Ceribell, Inc.

The Company

Organization and Business

CeriBell, Inc. (the “Company” or “Ceribell”) was incorporated in the state of Delaware as Brain Stethoscope, Inc., on August 29, 2014, and changed its name to CeriBell, Inc. on August 11, 2015, and maintains its principal office in Sunnyvale, California. The Company is a commercial-stage medical technology company focused on transforming the diagnosis and management of patients with serious neurological conditions.

The Company has developed the Ceribell System, a novel, point-of-care electroencephalography (“EEG”) platform specifically designed to address the unmet needs of patients in the acute care setting. By combining proprietary, highly portable and rapidly deployable hardware with sophisticated artificial intelligence (“AI”)-powered algorithms, the Ceribell System enables rapid diagnosis and continuous monitoring of patients with neurological conditions.

Liquidity

As of September 30, 2026, the Company’s principal sources of liquidity consisted of$117.5 million of cash, cash equivalents, and marketable securities.

The Company has incurred operating losses and negative cash flows from operations since its inception. On September 30, 2026, the Company had an accumulated deficit of$280.7 million. Such losses primarily resulted from the costs incurred in the development and sales and marketing of the Company’s products and building the Company’s organization. The Company expects to incur losses in the near term as it continues to focus on the development and promotion of new and existing products and expand its corporate infrastructure, including the costs associated with being a public company.

Based on the Company’s current operating plan, the Company believes that its existing cash and cash equivalents and marketable securities will be sufficient to fund the Company’s planned operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of these financial statements.

However, the Company may experience lower than expected cash generated from operating activities or greater than expected capital expenditures, cost of revenue, or operating expenses, and may need to raise additional capital to fund operations, further research and development activities, or acquire, invest in, or license other businesses, assets, or technologies. The Company’s future capital needs will depend upon many factors, including the market acceptance of the Company’s products, the cost and pace of developing new products, and the costs of supporting sales growth.

Risks and Uncertainties

The Company is subject to risks common to companies in the medical device industry, including, but not limited to, new technological innovations, dependence upon third-party payers to provide adequate coverage and reimbursement, dependence on key personnel, dependence on key suppliers, protection of proprietary technology, product liability, and compliance with government regulations. There can be no assurance that the Company’s products or services will be accepted in the marketplace, nor can there be any assurance that any future products or services can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products or services will be successfully marketed, if at all. These factors could have a material adverse effect on the Company’s future financial results, financial position, and cash flow.

In addition, inflationary and supply chain pressures may adversely impact the Company’s future financial results. The Company’s operating costs have increased and may continue to increase because of these pressures, and the Company may not be able to fully offset these cost increases by raising prices for products or subscription fees, which could result in downward pressure on margins.

Adverse economic conditions in the U.S., including any economic disruptions related to another or worsening global pandemic or a recession, could negatively impact the Company’s revenues and results of operations. The global credit and financial markets continue to experience volatility and disruptions, including diminished liquidity and credit availability, increased concerns about inflation, and uncertainty about economic stability. Events including a potential recession have caused economic, market, and political uncertainty. Volatility and disruption of financial markets could limit the Company’s customers’ ability to obtain adequate financing or credit to purchase and pay for products in a timely manner or to maintain operations, which could result in a decrease in sales volume that could harm the Company’s results of operations. General concerns about the fundamental soundness of the U.S. economy may also cause customers to reduce their purchases. Changes in governmental banking, monetary, and fiscal policies to address liquidity and increase credit availability may not be effective. Continuation or further deterioration of these financial and macroeconomic conditions could harm the Company’s sales, profitability, and results of operations.

The Company utilizes contract manufacturers in China and Vietnam to supply key sub-assemblies for its primary products. In addition, political instability or the deterioration of trade relations between the United States and either of these countries could adversely impact the Company’s business.

To minimize supply chain disruptions, the Company continues to maintain sufficient supplies of inventory of manufactured components and parts needed to meet forecast production demand.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and pursuant to the rules and regulations of the SEC.

The unaudited interim condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to a fair statement of the Company’s financial position as of September 30, 2026, and the results of its operations for the three and nine months ended September 30, 2026 and 2025 and cash flows for the nine months ended September 30, 2026 and 2025. The condensed balance sheet at December 31, 2025, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

Accounting Policies, Significant Judgments, and Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates and assumptions, and such differences could be material to the Company’s financial position and results of operations. Significant estimates and assumptions include, but are not limited to, revenue recognition and valuation of the Company’s options to purchase common stock for purposes of accounting for stock-based compensation.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are invested in checking accounts and money market funds. The Company has not experienced any losses to date.

The Company’s accounts receivable are derived solely from product and subscription sales to customers located in the United States. The Company performs periodic evaluations of its customers’ financial condition and generally requires no collateral from its customers. Credit losses historically have not been significant. No customers comprised 10% or more of the Company’s revenue for the three and nine months ended September 30, 2026 and 2025. No customers comprised 10% or more of the Company’s accounts receivable balance as of September 30, 2026, or December 31, 2025.

Bank failures, events involving limited liquidity, defaults, non-performance, or other adverse developments that affect financial institutions, or concerns or rumors about such events, may lead to liquidity constraints. The failure of a bank, or other adverse conditions in the financial or credit markets impacting financial institutions at which the Company maintains balances, could adversely impact liquidity and financial performance. There can be no assurance that the Company’s deposits in excess of the Federal Deposit Insurance Corporation (“FDIC”) or other comparable insurance limits will be backstopped by the U.S. or applicable foreign governments, or that any bank or financial institution with which the Company does business will be able to obtain needed liquidity from other banks, government institutions, or by acquisition in the event of a failure or liquidity crisis. The Company’s cash and cash equivalents are primarily held in money market funds.

Information About Segment and Geographic Areas

The Company operates and manages its business asone reportable and operating segment. The Company generates revenue from two recurring sources. Product revenue is generated by the sale of the Company’s disposable headbands and headcaps (“Wearables”) that are intended for single patient use. Subscription revenue is generated by monthly subscription fees charged to the Company’s hospital customers for use of Clarity, recorders, and its portal. The Company has one reportable segment due to the similar customer base of its products and subscriptions and similarities in: economic characteristics; nature and compatibility of products and subscriptions; and procurement, manufacturing and distribution processes.

In accordance with the “Segment Reporting” Topic of the Accounting Standards Codification (“ASC”), the Company’s Chief Executive Officer is the Chief Operating Decision Maker (“CODM”). The Company’s measure of segment profit or loss is loss from operations. The CODM utilizes the Company’s financial information such as loss from operations derived from revenues and operating expenses included in the Company forecast, performance metrics, and budget versus actual analyses on an aggregate basis for purposes of evaluating financial performance and how to best allocate resources across functions when developing and reviewing the annual budget to achieve the Company’s long-term objectives. Significant expenses regularly provided to the CODM within loss from operations include cost of revenue, research and development, sales and marketing, and general and administrative expenses, which are each separately presented on the Company’s Statements of Operations and Comprehensive Loss. The measure of segment assets is reported on the Balance Sheets as total assets. Since the Company operates in one segment, all accounting policies and financial information required by “Segment Reporting” can be found in the summary of significant accounting policies, the revenue footnote, and the annual financial statements. All of the Company’s revenue was in the United States for the three and nine months ended September 30, 2026 and 2025. Long-lived assets held outside of the United States were $0.9 millionas of both September 30, 2026 and December 31, 2025.

License Agreement

The Company has an in-license arrangement with Stanford University whereby the Company owes low-single digit royalty percentages related to revenue that is derived pursuant to in-licensed technologies, subject to a minimum payment. Royalty obligations are expensed as cost of revenue in the statements of operations and comprehensive loss, when incurred or over the minimum royalty periods and have not been material. On June 12, 2025, the Company extended the exclusivity of the licensed patents to the date the last licensed patent expires in May 2036 for a term exercise fee of $250,000. As the in-licensed technologies are used to generate revenue, the exercise fee has been deferred in other assets and will be amortized to cost of revenue on a straight-line basis through May 2036.

International Emergency Economic Powers Act (“IEEPA”) Tariffs

On February 20, 2026, a U.S. Supreme Court ruling invalidated tariffs imposed under the IEEPA. The Company estimates it has paid approximately $1.6 million under the IEEPA tariffs. On April 20, 2026, the U.S. Customs and Border Protection (“CBP”) launched an online portal referred to as the Consolidated Administration and Processing of Entries (“CAPE”) that can be used to submit IEEPA tariff refund requests. All requests are reviewed by the CBP to determine validity prior to the issuance of refunds.

During the three months ended June 30, 2026, the Company recognized refunds of $1.6 million under the requirements of ASC 450, Contingencies. Of this refund amount, $1.0 million was recognized as a reduction of cost of goods sold for product that had been sold and the remaining $0.6 million related to inventory on hand as of June 30, 2026.

Related Party Transactions

The Company paid Dr. Parvizi, a Director and Co-Founder of the Company, for consulting services and reimbursement of related expenses and recorded such amounts as general and administrative expenses within the statements of operations and comprehensive loss. Expenses related to Dr. Parvizi were $51,000 and$49,000 for thethree months ended September 30, 2026 and 2025, respectively, and $148,000 and $146,000 for thenine months ended September 30, 2026 and 2025, respectively.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03 Disaggregation of Income Statement Expenses. The amendment requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact this ASU will have on the Company’s disclosures.

Revenue

Disaggregation of Revenue

The following table provides information about disaggregated revenue from contracts with customers by the nature of products and services provided (in thousands):

Currently, the Company’s customers are solely in the United States.

Contract Costs

The Company capitalizes sales commissions that are considered to be incremental to the acquisition of customer contracts and amortizes them over an estimated period of benefit. To determine the period of benefit of its deferred commissions, the Company evaluates the type of commissions, the nature of the related benefit, and the specific facts and circumstances of its arrangements. The Company determines the period of benefit for commissions paid for the acquisition of the initial subscription contract by taking into consideration its average customer life, which is generally assumed to be three years. The Company evaluates these assumptions at least annually and periodically reviews whether events or changes in circumstances have occurred that could impact the period of benefit.

The Company has elected to utilize the practical expedient to expense sales commissions with an amortization period of less than one year and capitalize sales commissions that are considered to be incremental costs of obtaining contracts with an amortization period greater than one year.

The following table provides the breakdown of capitalized contract costs (in thousands):

Contract Liabilities and Performance Obligations

Contract liabilities consist of up-front payments received from customers primarily for the Clarity subscriptions.

The following table provides the breakdown of contract liabilities (in thousands):

The Company has elected not to include unfulfilled performance obligations for contracts in which the amount of revenue it recognizes is equal to the amount which the Company has a right to invoice. No revenue was recognized in the reporting period from performance obligations satisfied in previous periods. The short-term remaining performance obligations are expected to be recognized within 12 months.

Fair Value Measurements

In determining the fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessments of fair value.

Fair Value of Assets and Liabilities

The following tables represent the Company’s financial assets and liabilities according to the fair value hierarchy, measured at fair value (in thousands):

The carrying amount of the Company’s notes payable is carried at amortized cost and approximates its fair value.

The fair value and amortized cost of Level 1 and 2 available-for-sale marketable securities as of September 30, 2026 and December 31, 2025 are presented in the following table (in thousands):

The fair value of available-for-sale marketable securities by contractual maturities as of September 30, 2026 are presented in the following table (in thousands):

Cash equivalents are comprised of Level 1 financial instruments of money market fund investments. Level 1 financial instruments are comprised of cash equivalents and certain U.S. Treasury bills. Level 2 financial instruments are comprised of certain U.S. Treasury bills and U.S. Notes and Bonds. The Company’s valuation technique used to measure the fair value of money market funds and Level 1 U.S. Treasury bills is derived from quoted prices in active markets for identical assets or liabilities. The fair value of Level 2 financial instruments is derived using observable inputs other than quoted prices.

Balance Sheet Details

Inventory

Inventory consists of the following (in thousands):

Property and Equipment, net

Property and equipment are comprised of the following (in thousands):

Depreciation and amortization expense was $0.2 million and $0.3 million for thethree months ended September 30, 2026 and 2025, respectively, and $0.5 million and $0.8 million for thenine months ended September 30, 2026 and 2025, respectively.

Other Non-Current Assets

Other non-current assets are comprised of the following (in thousands):

Recorder depreciation expense was $0.1 million for both thethree months ended September 30, 2026 and 2025, and $0.2 million and $0.3 million for thenine months ended September 30, 2026 and 2025, respectively.

Accrued Liabilities

Accrued liabilities are comprised of the following (in thousands):

Employee Benefit Plan

The Company offers its employees a tax-deferred savings plan, commonly referred to as a 401(k) plan. Employee contributions are withheld from payroll checks and are automatically withdrawn from the Company’s checking account and deposited into participants’ retirement accounts a few days following each payroll period. Beginning March 1, 2025, the Company provides a 50% match for employee contributions up to a certain limit. The Company contributed$0.3 million for both thethree months ended September 30, 2026 and 2025, and $1.2 million and $0.8 million during thenine months ended September 30, 2026 and 2025, respectively, to its 401(k) plan.

Commitments and Contingencies

Litigation

On July 7, 2025, the Company filed patent infringement complaints against Natus Medical Incorporated and related subsidiaries (“Natus”) with the U.S. International Trade Commission (“USITC”) and the U.S. District Court for the District of Delaware (the “District Court”). On August 6, 2025, the USITC instituted an investigation of these claims pursuant to Section 337 of the Tariff Act of 1930 and on August 12, 2025, the District Court stayed the pending patent infringement action until the final determination of the USITC investigation.

Legal fees are expensed in the period in which they are incurred and are included in accrued liabilities. In addition to expenses incurred, as of September 30, 2026, the Company has a commitment to pay $2.9 million in deferred legal fees contingent upon the earlier of settlement or favorable Initial Determination by the Administrative Law Judge related to the Natus patent infringement complaints. The Company records a provision for a liability when management believes that it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No provision or accrual has been recorded related to the deferred legal fees based on currently available information. As of September 30, 2026, and December 31, 2025, there wereno litigation liabilities recordedfor the contingent deferred legal fees described above.

IEEPA Tariff Refunds

The Company does not expect future IEEPA tariff refunds to be material, but will recognize the refunds when the requirements under ASC 450, Contingencies, have been met.

Leases

The Company’s right-of-use (“ROU”) asset relates to its leased corporate offices and warehouse in Sunnyvale, CA. Supplemental balance sheet information related to leases was as follows (in thousands):

A summary of total lease expense and other information for the periods relating to the Company’s operating leases was as follows (in thousands):

The Company leases office space and warehouse space under non-cancelable operating leases. As of September 30, 2026, the future minimum lease payments under the non-cancelable operating lease are as follows (in thousands):

Debt

2024 VLSA Term Loan

In consideration of the 2024 principal loan repayment schedule and future operating cash flow requirements, effective February 6, 2024, the Company executed a Venture Loan and Security Agreement (“VLSA”) with Horizon Technology Finance Corporation (“Horizon”) as a lender and the collateral agent and Silicon Valley Bank (“SVB”) as a lender (collectively, the “Lenders”).

Upon execution of the VLSA, the Company drew down the entire first tranche of $20.0 million in principal (“VLSA Term Loan”), including $6.0 million from SVB (“SVB Loan”) and $14.0 million from Horizon (“Horizon Loan”). Subject to the VLSA terms, the Company was entitled to receive up to $30.0 million (“Outstanding Commitment”) in three additional tranches of $10.0 million each. On June 30, 2026, the first $10.0 million tranche expired and the Company did not draw down on the first tranche. $20.0 million remained available as of June 30, 2026. Each lender’s obligation to lend its undisbursed portion of the Outstanding Commitment to the Company would have terminated if, in such Lender’s sole good faith discretion, there was a material adverse change in the results of operations or financial condition of the Company, whether or not arising from transactions in the ordinary course of business, or there had been any material adverse deviation by the Company from the business plan of the Company presented to any Lender. No material adverse changes were identified through the termination of the VLSA.

The VLSA Term Loan was payable to the Lenders in twelve equal monthly installments between April 1, 2028 (“Amortization Date”) and March 1, 2029 (“Maturity Date”) subject to certain prepayment fees in accordance with the VLSA. The SVB Loan carried a variable per annum interest rate at the Prime Rate (as published in the Wall Street Journal), subject to the floor of 6.00%. The Horizon Loan carried a variable per annum interest rate at the Prime Rate plus 2.75%, subject to the floor of 9.25%. Collateral for the VLSA consisted of a security interest in all assets of the Company, excluding intellectual property.

On August 5, 2026, the Company entered into a Credit, Security and Guaranty Agreement (the “Credit Agreement”) with MidCap Funding IV Trust, as agent, MidCap Financial Trust, as term loan servicer, and the lenders party thereto (collectively, “MidCap”). Concurrently with entering into the Credit Agreement, the Company repaid in full and terminated its VLSA with the Lenders, under which $20.0 million of term loans were outstanding. The aggregate payoff of $21.4 million (excluding accrued interest) comprised of the $20.0 million principal balance, a $0.8 million end-of-term fee, and a $0.6 million prepayment fee. The Company recognized a loss on extinguishment of debt of $1.5 million in the three months ended September 30, 2026, consisting of the prepayment and end-of-term fees paid (net of amounts previously accreted) and the write-off of unamortized debt discounts and deferred financing costs associated with the VLSA. The loss is presented within Other income (expense), net, in the condensed statements of operations.

Senior Revolving Facility

In February 2024, the Company also executed a Loan and Security Agreement (“LSA”) with SVB to receive a senior revolving line of credit of up to $10.0 million (“Revolving Facility”). The Revolving Facility matured on February 6, 2026. No borrowings were made under the Revolving Facility, and the Revolving Facility is no longer available for borrowing.

MidCap Credit Facility

The Credit Agreement provides for (i) a term loan facility, consisting of a $30.0 million commitment available to draw at the Company’s request at any time before December 31, 2028 in minimum increments of $5.0 million (“Term Loan Tranche 1”) and an additional $25.0 million of uncommitted capital that may be available at MidCap's discretion, and (ii) a revolving loan facility in an aggregate principal amount of up to$20.0 million, which may be increased to up to $30.0 million at the Company’s discretion upon satisfaction of certain conditions set forth therein(the “MidCap Revolving Facility”). The $20.0 million revolving credit facility operateson a non-formula basis through December 31, 2027, (or earlier upon an event of default), after which time, availability under the facility will be subject to a borrowing base based on eligible accounts receivable and inventory. All loans under the Credit Agreement mature on August 5, 2031.

The MidCap Revolving Facility bears interest at Term SOFR (subject to a 1.00% floor) plus 3.75% per annum, and term loans bear interest at Term SOFR (subject to 1.00% floor) plus 5.00% per annum, in each case payable monthly in arrears. The Company also pays a facility fee of 0.50% per annum on the revolving loan commitment, payable monthly, and a quarterly minimum balance fee equal to the shortfall, if any, between interest actually earned by the lenders on revolving loans and interest computed on 25% of the revolving loan commitment. If the Company terminates or permanently reduces the revolving commitment, or prepays term loans, before the third anniversary of closing, exit fees of 3.0%,2.0%, or 1.0% of the amount terminated, reduced, or prepaid apply in years one, two, and three, respectively; no such fees apply thereafter or upon repayment at maturity, and none have been accrued because early termination is not considered probable. The Company’s obligations under the Credit Agreement are secured by a security interest in substantially all of the Company’s assets, including its intellectual property.

The Credit Agreement contains affirmative, negative, and financial covenants. The financial covenants are tested only while outstanding term loans plus the revolving loan commitment exceed $35.0 million. Because no term loans were outstanding as of

September 30, 2026, the Company was not in a financial covenant testing period. The Company was in compliance with all covenants under the Credit Agreement as of September 30, 2026.

The Company incurred $0.5 million of costs in connection with the Credit Agreement, of which $0.2 million was allocated to the MidCap Revolving Facility to be recognized as interest expense through the maturity date, and $0.3 million was allocated to the Term Loan Tranche 1 commitment to be recognized as interest expense through the end of its availability period on December 31, 2028, subject to reclassification upon any draw. As of September 30, 2026, unamortized deferred financing costs were recorded as assets, of which $0.1 million was included in prepaid expenses and other current assets and $0.4 million in other non-current assets on the condensed balance sheets.

At closing, the Company borrowed $20.0 million under the MidCap Revolving Facility, the proceeds of which, together with cash on hand, were used to repay the VLSA. Future borrowings will be used for working capital and general corporate purposes. As of September 30, 2026, $20.0 million of revolving loans were outstanding, andno term loans had been drawn. The revolving loans are classified as long-term based on the August 2031 maturity.

On August 18, 2026, the Company repaid $20.0 million on the MidCap Revolving Facility. On September 21, 2026, $20.0 million was again drawn by the Company under the MidCap Revolving Facility. The $20.0 million was repaid on October 7, 2026.

Notes payable consists of the following (in thousands):

Warrants

On February 6, 2024, the Company, Horizon, and SVB entered into a $60.0 million financing commitment as discussed in Note 9. Warrants representing the right to purchase 41,345 shares of Series C-1 redeemable convertible preferred stock at a price of $11.49 per share were issued upon closing. Immediately prior to the Company’s initial public offering(“IPO”) on October 15, 2024, all warrants exercisable for redeemable convertible preferred stock were converted into warrants exercisable for common stock and reclassified from liabilities to equity. All warrants are currently exercisable, in whole or in part, and expire in 2030, 2032, and 2034. To the extent the warrants are not previously exercised, and if the fair market value of one share is greater than the exercise price under the warrants then in effect, the warrants shall be deemed automatically exercised immediately before expiration. The warrants issued to the lenders in connection with the VLSA survive its termination and remain outstanding and remain classified within stockholders’ equity.

The warrants are included in Additional paid-in capital as of September 30, 2026, and December 31, 2025.

Stockholders’ Equity

Common Stock

The Company is authorized to issue 500,000,000 shares of $0.001 par value common stock as of both September 30, 2026, and December 31, 2025.

The holders of common stock are entitled to receive dividends whenever funds and assets are legally available and when declared by the Board of Directors. As of September 30, 2026, no dividends had been declared.

As of September 30, 2026, and December 31, 2025, the Company had reserved common stock for future issuance as follows:

Stock Incentive Plan

Activity under the 2014 Stock Incentive Plan (the “2014 Plan”), 2024 Equity Incentive Plan (the “2024 EIP”), and 2024 Incentive Award Plan (the “2024 Plan”) is as follows:

The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2026 and 2025 was $11.58 and $10.47 per share, respectively. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2026 and 2025 was $10.8 millionand $12.6 million, respectively.

Restricted Stock Unit activity under the plans is as follows:

The total fair value of shares vested during the nine months ended September 30, 2026 and 2025 was $9.0 million and $2.7 million, respectively.

Stock-Based Compensation

As of September 30, 2026, the aggregate unrecognized compensation costs related to outstanding unvested options and RSUs under the 2014 Plan, 2024 EIP, and 2024 Plan was $56.8 million. The Company expects to recognize those costs over a weighted average period of 3.0 years.

The fair value of RSUs is based on the Company’s closing stock price on the date of grant. The fair value of service-based stock options and RSUs are amortized on a straight-line basis over the requisite service period of the awards.

The fair value of employee stock options granted was estimated using the following weighted-average assumptions for thethree and nine months ended September 30, 2026 and 2025:

*There were no options granted for the three months ended September 30, 2025

The expected term is based on an average of the midpoint of the requisite service period and the contractual term, and the historical exercise behavior. The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as well as the Company’s historical volatility. The Company will continue to analyze the historical stock price volatility and expected term assumptions as more historical data for the Company’s common stock becomes available. The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history and expectation of no dividend payouts.

The Company’s total stock-based compensation expense was as follows (in thousands):

Stock-based compensation expense does not include the impact of estimated forfeitures. Forfeitures are taken as a reduction in expense in the period in which they occur. No compensation cost is recorded for awards that do not vest. Option awards included performance-based awards which are subject to the achievement of performance goals. For options subject to performance goals, the Company recognizes expense when it is probable that the performance condition will be achieved. These performance-based awards represent 27,236 and 40,854 of option awards outstanding as of September 30, 2026 and December 31, 2025, respectively and stock-based compensation related to performance-based awards was not material. Total stock-based compensation expense includes non-employee stock-based compensation of $0.3 million and $0.2 millionfor the three months ended September 30, 2026 and 2025, respectively, and $0.8 million and $0.9 million for thenine months ended September 30, 2026 and 2025, respectively.

Employee Stock Purchase Plan

In February 2025, the Company adopted the Employee Stock Purchase Plan (the “ESPP”). The Company allows eligible employees to purchase shares of the Company’s common stock through payroll deductions at a price equal to 85% of the lesser of the fair market value of the stock as of the first date or the ending date of each offering period, which is typically six months. In January 2026, the number of shares of common stock available for issuance under the ESPP was increased by 374,848 shares as a result of the automatic increase provision in the ESPP.

As of September 30, 2026,1,001,501 shares under the ESPP remain available for purchase. The offering period and purchase period is determined by the Board of Directors. Stock-based compensation related to the ESPP was not material and is included in the Company’s total stock-based compensation expense table above.

Net loss attributable to common stockholders

Basic net loss per share attributable to the Company’s common stockholders is computed by dividing the net loss attributable to the Company’s common stockholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted net loss per share is the same as basic net loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss position in each period presented.

The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):

The following potentially dilutive securities outstanding have been excluded from the computations of weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in common stock equivalent shares, in thousands):

Income Taxes

The Company had an effective tax rate of 0.0% for both of thethree and nine months ended September 30, 2026 and 2025. The Company continues to incur operating losses.

During the three and nine months ended September 30, 2026 and 2025, the Company evaluated all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and determined that it is more likely than not that its net deferred tax assets will not be realized. Due to uncertainties surrounding the realization of the deferred tax assets, the Company continues to maintain a full valuation allowance against its net deferred tax assets.