Black Diamond Therapeutics, Inc.BDTX
Black Diamond Therapeutics, Inc. Stock Compensation Disclosure
STOCK-BASED COMPENSATION
2020 Stock Option and Incentive Plan
The 2020 Stock Option and Incentive Plan (the 2020 Plan) was approved by the Company’s board of directors on December 5, 2019, and the Company’s stockholders on January 14, 2020 and became effective on the date immediately prior to the date on which the registration statement for the Company’s initial public offering (IPO) was declared effective. The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards, cash-based awards and dividend equivalent rights to the Company’s officers, employees, directors and consultants. The number of shares initially reserved for issuance under the 2020 Plan was 6,665,891, which was cumulatively increased on January 1, 2021 and each January 1 thereafter by 4% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or such lesser number of shares determined by the Company’s board of directors or compensation committee of the board of directors. As of December 31, 2024, 4,453,331 shares remained available for issuance under the 2020 Plan. The number of authorized shares reserved for issuance under the 2020 Plan was increased by 2,265,786 shares effective as of January 1, 2025.
2020 Employee Stock Purchase Plan
The 2020 Employee Stock Purchase Plan (the 2020 ESPP) was approved by the Company’s board of directors on December 5, 2019, and the Company’s stockholders on January 14, 2020, and became effective on the date immediately prior to the date on which the registration statement for the Company’s IPO was declared effective. A total of 326,364 shares of common stock were initially reserved for issuance under this plan, which was cumulatively increased on January 1, 2021 and each January 1 thereafter by 1% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or such lesser number of shares determined by the Company’s board of directors or compensation committee of the board of directors. As of December 31, 2024, 1,388,889 shares remained available for issuance under the 2020 ESPP. The number of authorized shares reserved for issuance under the 2020 ESPP was increased by 326,364 shares effective as of January 1, 2025.
Option valuation
The assumptions that the Company used to determine the grant-date fair value of options granted were as follows, presented on a weighted-average basis:
| December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Risk-free interest rate | 4.23 | % | 4.03 | % | ||||||||||
| Expected term (in years) | 5.9 | 5.9 | ||||||||||||
| Expected volatility | 83.2 | % | 80.1 | % | ||||||||||
| Expected dividend yield | 0 | % | 0 | % | ||||||||||
Options
The following table summarizes the stock option activity under the Company’s equity awards plans:
| Options | Weighted Average Exercise Price | Weighted Average Remaining Life (in Years) | Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding December 31, 2023 | 8,135,711 | $ | 7.85 | 8.0 | $ | 1,146 | |||||||||||||||||
| Granted | 3,604,552 | $ | 4.95 | ||||||||||||||||||||
| Exercised | (341,983) | $ | 2.33 | ||||||||||||||||||||
| Cancelled or forfeited | (1,925,440) | $ | 4.89 | ||||||||||||||||||||
| Expired | (38,098) | $ | 22.04 | ||||||||||||||||||||
| Outstanding December 31, 2024 | 9,434,742 | $ | 7.48 | 6.6 | $ | 313 | |||||||||||||||||
| Options vested or expected to vest at December 31, 2024 | 9,434,742 | $ | 7.48 | 6.6 | $ | 313 | |||||||||||||||||
| Options exercisable at December 31, 2024 | 5,206,237 | $ | 10.24 | 5.1 | $ | 157 | |||||||||||||||||
The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock.
The weighted-average grant-date fair value per share of options granted during the years ended December 31, 2024 and 2023 was $3.45 and $2.05, respectively.
The total fair value of options vested during the years ended December 31, 2024 and 2023 was $6,409 and $8,473, respectively.
Restricted stock
Under terms of the restricted stock agreements covering the common stock, shares of restricted common stock are subject to a vesting schedule. The majority of restricted stock vests over a one-year period during which time all unvested stock will immediately be forfeited to the Company if the relationship between the recipient and the Company ceases. Subject to the continued employment (or other engagement of the recipient by the Company as described in the restricted stock agreements), all shares of restricted common stock become fully vested within one year of the vesting commencement date.
The following table summarizes restricted stock activity:
Number of shares | Weighted average grant date fair value | ||||||||||
| Unvested restricted common stock as of December 31, 2023 | 20,799 | $ | 2.41 | ||||||||
| Granted | 540,000 | $ | 3.66 | ||||||||
| Vested | (19,449) | $ | 2.40 | ||||||||
| Cancelled or forfeited | (1,350) | $ | 2.55 | ||||||||
| Unvested restricted common stock as of December 31, 2024 | 540,000 | $ | 3.66 | ||||||||
The aggregate fair value of restricted stock that vested during the years ended December 31, 2024 and 2023 was $48 and $513, respectively.
The Company had 19,000 performance restricted stock units outstanding at the beginning of the year ended December 31, 2024. For the year ended December 31, 2024, the Company granted no performance restricted stock units to its employees, released no performance restricted stock units due to the achievement of certain clinical development and/or financing milestones, had no performance restricted stock units expire, and had 19,000 performance restricted stock units forfeited. As of December 31, 2024, the Company had no performance restricted stock units outstanding.
Recognition of stock-based compensation expense associated with performance restricted stock units commences when the performance conditions are considered probable of achievement, using management’s best estimates, which consider the inherent risk and uncertainty regarding the future outcomes of the milestones.
As of December 31, 2024 there were no performance-based restricted stock units outstanding. As of December 31, 2023, for performance-based restricted stock units that were outstanding, the achievement of milestones was considered probable for no shares and therefore no expense was recognized related to these awards in the year ended December 31, 2023.
Stock-based compensation expense
The Company recorded stock-based compensation expense in the following award type categories included within its consolidated statements of operations and comprehensive loss:
| December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Stock options | $ | 9,940 | $ | 8,975 | |||||||
| Restricted stock units | 432 | 270 | |||||||||
| Employee Stock Purchase Plan and Other | 255 | 359 | |||||||||
| $ | 10,627 | $ | 9,604 | ||||||||
For the years ended December 31, 2024 and 2023, the Company issued 37,407 and 64,470 shares, respectively, of common stock out of the 2020 Plan under the Company’s policy where non-employee directors may elect to receive their compensation in the form of common stock in lieu of cash.
The Company recorded stock-based compensation expense related to stock options and restricted stock units in the following expense categories of its consolidated statements of operations and comprehensive loss:
| December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Research and development | $ | 2,583 | $ | 3,050 | |||||||
| General and administrative | 8,044 | 6,554 | |||||||||
| $ | 10,627 | $ | 9,604 | ||||||||
As of December 31, 2024, total unrecognized compensation cost related to the unvested stock options was $9,253, which is expected to be recognized over a weighted average period of 2.6 years.
As of December 31, 2024, total unrecognized compensation cost related to the unvested restricted stock units was $1,562, which is expected to be recognized over a weighted average period of 0.8 years.
Employee stock purchase plan
The 2020 ESPP enables eligible employees to purchase shares of the Company's common stock at the end of each six-month offering period at a price equal to 85% of the fair market value of the shares on the first business day or the last business day of the offering period, whichever is lower. Eligible employees generally includes all employees. Offering periods begin on the first trading day of January and July of each year and end on the last trading day in June and December of each year. Share purchases are funded through payroll deductions of up to 10% of an employee’s eligible compensation for each payroll period, up to $25 each calendar year.
For the years ended December 31, 2024 and 2023, there were 114,102 and 69,005 shares, respectively, issued under the 2020 ESPP.
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.