ChronoScale Corp Stock Compensation Disclosure
13. Stock-based Compensation
2014 Equity Incentive Plan
In 2014, the Board of Directors and a majority of the stockholders adopted the Company's Amended and Restated 2014 Equity Incentive Plan (the "2014 Plan"), which expired on January 31, 2024. Following such expiration and prior to the 2024 Annual Meeting of Stockholders (the "Annual Meeting"), no grants were made under the 2014 Plan. On June 6, 2024, the Company held its Annual Meeting, whereby the Board of Directors and a majority of the stockholders adopted, amended, and restated the 2014 Plan (the "Restated 2014 Plan") to extend the term of the 2014 Plan until April 15, 2034, and to increase the total number of shares of common stock authorized for issuance by 67 shares relative to the amount available for issuance at the time the 2014 Plan expired. As of December 31, 2025, the total number of shares authorized for grant under the Restated 2014 Plan is shown in the table below:
| Original share pool | 9 | |||
| 2015 increase | 7 | |||
| 2017 increase | 4 | |||
| December 2017 increase (ratified in June 2018) | 20 | |||
| 2019 increase | 16 | |||
| March 2020 increase | 22 | |||
| December 2020 increase | 53 | |||
| 2022 increase | 37 | |||
| 2023 increase | 80 | |||
| 2024 increase | 67 | |||
| 2025 increase | 153 | |||
| Total shares authorized for grant as of December 31, 2025 | 468 |
Under the terms of the Restated 2014 Plan, the Board of Directors may award restricted stock, restricted stock units, stock options, stock appreciation rights and dividend equivalent rights having either a fixed or variable price related to the fair market value of the shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions or any other security with the value derived from the value of the shares.
Shares available for future grant as of December 31, 2025 under the Restated 2014 Plan was as follows:
| Shares Available | ||||
| For Grant | ||||
| Available as of December 31, 2024 | 47 | |||
| Share pool increase | 153 | |||
| Granted | (207 | ) | ||
| Forfeited | 6 | |||
| Expired | 1 | |||
| Available as of December 31, 2025 | — | |||
Restricted Stock Units
The Company issues time-based RSUs and PSUs to employees and non-employees. Each RSU and PSU represents the right to receive one share of the Company’s common stock upon vesting and subsequent settlement. PSUs vest upon achievement of performance targets based on the Company's annual operating plan. The fair values of RSUs and PSUs are determined based on the closing price of the Company’s common stock on the date of grant.
Combined RSU and PSU activity for the year ended December 31, 2025 is summarized below:
| Weighted | ||||||||
| Number of | Average Grant- | |||||||
| Shares | Date Fair Value | |||||||
| Unvested as of December 31, 2024 | 68 | $ | 18.27 | |||||
| Granted | 207 | $ | 5.36 | |||||
| Vested | (183 | ) | $ | 9.13 | ||||
| Forfeited | (6 | ) | $ | 9.88 | ||||
| Unvested as of December 31, 2025 | 86 | $ | 7.22 | |||||
The total grant-date fair value of RSUs and PSUs that vested during the year ended December 31, 2025 was $1,002. As of December 31, 2025, $286 of total unrecognized compensation expense related to unvested RSUs and PSUs was expected to be recognized over a weighted average period of 1.07 years.
Stock Options
The Board of Directors may grant stock options under the 2014 Plan at a price of not less than 100% of the fair market value of the Company’s common stock on the date the option is granted. The maximum term of an incentive stock option granted to participants may not exceed years. Subject to the limitations discussed above, the Board of Directors determines the term and exercise or purchase price of other awards granted under the Restated 2014 Plan. The Board of Directors also determines the terms and conditions of awards, including the vesting schedule and any forfeiture provisions. Options granted under the Restated 2014 Plan vest upon the passage of time, generally years, or upon the attainment of certain performance criteria established by the Board of Directors. The Company may grant options to purchase common stock to non-employees for advisory and consulting services. Upon exercise of a stock option, the Company issues new shares of common stock.
A summary of the stock option activity during the year ended December 31, 2025 is presented below:
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Options | Exercise | Contractual | Intrinsic | |||||||||||||
| Outstanding | Price | Life (Years) | Value | |||||||||||||
| Outstanding at beginning of year | 12 | $ | 471.74 | |||||||||||||
| Forfeited | — | $ | — | |||||||||||||
| Expired | (1 | ) | $ | 1,796.39 | ||||||||||||
| Outstanding at end of year | 11 | $ | 344.11 | 2.46 | $ | — | ||||||||||
| Vested and expected to vest | 11 | $ | 344.11 | 2.46 | $ | — | ||||||||||
| Exercisable at year end | 11 | $ | 344.00 | 2.46 | $ | — | ||||||||||
No stock options were exercised during the years ended December 31, 2025 and 2024.
As no stock options were granted during the years ended December 31, 2025 and 2024, there was no related weighted-average grant date fair value. The total grant date fair value of stock options vested during the years ended December 31, 2025 and 2024 was $0.
As of December 31, 2025, total unrecognized compensation cost related to unvested stock options was $0.
The following table summarizes information about stock options outstanding as of December 31, 2025:
| Options Outstanding | Options Exercisable | |||||||||||||||||||
| Weighted-Average | ||||||||||||||||||||
| Range of | Remaining | Weighted | Weighted | |||||||||||||||||
| Exercise | Number of | Contractual Life | Average | Number of | Average | |||||||||||||||
| Prices | Options | (Years) | Price | Options | Price | |||||||||||||||
| $85.50 - $85.50 | 3 | 4.04 | 85.50 | 3 | 85.50 | |||||||||||||||
| $137.25 - $395.85 | 4 | 2.94 | $ | 250.36 | 4 | $ | 250.18 | |||||||||||||
| $402.75 - $812.25 | 3 | 2.32 | $ | 475.43 | 3 | $ | 475.67 | |||||||||||||
| $900.00 - $2,945.25 | 1 | 0.58 | $ | 1,100.94 | 1 | $ | 1,100.94 | |||||||||||||
| 11 | 2.86 | $ | 344.11 | 11 | $ | 344.00 | ||||||||||||||
Compensation Expense
Stock-based compensation is included in the consolidated statements of operations and comprehensive loss in general and administrative, research and development, or sales and marketing expenses, depending on the nature of services provided. Stock-based compensation expense related to RSUs and PSUs was recorded as follows:
| Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Sales and marketing | $ | 76 | $ | 98 | ||||
| Research and development | 47 | 220 | ||||||
| General and administrative | 1,351 | 1,055 | ||||||
| $ | 1,474 | $ | 1,373 | |||||
Employee Stock Purchase Plan
The Company has an Employee Stock Purchase Plan ("ESPP"). Under the ESPP, the Company has 2 shares of common stock reserved for issuance, subject to adjustment in the event of a stock split, stock dividend, combination, reclassification or similar event. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 25% of their eligible compensation, subject to any plan limitations. The ESPP provides for six-month offering periods. At the end of each offering period, employees can purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last trading day of the offering period. As of December 31, 2025, the Company had not initiated employee enrollment to the plan.
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.