Equity Incentive Plan and Stock Based Compensation |
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| Equity Incentive Plan and Stock Based Compensation | 10. Equity Incentive Plan and Stock Based Compensation Restricted Common Units and Restricted Shares Certain directors and advisors of the Company were granted 17,149 shares of restricted common units of West Affum LP between September 1, 2022 and October 16, 2024, with a vesting period of 3 years. In connection with the IPO, the restricted common units converted into 23,899 restricted Common Shares of Kestra Medical Technologies, Ltd., subject to continued vesting under the original grant agreements. As of July 31, 2026, 19,916 and 3,983 of these Common Shares were vested and unvested, respectively. As of April 30, 2026, 19,916 and 3,983 were vested and unvested, respectively. Certain directors and advisors of the Company were granted 35,787 shares of restricted Class A Common Units of West Affum LP between July 24, 2024 and November 3, 2024, with a vesting period of 3 years. In connection with the IPO, Class A Common Units were automatically exchanged into 45,479 restricted Common Shares of Kestra Medical Technologies, Ltd., subject to continued vesting under the directors’ original grant agreements. During the three months ended July 31, 2026, 4,331 restricted Common Shares vested. As of July 31, 2026, there were 28,153 and 17,326 shares of vested and unvested restricted Common Shares outstanding. As of April 30, 2026, there were 23,822 and 21,657 shares of vested and unvested restricted Common Shares outstanding. Share-based compensation expense associated with restricted common units and restricted Common Shares is immaterial and recorded within selling, general and administrative expense. In connection with the IPO, the Company entered into the 2025 Omnibus Incentive Plan to grant eligible individuals incentive equity awards, including stock options and restricted stock units. Stock option and restricted stock unit activity for the three months ended July 31, 2026 is as follows: Stock Options Stock option activity for the three months ended July 31, 2026 is as follows:
As of July 31, 2026, unrecognized compensation cost for outstanding stock options was $8,595, with the weighted-average period over which this cost is expected to be recognized at 0.33 years. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s Common Shares for those stock options that had exercise prices lower than the fair value of the Company’s Common Shares. The weighted average grant date fair value of stock options outstanding as of July 31, 2026 was $10.20 per share. Restricted Stock Units The 2025 Omnibus Incentive Plan also allows for the grants of restricted shares and restricted stock units. During the three months ended July 31, 2026, the Company granted restricted stock units which vest under three methods: • Three-year service period restricted unit grants which vest one-third on each of the first, second and third anniversaries of the date of grant. The fair value of these restricted stock units is determined based upon the Company’s stock price on the date of grant and expensed over the service period. • Performance based restricted stock unit grants that vest after one year only if the Company has achieved certain performance objectives as defined and approved by the Company’s Board of Directors. The fair value of the performance awards is determined based on the Company’s stock price at the date of grant and expensed over the performance period based on the probability of achieving the performance objectives. If such targets are not met or service is not rendered for the requisite service period, no compensation cost is recognized, and any recognized compensation cost in prior periods will be reversed. • Market based restricted stock units that have combined market conditions and service conditions for vesting, for which the Company uses the Monte Carlo valuation model to value equity awards (as of the date of grant). Compensation cost is not adjusted if the market condition is not met, as long as the requisite service is provided. Time Based Restricted Stock Units Time based restricted stock unit activity for the three months ended July 31, 2026 is as follows:
As of July 31, 2026, there was $44,285 of total unrecognized compensation cost related to unvested restricted units that is expected to be recognized over a weighted-average period of approximately 2.39 years. Performance Based Restricted Stock Units During the three months ended July 31, 2026, the Company granted 379,667 performance-based restricted stock units that vest upon achieving certain performance objectives. The weighted average grant date fair value is $18.82. During the three months ended July 31, 2026, 434,702 performance based restricted stock units vested. As of July 31, 2026, there was $7,145 of total unrecognized compensation cost related to unvested performance-based restricted stock units that is expected to be recognized over a weighted-average period of approximately 1.00 years. Market Based Restricted Stock Units During the three months ended July 31, 2026, the Company granted 189,832 market-based restricted stock units that vest upon achieving both market conditions and service conditions through April 30, 2028. During the three months ended July 31, 2026, 10,294 market-based restricted stock units were forfeited. The Company estimated the fair value of the market-based restricted stock units granted during the three months ended July 31, 2026 using a Monte Carlo simulation model with the following assumptions:
As of July 31, 2026, there was $7,162 of total unrecognized compensation cost related to unvested market-based restricted stock units that is expected to be recognized over a weighted-average period of approximately 1.64 years. As of July 31, 2026, none of the market-based restricted stock units were vested. Employee Stock Purchase Plan Under the 2025 Employee Stock Purchase Plan (the "ESPP") participants are permitted to purchase shares of Common Shares, up to the IRS allowable limit of $25,000 in any calendar year and no more than 1,000 shares on any purchase date, through contributions (in the form of payroll deductions or otherwise to the extent permitted by the administrator of the ESPP) of up to 15% of their eligible compensation. The ESPP provides for offering periods not to exceed 27-months, and the Company anticipates each offering period to consist of one or more six-month purchase periods. Participants are permitted to purchase shares of the Company’s Common Shares at 85% of the lower of the fair market value of the Company’s Common Shares on the first trading day of an offering period or on the last trading date in each purchase period in the applicable offering period. Participants may end their participation at any time during an offering period and will be paid their accrued contributions that have not yet been used to purchase shares. Participation ends automatically upon termination of employment with the Company. Share Based Compensation The Company recorded share-based compensation in the following expense categories of its unaudited interim condensed consolidated statements of operations and comprehensive loss:
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