repairs are charged to operations as incurred.

Intangible Assets

The Company’s intangible assets consist of acquired patents and licenses, which are amortized over their estimated useful lives oftwelve years.

Long-Lived Assets

The Company reviews long-lived assets, consisting of property and equipment and intangible assets, for impairment during each fiscal year or when events or changes in circumstances indicate the carrying value of these assets* may*exceed their current fair values. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. No impairment losses were incurred during the periods presented.

Goodwill

The Company records goodwill when the consideration paid in a business acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. The Company reviews goodwill for impairment at the reporting unit level, of which there isone reportable unit, at least annually or whenever changes in circumstances indicate that the carrying value of the goodwill* may**not* be recoverable. To date, there has beenno impairment of goodwill.

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Stock-Based Compensation

The Company's stock-based compensation programs include stock options and an employee stock purchase program.

The Company periodically issues stock options to officers, directors, employees, and consultants for services rendered. Such issuances vest and expire according to terms established at the issuance date. Stock-based payments to officers, directors and employees, including grants of employee stock options, are recognized in the financial statements based on their grant date fair values, which are estimated using the Black-Scholes option-pricing model. Stock-based compensation expense is charged to operations on a straight-line basis over the vesting period. The Company has granted stock options with both time-based as well as performance-based vesting conditions. For stock awards with performance-based vesting conditions, the Company doesnot recognize compensation expense until it is probable that the performance-based vesting condition will be achieved. The analysis to determine such probability involves estimates and judgements from management and the estimate of expense* maybe revised periodically. In October 2024,*the Board approved changes to the vesting conditions of certain outstanding common stock option awards so that the performance-based vesting criteria of those particular awards were modified to either time-based or market-based vesting criteria.

During2024, the Company issued certain stock options with market-based vesting conditions and modified certain performance-based stock option awards to market-based options. These vesting conditions relate to the achievement of certain market capitalization targets of the Company. Using a Monte Carlo simulation model, the Company estimated the fair value of the market-based options on the grant date or modification date, with the associated stock-based compensation expense recognized over the requisite service period. The requisite service period is the service period derived from the Monte Carlo simulation model. If the market capitalization targets are met sooner than the derived service period, the Company will accelerate the recognition of stock-based compensation expense to reflect the cumulative expense associated with the vested shares. The Monte Carlo simulation model requires the Company to make assumptions and judgements about the variables used in the calculation including the expected volatility, the risk-free interest rate, cost of equity, and the expected term. The assumptions used in the option-pricing model represent management’s best estimates. If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future.

See Note6 for a detailed discussion of the Company’s stock plans and stock-based compensation expense.

Research and Development Costs

Research and development costs consist primarily of compensation costs, fees paid to consultants and outside service providers and organizations (including university research institutes), costs associated with clinical trials, development prototypes and other expenses relating to the acquisition, design, development and testing of the Company’s product candidates, and certain facilities related costs. Research and development costs incurred by the Company are expensed as incurred.

Patent Costs

The Company is the owner of numerous domestic and foreign patents. Due to the significant uncertainty associated with the successful development ofone or more commercially viable products based on the Company’s research efforts and any related patent applications, patent costsnot related to acquired patents, including patent-related legal fees, filing fees and other costs, including internally generated costs, are expensed as incurred. During both of the years ended* December 31, 2024and2023*, patent costs totaled $0.5 million, respectively. Patent costs are included in general and administrative costs in the consolidated statements of operations and comprehensive loss.

Income Taxes

The Company accounts for income taxes under an asset and liability approach for financial accounting and reporting for income taxes. Accordingly, the Company recognizes deferred tax assets and liabilities for the expected impact of differences between the financial statements and the tax basis of assets and liabilities.

The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more-likely-than-not to be realized. In the event the Company determines that it would be able to realize its deferred tax assets in the future in excess of its recorded amount, an adjustment to the deferred tax assets would be credited to operations in the period such determination was made. Likewise, should the Company determine that it wouldnot be able to realize all or part of its deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to operations in the period such determination was made.

The Company is subject to U.S. federal income taxes and state income taxes in various states. As the Company’s net operating losses have yet to be utilized, previous tax years remain open to examination by federal authorities and other jurisdictions in which the Company currently operates or has operated in the past. The Company isnot currently under examination by any tax authority.

The Company accounts for uncertainties in income tax law under a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns as prescribed by U.S. GAAP. The tax effects of a position are recognized only if it is more-likely-than-not to be sustained by the taxing authority as of the reporting date. If the tax position isnot considered more-likely-than-not to be sustained, thenno benefits of the position are recognized. At* December 31, 2024and2023*, the Company hadnot recorded any liability for uncertain tax positions. The Company includes interest and penalties related to uncertain tax positions as a component of income tax expense.

Comprehensive Loss

The Company displays comprehensive loss, and if applicable its components, as part of the consolidated statements of operations and comprehensive loss. There wereno adjustments to comprehensive loss during both of the years ended* December 31, 2024and2023*.

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Net Loss per Share

The Company calculates basic net loss per share by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential dilutive common stock equivalents outstanding during the period. For purposes of this calculation, options to purchase common stock and common stock warrants are considered common stock equivalents. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted net loss per share.

Based on the Accounting Standards Codification ("ASC")260-10-55, Earnings Per Share - Implementation Guidance and Illustrations, the Company determined that the2024 Rights Offering (Note6), contained a bonus element. A rights offering is deemed to have a bonus element when the exercise price at issuance is less than fair value of the Company's stock. The Company has retroactively adjusted earnings per share and weighted average number of shares outstanding for the bonus element for prior periods presented.

Basic and diluted net loss per common share is the same for all periods presented because all warrants and stock options outstanding are anti-dilutive.

The following outstanding stock options and warrants were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect:

Segment and Geographical Information

The Company hasone operating and reporting segment and reports segment information in accordance with ASC280**, Segment Reporting. The Company’s Chief Executive Officer, who is the chief operating decision maker ("CODM"), reviews financial information on an aggregate basis for allocating and evaluating financial performance; however, the CODM is regularly provided with more detailed expense information than what is included in the Statement of Operations and Comprehensive Loss. See Note9 for further details of the Company's segment disclosures.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In* November 2023,the FASB issued ASU2023*-07, Segment Reporting (Topic280*): Improvements to Reportable Segment Disclosures*. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the CODM, as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic280. This ASU is effective for fiscal years beginning after* December 15, 2023,and interim periods within fiscal years beginning after December 15, 2024,with early adoption permitted. The amendments in this ASU should be applied retrospectively to all prior periods presented in the financial statements. See Note9* for details of the Company's segment reporting.

Recent Accounting PronouncementsNot* Yet Adopted*

In* December 2023,the FASB issued ASUNo.* 2023-09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures.This ASU requires greater disaggregation of information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. This ASU applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions. This ASU is effective for annual periods beginning after December 15, 2024,*with early adoption permitted. This ASU should be applied on a prospective basis although retrospective application is permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and related disclosures.

In* March 2024,the FASB issued ASUNo.* 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements, an amendment of the FASB Accounting Standards Codification. The amendments in this ASU are related to the removal of various references to FASB Concept Statements from the codification to make clear distinctions between authoritative and non-authoritative literature in the codification. This ASU is effective for fiscal years beginning after* December 15, 2024,with early adoption permitted. The Company doesnot* believe this standard will have an impact on its consolidated financial statements and related disclosures.

In* November 2024,the FASB issued ASU2024*-03, Disaggregation of Income Statement Expenses, which aims to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The guidance is effective for the Company's annual periods beginning in2027 and interim periods beginning in thefirst quarter of fiscal year2028. The Company is currently evaluating the impact of the new guidance.

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3. Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company determines the fair value of its financial instruments based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value intothree levels:

Level1 – Observable inputs such as quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level1 inputs include money market funds.

Level2 – Inputs, other than quoted prices included within Level1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. The Company didnot classify any of its investments within Level2 of the fair value hierarchy.

Level3 – Unobservable inputs for which there is little orno market data for the asset or liability which requires the reporting entity to develop its own assumptions. The Company didnot classify any of its investments within Level3 of the fair value hierarchy.

The following table sets forth the fair value of the Company’s financial assets measured on a recurring basis (in thousands):

During the years ended* December 31, 2024and2023*, the Company didnot record impairment charges related to its cash equivalents. During the years ended* December 31, 2024and2023*, the Company didnot have any transfers between Level1, Level2 or Level3 of the fair value hierarchy. Additionally, the Company didnot have any financial liabilities measured on a recurring basis as of* December 31, 2024* or2023.

4. Balance Sheet Components

Property and Equipment, net

Property and equipment, net consisted of the following (in thousands):

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Depreciation expense for each of the years ended* December 31, 2024and2023*, was $0.5 million, respectively.

Intangible Assets, net

Intangible assets primarily consist of a license to utilize certain patents, know-how and technology relating to the Company’s NPS for biomedical applications acquired from Old Dominion University Research Foundation (ODURF), Eastern Virginia Medical School (EVMS), and the University of Southern California. In addition, the Company entered into a sponsored research agreement (“SRA”) with Old Dominion University’s Frank Reidy Research Center for Bioelectrics, a leading research organization in the field, which includes certain intellectual property rights arising from the research. The Company is amortizing the intangible assets over an estimated useful life of 12 years.

Intangible assets, net consisted of the following (in thousands):

A schedule of the amortization of intangible assets is as follows (in thousands):

Accrued Expenses

Accrued expenses consisted of the following (in thousands):

5. Goodwill

In2014, the Company acquired three companies (the acquisitions) for aggregate consideration of $5.5 million. In accordance with ASC Topic805, Business Combinations, the Company recorded goodwill of $2.8 million in connection with the acquisitions, which represents the excess of consideration paid over the fair value of net tangible and intangible assets acquired.

The Company reviews goodwill for impairment annually or whenever changes in circumstances indicate that the carrying amount of goodwill* may**not* be recoverable. Based on the Company’s annual assessment as of* December 31, 2024*, the Company determined that its goodwill wasnot impaired.

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6. Stockholders’** Equity and Stock-Based Compensation**

Preferred Stock

The Company has authorized a total of 50,000,000 shares of preferred stock, par value $0.001 per share, none of which were outstanding at* December 31, 2024and2023*. The Company’s Board of Directors (the “Board”) has the authority to issue preferred stock and to determine the rights, preferences, privileges, and restrictions, including voting rights, without any further vote or action by the Company’s stockholders.

Common Stock

The Company has authorized a total of 500,000,000 shares of common stock, par value $0.001 per share.

2024 Rights Offering and Subscription Rights

On* March 28, 2024,the Company announced that its Board unanimously approved plans to initiate a rights offering, whereby the Company would distribute non-transferable subscription rights atno* charge to all holders of the Company's common stock, par value $0.001 per share (the "Common Stock"), as of the close of business on a record date to be determined. On* May 20, 2024,the Company announced that the Board had set May 31, 2024as the record date (the "Record Date"). All holders of Common Stock as of the Record Date received non-transferable subscription rights to purchase up to an aggregate ofsix million units (the"2024* Units") with an aggregate offering value of up to $60 million (the*"2024* Rights Offering") at a price per2024 Unit equal to the lesser of: (i) $10 (the "Initial Price") and (ii) the volume weighted average price of the Common Stock for theten trading day period through and including the expiration date,* June 26, 2024 (the "Expiration Date"), of the Rights Offering (the "Alternate Price"). Each subscription right entitled the holder to purchase 0.10864186 2024 Units for each share of Common Stock owned as of the Record Date. Each2024* Unit consisted ofone share of Common Stock andtwo warrants, each being a warrant to purchaseone-half ofone share of Common Stock. The subscription rights were to expire and haveno value if they werenot exercised prior to the Expiration Date. The Company determined that the equity-classified subscription rights represent a pro-rata distribution issued to existing stockholders as of the Record Date, which is based on a purchase price of $10 per2024 Unit as compared to (1) the price of $11.55 perone share of Common Stock on the Record Date, plus (2) the value of the warrants on the Record Date. The Company determined the fair value of the equity-classified subscription rights as of the Record Date, which involved the use of a Monte Carlo simulation model to value the underlying warrants. The Monte Carlo simulation model was based on certain significant unobservable inputs, such as a risk-free interest rate, stock price volatility, dividend yield, and expected term of the rights offering. The fair value of the equity-classified subscription rights was $47.7 million and was recorded in equity on the balance sheet as part of additional paid-in capital. The deemed pro-rata distribution to shareholders of $47.7 million was reflected as an offsetting reduction in additional paid-in capital. The Company is in an accumulated deficit position and has elected a policy of recognizing the deemed pro-rata distribution to shareholders as a reduction to additional paid-in capital rather than a further increase to its accumulated deficit.

On* July 3, 2024,the Company announced the closing of its2024* Rights Offering. The2024 Rights Offering resulted in the sale ofsix million 2024 Units, at a price of $10.00 per2024 Unit. Each2024 Unit consisted ofone share of the Company’s common stock, par value $0.001 per share, andtwo warrants, each being a warrant to purchaseone-half ofone share of common stock. The common stock and warrants comprising the2024 Units separated upon the closing of the2024 Rights Offering and were issued individually. A total of 5,999,998 shares of common stock and warrants to acquire up to approximately an additionalsix million shares of common stock were issued in the offering. The Company received aggregate gross proceeds from the2024 Rights Offering of $60 million. See2024 Rights Offering Warrants below for additional details of the warrants. Robert W. Duggan, the Company’s majority stockholder and Co-Chairman, purchased approximately 88% of the units offered through the2024 Rights Offering.

Private Placement Securities Purchase Agreement

On* April 30, 2023,the Company entered into a Securities Purchase Agreement with Robert W. Duggan, the Company’s majority stockholder and Co-Chairman, pursuant to which the Company agreed to issue and sell to Mr. Duggan 10,022,937 shares of the Company’s common stock, par value $0.001 per share, in a Private Placement, at a price per share of $6.51. The parties completed the Private Placement on May 9, 2023,after satisfying all pre-closing conditions, and the Company issued the full number of shares to Mr. Duggan. The shares were paid for through the cancellation of the principal sum of $65.0 million borrowed by the Company pursuant to the2022* Loan Agreement (See Note7), together with all accrued and unpaid interest outstanding owed at the time of closing.

2022 Rights Offering

On* June**9,* 2022, the Company completed a rights offering (the*"2022* Rights Offering") resulting in the sale of 7,317,072 units (the "Units"), at a price of $2.05 per Unit, with each Unit consisting ofone share of the Company’s common stock, par value $0.001 per share, andone warrant (the*"2022* Rights Offering Warrants") to purchaseone share of common stock at a price of $2.05 per share. The common stock and warrants comprising the Units separated upon the closing of the2022 Rights Offering and were issued individually.7,317,072 shares of common stock and warrants to acquire up to an additional 7,317,072 shares of common stock were issued in the2022 Rights Offering. The Company received aggregate gross proceeds from the2022 Rights Offering of $15 million. In* May 2023,the Company delivered an irrevocable notice of redemption to warrant holders and, on June 16, 2023,it redeemed the last of the outstanding2022* Rights Offering Warrants at a price of $0.01 per warrant share. See the2022 Rights Offering Warrants* section below for further details. Robert W. Duggan, the Company’s majority stockholder and Co-Chairman, purchased approximately 56% of the shares offered through the2022* Rights Offering.

Common Stock Warrants

2024 Rights Offering Warrants

In connection with the2024 Rights Offering, the Company issued2024 Rights Offering Warrants to purchase a total of 5,999,999 shares of its common stock at an exercise price of $11.00 per whole share, which equaled 110% of the subscription price for the Units. The aggregate number of shares of our common stock issuable upon the exercise of each set of warrants included in a given subscription for Units was rounded up to the nearest whole share. Warrants are exercisable immediately and will expire on thefifth anniversary of the closing of the2024 Rights Offering. Half of the warrants issued in the rights offering were redeemable for $0.01 per underlying share of common stock, onnot less thanthirty days’ written notice, if the VWAP of the Company’s common stock equaled or exceeded 150% of the exercise price for the warrants, or $16.50, fortwenty consecutive trading days. In* December 2024,the Company delivered an irrevocable notice of redemption to redeem thisfirst* tranche of common stock warrants because the VWAP of the Company's common stock over thetwenty consecutive trading days before the notice was $18.85. Accordingly, pursuant to the 150% redemption feature, we redeemed 18,221 warrants on the redemption date,* February**5,* 2025, andnone of these warrants are still outstanding. The other half of the warrants issued in the rights offering remain redeemable for $0.01 per underlying share of common stock, onnot less thanthirty days’ written notice, but only if the VWAP of the Company’s common stock equals or exceeds 200% of the exercise price for the warrants, or $22.00, fortwenty consecutive trading days. As of* December 31, 2024,there were 253,246 2024 Rights Offering Warrants outstanding which were subject to the 150% redemption feature and there were 1,245,237 2024 Rights Offering Warrants outstanding which were subject to the 200% redemption feature. As of December 31, 2024,we have received $49.4 million in gross proceeds from exercises of the2024* Rights Offering Warrants. Refer to Note13 for disclosure of gross proceeds received subsequent to* December 31, 2024.*

2022 Rights Offering Warrants

In connection with the2022 Rights Offering, the Company issued2022 Rights Offering Warrants to purchase a total of 7,317,072 shares of its common stock at an exercise price of $2.05. The2022 Rights Offering Warrants were subject to redemption by the Company for $0.01 per underlying share of common stock, onnot less than 30 days written notice, if the volume weighted average price of the Company’s common stock equals or exceeds 200% of the exercise price for the warrants, subject to adjustment, per share, for 20 consecutive trading days, provided that the Company* may**not* redeem the warrants prior to the date that isthree months after the issuance date. On* May 10, 2023,the Company issued a press release announcing that on May 9, 2023the terms for warrant redemption had been met. Pursuant to the redemption, the Company redeemed 66,175 warrants on the redemption date, June 16, 2023.Prior to the redemption date, warrants to purchase 7,250,897 shares were exercised, generating approximately $14.9 million of total gross proceeds to the Company. As of December 31, 2024*, there wereno 2022 Rights Offering Warrants outstanding.

A summary of total warrants activity for the year ended* December 31, 2024* is presented below:

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Equity Plans* *

2017 Equity Incentive Plan and2017 Inducement Equity Incentive Plan**

The Board of Directors of the Company (the "Board") previously adopted, and the Company’s stockholders approved, the Company’s2017 Equity Incentive Plan (the*"2017* Plan").

The2017 Plan has a 10-year term, and provides for the grant of stock options, stock appreciation rights, restricted stock, RSUs, performance units, and performance shares to employees, directors and consultants of the Company and any parent or subsidiary of the Company, as the Compensation Committee of the Board* maydetermine. Subject to an annual evergreen increase and adjustment in the case of certain capitalization events, the Company initially reserved 1,500,000 shares of the Company’s common stock for issuance pursuant to awards under the2017* Plan. In addition, shares remaining available under the Company’s2015 Equity Incentive Plan, as amended (the*“2015* Plan”), and shares reserved butnot issued pursuant to outstanding equity awards that expire or terminate without being exercised or that are forfeited or repurchased by the Company will be added to the shares of common stock available for issuance under the2017 Plan. The2017 Plan is administered by the Board’s Compensation Committee. Effective at both* January 1, 2024and2023,* the number of shares of common stock available under the2017 Plan increased by 1,200,000, respectively, pursuant to the evergreen provision of the2017 Plan. Under the evergreen provision of the2017 Plan, the share increase is determined based on the least of (i)1,200,000 shares, (ii)4% of the Company’s common stock outstanding at* December 31of the immediately preceding year, or (iii) such number of shares as determined by the Board. Additionally, in December 2023,the number of shares of common stock available under the2017* Plan increased by 1,375,000 shares as a result of a stockholder vote held at a special meeting of stockholders. As of* December 31, 2024*,77,490 shares of common stock remained available for issuance under the2017 Plan.

During* November 2017,the Board of the Company adopted the2017* Inducement Equity Incentive Plan (the “Inducement Plan”) and reserved 1,000,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Plan. The Inducement Plan was adopted without stockholder approval.

The Inducement Plan has a 10-year term and provides for the grant of equity-based awards, including non-statutory stock options, RSUs, restricted stock, stock appreciation rights, performance shares and performance units, and its terms are substantially similar to the2017 Plan, including with respect to treatment of equity awards in the event of a “merger” or “change in control” as defined under the Inducement Plan. Options issued under the Inducement Plan* mayhave a term up toten years and have variable vesting provisions. New hire grants generally vest 25% per year starting upon thefirst anniversary of the grant. Equity-based awards issued under the Inducement Plan are only issuable to individualsnot* previously engaged as employees or non-employee directors of the Company prior to the Inducement Plan’s adoption date. In* May 2021,the Board approved an amendment to the Inducement Plan to reserve an additional 1,000,000 shares of the Company’s common stock for issuance pursuant to the Inducement Plan. And, in March 2024,the Board approved asecond* amendment to the Inducement Plan to reserve an additional 2,000,000 shares of the Company’s common stock for issuance pursuant to the Inducement Plan. As of* December 31, 2024*,2,941,626 shares of common stock were available for issuance under the Inducement Plan.

A summary of stock option activity under the2015 Plan,2017 Plan and Inducement Plan for the year ended* December 31, 2024* is presented below:

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Time-based Options

The Company awards time-based options which vest and become exercisable, subject to the individual’s continued employment or service through the applicable vesting date. Time-based options can have various vesting schedules, most commonly new hire grants which generally vest 25% per year starting upon thefirst anniversary of the grant.

A summary of the time-based stock option activity under the2015 Plan,2017 Plan and Inducement Plan for the year ended* December 31, 2024* is presented below:

The intrinsic value of time-based options exercised during the years ended* December 31, 2024and2023* was $1.9 million and $0.9 million, respectively.

The fair value of the time-based options granted to employees and directors during the years ended* December 31, 2024and2023* was $18.7 million and $9.0 million, respectively.

Time-based Modifications

In* October 2024,the Board approved changes to the performance-based vesting conditions of certain unvested outstanding common stock option awards that were improbable of vesting. Specifically,600,113 performance-based stock option awards were modified to time-based vesting criteria. The modified time-based awards will vest and become exercisable, subject to the individual’s continued employment or service through the applicable vesting date, based upon individually specific vesting schedules with annual vesting milestones. The vesting schedules have a range fromtwo tofour years. The fair value of the time-based modification awards at the modification date was $8.8 million. As a result of this modification, the Company recognized an additional $2.9 million of stock-based compensation expense during the year ended December 31, 2024.*

Performance Options

Certain stock options awarded to the Company’s executives and other employees contain performance conditions related to certain financial measures and achievements of strategic and operational milestones. The options will vest and become exercisable once the specific performance condition is fulfilled. In* October 2024,*the Board approved changes to the performance-based vesting conditions of certain unvested outstanding common stock option awards that were improbable of vesting. Specifically, certain performance-based stock option awards were changed to time-based vesting criteria and certain performance-based stock option awards were changed to market-based vesting criteria.

A summary of the performance option activity under the2017 Plan and Inducement Plan for the year ended* December 31, 2024* is presented below:

The fair value of the performance options granted to employees during the years ended* December 31, 2024and2023* was$0.3 million and $2.0 million, respectively.

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The Company estimates the fair value of time-based and performance-based stock options on the grant date and modification date using the Black-Scholes option pricing model. The estimated fair value of these employee stock options is amortized on a straight-line basis over the requisite service period of the awards. The Company reviews, and when deemed appropriate, updates the assumptions used on a periodic basis. The fair value of time-based and performance-based stock options was estimated using the following weighted-average assumptions:

Market-based Options

Certain stock options awarded by the Company contain market conditions related to achievement of certain market capitalization targets. The options will vest and become exercisable once the specific market capitalization target is fulfilled.

A summary of the market-based option activity under the2017 Plan for the year ended* December 31, 2024* is presented below:

The fair value of the market-based options granted to employees during the years ended* December 31, 2024and2023* was $5.3 million and $10.5 million, respectively.

Market-based Modifications

In* October 2024,the Board approved changes to the performance-based vesting conditions of certain unvested outstanding common stock option awards that were improbable of vesting. Specifically,206,389 performance-based stock option awards were modified to market-based vesting criteria. The modified market-based awards will vest and become exercisable, subject to the individual’s continued employment and service through the applicable vesting date, based upon the achievement of certain market capitalization targets. The fair value of these market-based modification awards at the modification date was $2.8 million. Additionally, in October 2024,the Board approved a modification to certain market-based awards to adopt a uniform methodology for calculating its market capitalization whereas they aligned all awards to use consecutive calendar days andnot* consecutive trading days in the calculation. As a result of this modification, incremental value of $0.4 million will be recognized over the remaining derived service period.

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The Company estimates the fair value of market-based stock options on the grant date and modification date using a Monte Carlo simulation model. The estimated fair value of these employee stock options is amortized over the requisite service period for each tranche of the awards. The requisite service period is the service period derived from the Monte Carlo simulation model. If the market capitalization targets are met sooner than the derived service period, the Company will accelerate the recognition of stock-based compensation expense to reflect the cumulative expense associated with the vested shares. The fair value of market-based stock options was estimated using the following weighted-average assumptions:

2017 Employee Stock Purchase Plan

The Board previously adopted and the stockholders approved the Company’s2017 Employee Stock Purchase Plan (the*"2017* ESPP").

The2017 ESPP is a broad-based plan that provides employees of the Company and its designated affiliates with the opportunity to become stockholders through periodic payroll deductions that are applied towards the purchase of Company common shares at a discount from the then-current market price. Subject to adjustment in the case of certain capitalization events, a total of 250,000 common shares of the Company were available for purchase at adoption of the2017 ESPP. Pursuant to the2017 ESPP, the annual share increase pursuant to the evergreen provision is determined based on the least of (i)450,000 shares, (ii)1.5% of the Company’s common stock outstanding at* December 31of the immediately preceding year, or (iii) such number of shares as determined by the Board. In2024,* the Company reserved an additional 450,000 shares under the2017 ESPP pursuant to the evergreen provision. In2023, the Board waived the evergreen provision andno additional shares were reserved under the2017 ESPP. During the years ended* December 31, 2024and2023*, the Company issued 117,539 and 347,681 shares of common stock under the2017 ESPP, respectively. As of* December 31, 2024*,445,779 shares of common stock remained available for issuance under the2017 ESPP.

The Company estimates the fair value of ESPP grants on their grant date using the Black-Scholes option pricing model. The estimated fair value of ESPP grants is amortized on a straight-line basis over the requisite service period of the grants. The Company reviews, and when deemed appropriate, updates the assumptions used on a periodic basis. The Company utilizes its estimated volatility in the Black-Scholes option pricing model to determine the fair value of ESPP grants. The fair value of ESPP grants was estimated using the following weighted-average assumptions:

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Stock-based Compensation

In* October 2024,the Board approved changes to the performance-based vesting conditions of certain unvested outstanding common stock option awards that were improbable of vesting. Specifically, certain performance-based stock option awards were modified to time-based vesting criteria and certain performance-based stock option awards were modified to market-based vesting criteria. This modification resulted in approximately $3.2 million of additional stock-based compensation expense for the year ended December 31, 2024*.

Total stock-based compensation expense recorded in the consolidated statements of operations and comprehensive loss was as follows (in thousands):

As of* December 31, 2024*,not all of the performance conditions of the performance options are probable to be achieved. Compensation expense has only been recognized for those conditions that are assumed to be probable.

Total stock-based compensation expense by award type was as follows (in thousands):

Total time-based stock-based compensation expense for the year ended* December 31, 2024*, includes $2.9 million of additional expense due to the modification of certain performance-based stock option awards to time-based stock option awards, and $0.7 million of additional expense, net of forfeiture of unvested options that were previously expensed for $0.6 million, due to the modification of a certain award whereby there was a partial acceleration of vesting upon the departure of the Company's former Chief Executive Officer.

At* December 31, 2024*, there was $34.8 million of unrecognized compensation cost related to unvested stock-based compensation arrangements, which is expected to be recognized over a weighted average period of 2.85 years.

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7. Commitments and Contingencies

2022 Loan Agreement

On* September20,* 2022, the Company and Robert W. Duggan, the Company's majority stockholder and Co-Chairman, entered into a Loan Agreement ("2022 Loan Agreement") in connection with Mr. Duggan lending the principal sum of $65.0 million to the Company. The2022 Loan Agreement bore interest at a rate per annum equal to 5.0%, payable quarterly commencing on* January1,* 2023, with the principal sum payable on* March 20, 2024.On March 17, 2023,the Company and Mr. Duggan amended certain terms of the2022* Loan Agreement. There wereno changes to the interest rate, but the principal sum repayment date was changed to* September 30, 2024.During the year ended December 31, 2023,the Company made cash payments of $1.7 million for accrued interest on the loan, and recorded an additional $1.1 million of interest expense in relation to the2022* Loan Agreement. On* April 30, 2023,the Company entered into a Securities Purchase Agreement with Mr. Duggan, pursuant to which the Company agreed to issue and sell to Mr. Duggan 10,022,937 shares of the Company’s common stock, par value $0.001 per share, in a Private Placement, at a price per share of $6.51. These shares were paid for through the cancellation of the amounts then owed by the Company under the2022* Loan Agreement, the principal sum of $65.0 million and all accrued and unpaid interest outstanding, which totaled approximately $0.2 million as of* April 30, 2023.The parties completed the Private Placement on May 9, 2023and, upon closing and satisfaction of the outstanding debt, the2022* Loan Agreement terminated, without early termination fees or penalties being owed by the Company. There wereno additional amounts are owed to Mr. Duggan under the2022 Loan Agreement at* December 31, 2024and2023*.

Operating Leases

Hayward Lease

In* January 2017,the Company entered into afive-year lease (the "Existing Lease") for approximately 15,700 square feet for its principal operating facility located in Hayward, California. The lease commenced during July 2017.In May 2019,the Company entered into Lease Amendment1* (the "Lease Amendment") in relation to the Existing Lease and added the lease of new premises of approximately 13,300 square feet and 21,300 square feet, (“Expansion Premises1” and “Expansion Premises2,” respectively). Additionally, the term of the Existing Lease was extended to* October 2029to be coterminous with Expansion Premises1* and Expansion Premises2. The Company evaluated the lease amendment under the provisions of ASC842. It concluded that the Lease Amendment would be accounted for as a single contract with the Existing Lease because the additional lease payments due to the Lease Amendment wasnot commensurate with the right-of-use ("ROU") asset granted to the Company. Though the Lease Amendment was accounted for as a single contract, the Existing Premises, Expansion Premises1 (occupied in* November 2019)and Expansion Premises2* (occupied in* May 2020)*are accounted for as separate lease components. Accordingly, the Company measured and allocated consideration to each lease component as of the modification date.

Miami Lease

In* November 2024,the Company entered into a 65-month lease for approximately 2,000 square feet for its corporate headquarters located in Miami, Florida, which commenced on November 8, 2024.The lease containsone five-year extension option, however, as of the lease commencement date, the Company has determined that it isnot* reasonably certain to exercise the option to extend the lease and hasnot included the extension period in the lease term. The monthly lease payment is approximately $0.02 million with annual escalation of approximately 3%. Variable lease costs are comprised primarily of the Company's proportionate share of operating expenses, property taxes, and insurance. Operating lease ROU assets and liabilities on our balance sheet are based on the net present value of the remaining lease payments over the remaining lease term. As the lease didnot provide an implicit rate, the Company used its incremental borrowing rate based on the information available in determining the present value of lease payments. The Company’s incremental borrowing rate of 8% was based on the term of the lease, the economic environment of the lease, and reflects the rate the Company would have had to pay to borrow on a secured basis. The Company recorded a ROU asset and lease liability upon lease commencement in the amount of $0.8 million.

During the years ended* December 31, 2024and2023*, total rent expense, including common area maintenance charges, was $2.5 million and $2.3 million, respectively. The variable portion of the lease costs included in the totals were immaterial for the years ended* December 31, 2024and2023*.

Supplemental balance sheet information related to leases (in thousands):

Total cash paid for operating lease liabilities (in thousands):

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Maturities of total operating lease liabilities were as follows (in thousands):

Weighted-average remaining lease term and discount rate for both the Hayward Lease and Miami Lease, as of* December**31,* 2024, were as follows:

Legal Proceedings

From time to time, we* maybe involved in various legal proceedings arising in the ordinary course of business. Having resolved our earlier dispute with our former Chief Financial Officer, we arenot* presently a party to any legal proceedings that, in the opinion of management, could have a material adverse effect on our results of operations or financial condition. Regardless of outcome, however, any litigation could have an adverse impact on us because of defense and settlement costs, diversion of management resources, negative publicity, reputational harm, and other factors.

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8. Income Taxes

Income (loss) before income taxes (in thousands):

The Company hasnot recorded any income tax expenses in the Consolidated Statements of Operations and Comprehensive Loss for the years ended* December 31, 2024and2023*.

The provision for income taxes differs from the amount estimated by applying the statutory federal income tax rate to income (loss) before taxes as follows:

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Deferred income taxes reflect the impact of carryforwards and temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. The carryforwards and temporary differences, which give rise to a significant portion of the Company’s deferred tax asset (liability) as of* December 31, 2024and2023*, are as follows (in thousands):

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The Company’s unrecognized tax benefits as of* December 31, 2024and2023* were $17.4 million and $10.2 million, respectively. If recognized, none of the unrecognized tax benefits would impact income tax expense to the extent that the Company continues to maintain a full valuation allowance against its deferred tax assets.

A reconciliation of the beginning and ending amounts of unrecognized tax benefit is as follows (in thousands):

The Company’s policy is to recognize interest and penalties related to income taxes as components of interest expense and other expense, respectively. The Company didnot accrue interest and penalties related to unrecognized tax benefits as of* December 31, 2024* and doesnot anticipate any significant change withintwelve months of this reporting date.

The Company’s valuation allowance increased by $11.7 million in the year ended* December 31, 2024* and increased by $8.1 million in the year ended* December 31, 2023*.

As of* December 31, 2024*, the Company had federal and state net operating loss (“NOL”) carryforwards of $250.0 million and $274.3 million, respectively, which begin to expire in2034. Of the total federal NOL carryforward of $250.0 million, approximately $224.4 million is carried forward indefinitely but is limited to80% of the taxable income.

As of* December 31, 2024*, the Company had approximately $9.5 million and $9.3 million of U.S. federal and California research and development (“R&D”) credits, respectively. The federal R&D credits begin to expire in2035 and the California R&D credits have an indefinite carryforward period.

The Company is subject to taxation in the United States for Federal and for State, within various states in which the Company operates. All jurisdictions and tax years currently remain open for IRS and state taxing authorities’ examination. As of* December 31, 2024*, the Company wasnot under examination by the Internal Revenue Service or any state tax jurisdiction.

Internal Revenue Code Section382 ownership change generally occurs ifone or more stockholders or groups of stockholders who own at least5% of our stock increase their ownership by more than50 percentage points over their lowest ownership percentage within a rollingthree-year period. Similar rules* mayapply under state tax laws. We believe that we have hadone* or more ownership changes prior to2018, but recently performed a Section382 study to analyze fiscal years2018 through2024, and we donot believe that we have had any additional ownership changes over that period. Possible future changes in our stock ownership could result in limitations.

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9. Segment Reporting

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker (the "CODM"), in deciding how to allocate resources and assess performance. The Company hasone operating and reportable segment relating to the research and development of the Company’s NPS technology. The CODM views the Company’s operations and manages its business inone operating segment. The CODM uses the Company’s consolidated net loss to monitor actual results as compared to the budget in assessing segment performance and allocation of resources. Managing and allocating resources on an entity-wide basis enables the CODM to assess the overall level of resources available and how to best deploy these resources across functions and research and development projects that are in line with the Company’s long-term company-wide strategic goals. Consistent with this decision-making process, the CODM uses financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources, and setting incentive targets. Operating expenses are used to monitor budget versus actual results. The CODM is regularly provided with more detailed expense information than what is included in our Consolidated Statement of Operations and Comprehensive Loss. Throughout2024, the CODM of the Company changed multiple times, however the financial information that was reviewed by each of the CODMs didnot change throughout the year. The table below shows a reconciliation of the Company’s net loss, including the significant expense categories regularly provided to and reviewed by the CODM, as computed under U.S. GAAP to the Company’s total net loss in the statements of operations (in thousands).

1 Cross platform research and engineering includes compensation costs, fees paid to consultants and outside service providers and organizations, prototype spending and other expenses relating to the acquisition, design and development of the Company’s clinical stage devices.

2 Manufacturing includes compensation costs, fees paid to consultants and outside service providers and organizations, and costs associated with the procurement of materials and the manufacturing of the Company’s clinical stage devices.

3 Clinical and regulatory includes compensation costs, fees paid to consultants and outside service providers and organizations, and costs associated with clinical trials and regulatory approvals required for the development of the Company’s clinical stage devices.

4 Adjusted general and administrative includes compensation costs and fees paid to consultants and outside service providers and organizations in support of the administrative functions of the Company, including finance, legal and human resources.

5 Sales and marketing includes compensation costs, fees paid to consultants and outside service providers and organizations, costs associated with marketing and sales strategy as well as execution of marketing and sales initiatives for the Company's products.

6 Other segment items includes stock-based compensation, depreciation and amortization, and facilities and IT costs allocations.

As of* December 31, 2024and2023,* all of the Company’s long-lived assets are located in the United States.

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10. Related Party Transactions

In* May 2022,the Company determinednot* to renew its annual director and officer liability insurance policy due to disproportionately high premiums quoted by insurance companies. Instead, on* May 31, 2022,the Company and Robert W. Duggan, majority stockholder and Co-Chairman, entered into a letter agreement (the "Letter Agreement") pursuant to which Mr. Duggan agreed with the Company to personally provide indemnity coverage for aone-year period, and he agreed to deposit cash and/or marketable securities into athird*-party escrow, as security for these obligations, if requested by the Company. On* May 31, 2023,the last day of theone*-year period, the Company paid Mr. Duggan a fee of $1.0 million in consideration of the obligations set forth in the Letter Agreement. As of* December 31, 2024*, there wereno additional amounts owed to Mr. Duggan under the Letter Agreement.

On* June**9,* 2022, the Company completed the2022 Rights Offering resulting in the sale of 7,317,072 Units, at a price of $2.05 per Unit, with each Unit consisting ofone share of the Company’s common stock, par value $0.001 per share, andone 2022 Rights Offering Warrant to purchaseone share of common stock at a price of$2.05 per share. Robert W. Duggan, the Company’s majority stockholder and Co-Chairman, purchased approximately 56% of the shares offered through the2022 Rights Offering. See Note6 for further details.

On* September**20,* 2022, the Company and Robert W. Duggan, the Company's majority stockholder and Co-Chairman, entered into the2022 Loan Agreement in connection with Mr. Duggan lending the principal sum of $65.0 million to the Company. On* April 30, 2023,the Company entered into a Securities Purchase Agreement with Mr. Duggan, pursuant to which the Company agreed to issue and sell to Mr. Duggan 10,022,937 shares of the Company’s common stock, par value $0.001 per share, in a Private Placement, at a price per share of $6.51. These shares were paid for through the cancellation of the amounts then owed by the Company under the2022* Loan Agreement, the principal sum of $65.0 million and all accrued and unpaid interest outstanding, which totaled approximately $0.2 million as of* April 30, 2023.Upon closing of the Private Placement and satisfaction of the outstanding debt, the2022* Loan Agreement terminated, without early termination fees or penalties being owed by the Company.No additional amounts are owed to Mr. Duggan under the2022 Loan Agreement. See Note7 for further details.

On* July 3, 2024,the Company announced the closing of its2024* Rights Offering. The2024 Rights Offering resulted in the sale ofsix million 2024 Units, at a price of $10.00 per2024 Unit. Each2024 Unit consisted ofone share of the Company’s common stock, par value $0.001 per share, andtwo warrants, each being a warrant to purchaseone-half ofone share of common stock. The common stock and warrants comprising the2024 Units separated upon the closing of the2024 Rights Offering and were issued individually. A total of 5,999,998 shares of common stock and warrants to acquire up to approximately an additionalsix million shares of common stock were issued in the offering. The Company received aggregate gross proceeds from the2024 Rights Offering of $60 million. Robert W. Duggan, the Company’s majority stockholder and Co-Chairman, purchased approximately 88% of the units offered through the2024 Rights Offering. See Note6 for further details.

11. Restructuring Charges

In* February 2023,the Company eliminated seven positions and incurred a discrete restructuring related charge of $0.1 million which was fully recorded in February 2023and the related expenses are included within total cost and expenses on the condensed consolidated statement of operations for the year ended December 31, 2023.This charge represents the total amount incurred in connection with the activity. The Company didnot incur any restructuring related charges in the year ended December 31, 2024.*

12. Employee Benefit Plans

The Company sponsors a defined contribution plan under which it* maymake discretionary contributions. The Company didnot make any employer matching contributions to this plan during the years ended December 31, 2024and2023*

13. Subsequent Events

2024 Rights Offering Warrants

Half of the warrants issued in the Company’s2024 Rights Offering were redeemable for $0.01 per underlying share of common stock, onnot less than thirty days’ written notice, if the VWAP of the Company’s common stock equaled or exceeded 150% of the exercise price for the warrants, or $16.50, fortwenty consecutive trading days. In* December 2024,the Company delivered an irrevocable notice of redemption to redeem the2024* Rights Offering Warrants which were subject to this 150% redemption feature, because the VWAP of the Company’s common stock over thetwenty consecutive trading days before the notice was $18.85. Pursuant to the 150% redemption feature, the Company redeemed 18,221 warrants on the redemption date,* February**5,* 2025, and at the date of this filing, there areno 2024 Rights Offering Warrants subject to the 150% redemption feature outstanding. Subsequent to* December 31, 2024,but prior to the redemption date of February 5, 2025,the Company received approximately $2.6 million in gross proceeds from exercises of the 150% redemption feature2024* Rights Offering Warrants.

The other half of the warrants issued in the2024 Rights Offering remain redeemable by the Company for $0.01 per underlying share of common stock, onnot less than thirty days’ written notice, if the VWAP of the Company’s common stock equals or exceeds 200% of the exercise price for the warrants, or $22.00, fortwenty consecutive trading days. Although the 200% redemption feature of the2024 Rights Offering Warrants hasnot yet been triggered, since* December 31, 2024,the Company has received approximately $11.4 million in gross proceeds from exercises of warrants subject to the 200% redemption feature. If exercised, an additional $2.3 million of gross proceeds maybe received if the remaining outstanding2024* Rights Offering Warrants subject to the 200% redemption feature are exercised.

As of* January 2, 2025,Robert W. Duggan, the Company’s majority stockholder and Co-Chairman, has exercised all of his outstanding2024* Rights Offering Warrants. He haszero 150% redemption feature andzero 200% redemption feature warrants outstanding as of the date of this filing.

Executive Appointments

In* January 2025,the Company appointed Paul A. LaViolette, the Company's Co-Chairman, as Chief Executive Officer and President of the Company. In connection with his appointment, the Company awarded Mr. LaViolette stock options to purchase up to 1,500,000 shares of the Company’s common stock, with an exercise price of $18.43 per share, the closing price of the Company’s common stock on January 8, 2025,*the last trading day preceding Mr. LaViolette’s employment start date and date of grant. Subject to certain accelerated vesting provisions,450,000 option shares will vest over four years, subject to a time-based vesting schedule, and 1,050,000 option shares will vest subject to both market and performance conditions related to achievement of certain market capitalization and revenue and gross margin targets. The options will vest and become exercisable once the specific targets are fulfilled.

In* February**2025,* the Company appointed Jon Skinner as Chief Financial Officer of the Company. In connection with his appointment, the Company awarded Mr. Skinner stock options to purchase up to 300,000 shares of the Company’s common stock, with an exercise price of $20.93 per share, the closing price of the Company’s common stock on* January 31, 2025,*the last trading day preceding Mr. Skinner’s employment start date and date of grant. Subject to certain accelerated vesting provisions,150,000 option shares will vest over four years, subject to a time-based vesting schedule, and 150,000 option shares will vest subject to both market and performance conditions related to achievement of certain market capitalization and revenue targets. The options will vest and become exercisable once the specific targets are fulfilled.