Aquestive Therapeutics, Inc.AQST
Aquestive Therapeutics, Inc. Stock Compensation Disclosure
Share-Based Compensation
The Company provides certain employees, non-employee directors and consultants with performance incentives under the Aquestive Therapeutics, Inc. Equity Incentive Plan (“the Plan”), adopted by the Board of Directors on June 15, 2018. Under this Plan, the Company may grant restricted stock units, stock options, or other stock-based awards in order to align the long-term financial interests of selected participants with those of its stockholders, strengthen the commitment of such persons to the Company, and attract and retain competent and dedicated persons whose efforts will enhance long-term growth, profitability and share value.
The service-based restricted stock units and stock options that have been awarded are subject to graded vesting over a service period, which is typically three years. The restricted stock units with vesting based on market conditions were awarded in 2023 and 2025 and vest in three years on the anniversary of the first tranche award. Compensation cost is recognized for restricted stock units, both service-based awards and market conditions vesting-based awards, on a straight line basis over the requisite service period for each award granted. Compensation cost for stock option awards is recognized based on a pro-rata basis over the requisite period for each award granted.
At December 31, 2025, there were approximately 4.0 million shares available for grant.
The Company recognized share-based compensation in its Statements of Operations and Comprehensive Loss during the periods presented as follows:
| Year Ended December 31, | |||||||||||
| Expense classification: | 2025 | 2024 | |||||||||
| Manufacture and supply | $ | 481 | $ | 374 | |||||||
| Research and development | 1,875 | 1,215 | |||||||||
| Selling, general and administrative | 5,268 | 5,510 | |||||||||
| Total share-based compensation expenses | $ | 7,624 | $ | 7,099 | |||||||
| Share-based compensation from: | |||||||||||
| Restricted Stock Units | 5,401 | 4,545 | |||||||||
| Stock Options | 2,142 | 2,512 | |||||||||
| Employee Stock Purchase Plan | 81 | 42 | |||||||||
| Total share-based compensation expenses | $ | 7,624 | $ | 7,099 | |||||||
The following tables provide information about the Company’s restricted stock unit and stock option activity during the years ended December 31, 2025 and 2024.
Restricted Stock Units
The following tables summarize the Company’s awards of service-based and market conditions vesting-based restricted stock units during the years ended December 31, 2025 and 2024:
Restricted Stock Unit Awards (RSUs) - Service-based: | Number of Units | Weighted Average Grant Date Fair Value Per Share | |||||||||
| (In thousands) | |||||||||||
| Unvested as of December 31, 2023 | 1,948 | $ | 0.97 | ||||||||
| Granted | 1,470 | 5.52 | |||||||||
| Forfeited | (43) | 1.58 | |||||||||
| Vested | (765) | 1.45 | |||||||||
| Unvested as of December 31, 2024 | 2,610 | $ | 3.38 | ||||||||
| Granted | 1,602 | 2.91 | |||||||||
| Forfeited | (465) | 3.33 | |||||||||
| Vested | (1,063) | 3.04 | |||||||||
| Unvested as of December 31, 2025 | 2,684 | $ | 3.24 | ||||||||
| Expected to vest as of December 31, 2025 | 2,548 | $ | 3.22 | ||||||||
The Company granted 1,602,050 service-based restricted stock units during the year ended December 31, 2025. The Company granted 1,470,300 service-based restricted stock units during the year ended December 31, 2024. During 2025, the total grant date fair market value of shares vested was $3,236.
As of December 31, 2025, $5,021 of total unrecognized compensation expenses related to unvested service-based restricted stock units are expected to be recognized over a remaining weighted average period of 1.49 years. The service-based restricted stock units granted to employees are subject to a three-year graduated vesting schedule and are not subject to performance-based criteria other than continued employment.
Restricted Stock Unit Awards (RSUs) - Market conditions vesting-based: | Number of Units | Weighted Average Grant Date Fair Value Per Share | |||||||||
| (In thousands) | |||||||||||
| Unvested as of December 31, 2023 | 1,332 | $ | 2.40 | ||||||||
| Granted | — | ||||||||||
| Forfeited | — | — | |||||||||
| Vested | (250) | 2.41 | |||||||||
| Unvested as of December 31, 2024 | 1,082 | $ | 2.40 | ||||||||
| Granted | 784 | 2.82 | |||||||||
| Forfeited | (138) | 2.82 | |||||||||
| Vested | — | — | |||||||||
| Unvested as of December 31, 2025 | 1,728 | $ | 2.55 | ||||||||
| Expected to vest as of December 31, 2025 | 1,641 | $ | 2.54 | ||||||||
The Company granted 784,350 market conditions vesting-based restricted stock units during the year ended December 31, 2025. There were no market conditions vesting-based restricted stock units granted during the year ended December 31, 2024.
As of December 31, 2025, $1,450 of total unrecognized compensation expenses related to unvested market conditions vesting-based restricted stock units are expected to be recognized over a remaining weighted average period of 1.03 years.
The 2023 market conditions vesting-based restricted stock units vest based on a Performance Price measured as the 30-day average of the closing prices of the Company’s common stock as reported on the Nasdaq Stock Market immediately prior to and including the last calendar day of the three-year performance period (which ends on the third anniversary of the grant
date). To the extent the Performance Price is less than $1.75, the Vesting Percentage will be zero. To the extent the Performance Price is $1.75, the Vesting Percentage will be 50%. To the extent the Performance Price is $1.76 or greater, but less than $2.50, the Vesting Percentage will be a prorated amount between 50.01% and 99.99%, based on straight-line interpolation. To the extent the Performance Price is $2.50, the Vesting Percentage will be 100%. To the extent the Performance Price is $2.51 or greater, but less than $3.25, the Vesting Percentage will be a prorated amount between 100.01% and 149.99%, based on straight-line interpolation. To the extent the Performance Price is $3.25 or greater, the Vesting Percentage will be 150%. In no event will the Vesting Percentage exceed 150%.
The 2025 market conditions vesting-based restricted stock units were measured over a three-year performance period. The performance period is split into two pricing periods. The first pricing period commences on the grant date and ends on the calendar day immediately proceeding the second anniversary of the grant date. The second pricing period commences on the second anniversary of the grant date and ends on the third anniversary of the grant date, The performance price for the first pricing period is calculated based on the 30-day average price observed for the last 30 days of the first pricing period. The performance price for the second pricing period is calculated based on the highest 30-day average for any 30-day period throughout the second pricing period. To the extent the Performance Price is less than $6.00, the Vesting Percentage will be zero. To the extent the Performance Price is $6.00, the Vesting Percentage will be 50%. To the extent the Performance Price is $6.01 or greater, but less than $7.00, the Vesting Percentage will be a prorated amount between 50.01% and 99.99%, based on straight-line interpolation. To the extent the Performance Price is $7.00, the Vesting Percentage will be 100%. To the extent the Performance Price is $7.01 or greater, but less than $8.00, the Vesting Percentage will be a prorated amount between 100.01% and 149.99%, based on straight-line interpolation. To the extent the Performance Price is $8.00 or greater, the Vesting Percentage will be 150%. In no event will the Vesting Percentage exceed 150%.
The Company’s estimates of the fair value of the 2025 market conditions vesting-based awards at their grant or valuation dates were based on a Monte Carlo simulation and considered various variables and the following assumptions:
| Year Ended December 31, 2025 | |||||
| Expected dividend yield | 0% | ||||
| Expected volatility | 91.5% | ||||
| Risk-free interest rate | 3.9% | ||||
Stock price at grant date | $2.65 | ||||
Stock option awards
The following table summarizes the Company’s stock option activity during the years ended December 31, 2025 and 2024:
| (in 000s, except share price data) | Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term in Years | Aggregate Intrinsic Value | |||||||||||||||||||
| Outstanding as of December 31, 2023 | 5,733 | $ | 5.58 | 6.41 | $ | 1,082 | |||||||||||||||||
| Granted | 1,024 | 4.83 | |||||||||||||||||||||
| Exercised | (357) | 2.05 | |||||||||||||||||||||
| Forfeited and Expired | (99) | 3.84 | |||||||||||||||||||||
| Outstanding as of December 31, 2024 | 6,301 | 5.68 | 6.08 | 4,009 | |||||||||||||||||||
| Granted | 1,040 | 2.98 | |||||||||||||||||||||
Exercised | (568) | 2.24 | |||||||||||||||||||||
| Forfeited and Expired | (215) | 4.60 | |||||||||||||||||||||
| Outstanding as of December 31, 2025 | 6,558 | 5.59 | 5.58 | 14,918 | |||||||||||||||||||
| Expected to vest as of December 31, 2025 | 6,482 | 5.61 | 5.54 | 14,705 | |||||||||||||||||||
| Exercisable as of December 31, 2025 | 5,136 | $ | 6.07 | 4.65 | $ | 11,185 | |||||||||||||||||
The weighted average grant date fair value of stock options granted during the years ended December 31, 2025 and 2024 was $2.38 and $3.98, respectively. During the year ended December 31, 2025, 1,040,000 stock options were granted with an exercise price of $2.98 and accordingly, given the Company’s share price of $6.46 at December 31, 2025, the aggregate
intrinsic value provided by certain shares granted during this period was approximately $3,600. During the year ended December 31, 2024, 1,023,900 stock options were granted with an exercise price of $4.83 and accordingly, given the Company’s share price of $3.56 at December 31, 2024, the intrinsic value provided by certain shares granted during this period was de minimis.
The fair values of stock options granted were estimated using the Black-Scholes model based on the following assumptions:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Expected dividend yield | 0% | 0% | |||||||||||||||||||||
| Expected volatility | 96% | - | 97% | 104% | - | 107% | |||||||||||||||||
| Expected term (years) | 5.5 | - | 6.1 | 5.5 | - | 6.1 | |||||||||||||||||
| Risk-free interest rate | 3.8% | - | 4.2% | 4.1% | - | 4.5% | |||||||||||||||||
| Exercise prices | $2.65 | - | $5.58 | $2.50 | - | $5.68 | |||||||||||||||||
The Company anticipates reinvesting earnings for the foreseeable future in product development and other avenues of share-value growth and therefore used a dividend yield of zero. The estimate of volatility was determined based on an estimate of stock price volatility using the historical trading data of the Company's publicly-traded Common Stock at the time of grant. The expected term of the award was calculated using the simplified method and weighted average was utilized taking into account the vesting periods and contractual life. The risk-free interest rates are derived from the U.S. Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected term of the options.
As of December 31, 2025, $2,964 of total unrecognized compensation expenses related to non-vested stock options is expected to be recognized over a remaining weighted average period of 1.56 years. These option grants provided a maximum contract term of 10 years from grant date, with a weighted average remaining contract life of 5.58 years. Options granted to senior management and key employees are subject to a 3-year graded vesting schedule while options granted to the Board of Directors are subject to a one year cliff vesting schedule. These stock options are not subject to performance-based criteria other than continued employment.
2022 Inducement Equity Incentive Plan
In accordance with NASDAQ Listing Rule 5635(c)(4), the Company adopted the 2022 Equity Inducement Plan approved by the Compensation Committee of the Board of Directors of the Company effective as of July 29, 2022. There were 50,000 service-based awards and 50,000 options granted and outstanding under this Plan as of December 31, 2025. The options and service-based awards granted under this Plan are included in the tables above. As of December 31, 2025, 900,000 shares remained available for grant under this Plan.
Employee Stock Purchase Plan
The Company’s Employee Stock Purchase Plan (the "ESPP"), as amended and restated effective as of January 1, 2019, features two six-month offering periods per year, running from January 1 to June 30 and July 1 to December 31. Under the ESPP, employees of the Company may elect to purchase the Company’s Common Stock at the lower of 85% of the fair value of shares on either the first or last day of the offering period. During the years ended December 31, 2025 and 2024, 38,377 and 35,374 shares were purchased and issued through the ESPP at total discounts of $81 and $42, respectively. As of December 31, 2025, 307,845 shares remained available for issuance under the ESPP.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 4, 2026 | Showing above |
| 2024 | Mar 5, 2025 | |
| 2023 | Mar 5, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Mar 8, 2022 | |
| 2020 | Mar 9, 2021 | |
| 2019 | Mar 11, 2020 | |
| 2018 | Mar 14, 2019 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.