ATOSSA THERAPEUTICS, INC. Stock Compensation Disclosure
NOTE 14: STOCK BASED COMPENSATION
On May 15, 2020, the stockholders of the Company approved the 2020 Stock Incentive Plan (the 2020 Plan) to provide for the grants of equity-based awards to employees, officers, non-employee directors and other key persons providing services to the Company. An aggregate of 3,000,000 shares of common stock was initially reserved for issuance in connection with awards granted under the 2020 Plan. On May 14, 2021, the stockholders approved an additional 15,000,000 shares available for issuance under the 2020 Plan. On June 27, 2024, the stockholders of the Company approved an amendment and restatement of the 2020 Plan which increased the shares available for issuance by 12,000,000 shares, to a total of 30,000,000 shares available for grant. The 2020 Plan was also extended through June 27, 2034. As of December 31, 2024, 12,991,925 shares were available for future grants under the 2020 Plan.
The Company granted 4,701,334 and 6,828,600 options to purchase shares of common stock to employees and directors during the years ended December 31, 2024 and 2023, respectively. The weighted average grant date fair value of options granted during the years ended December 31, 2024 and 2023 was $0.88 and $0.69, respectively. There were 343,998 options exercised during the year ended December 31, 2024. No options were exercised during the year ended December 31, 2023.
The fair values of stock options granted were calculated using the Black-Scholes option-pricing model applying the following assumptions:
|
|
Year Ended December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Risk-free interest rate |
|
4.01% - 4.24% |
|
|
3.27% - 4.48% |
|
||
Expected term (in years) |
|
5.31 - 6.11 |
|
|
5.31 - 6.16 |
|
||
Dividend yield |
|
|
— |
|
|
|
— |
|
Expected volatility |
|
97% - 120% |
|
|
103% - 129% |
|
||
The Company recognized stock-based compensation expense in the Consolidated Statements of Operations as follows (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
General and administrative |
|
$ |
1,647 |
|
|
$ |
3,038 |
|
Research and development |
|
|
645 |
|
|
|
1,583 |
|
Total stock-based compensation expense |
|
$ |
2,292 |
|
|
$ |
4,621 |
|
The following table shows a summary of all stock option activity for the year ended December 31, 2024:
|
|
Number of |
|
|
Weighted- |
|
|
Weighted- |
|
|
Aggregate |
|
||||
Outstanding as of January 1, 2024 |
|
|
17,506,345 |
|
|
$ |
1.79 |
|
|
|
|
|
|
|
||
Granted |
|
|
4,701,334 |
|
|
|
1.11 |
|
|
|
|
|
|
|
||
Forfeited |
|
|
(1,167,504 |
) |
|
|
1.60 |
|
|
|
|
|
|
|
||
Exercised |
|
|
(343,998 |
) |
|
|
0.79 |
|
|
|
|
|
|
|
||
Expired |
|
|
(4,606 |
) |
|
|
258.08 |
|
|
|
|
|
|
|
||
Outstanding as of December 31, 2024 |
|
|
20,691,571 |
|
|
$ |
1.60 |
|
|
|
6.95 |
|
|
$ |
657,814 |
|
Exercisable as of December 31, 2024 |
|
|
16,978,976 |
|
|
$ |
1.71 |
|
|
|
6.42 |
|
|
$ |
594,188 |
|
Vested and expected to vest |
|
|
20,691,571 |
|
|
$ |
1.60 |
|
|
|
6.95 |
|
|
$ |
657,814 |
|
As of December 31, 2024, there were 3,712,595 unvested options outstanding, and the related unrecognized total compensation cost associated with these options was $3.0 million. This expense is expected to be recognized over a weighted-average period of 1.83 years.
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.