Clene Inc. Stock Compensation Disclosure
Note 11. Benefit Plans
401(k) Plan
Our 401(k) plan is a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. We match 100% of a participating employee’s deferral contributions up to 3% of annual compensation, limited to $4,500 of matching contributions. Our contributions to the 401(k) plan totaled $0.2 million and $0.2 million for the years ended December 31, 2024 and 2023, respectively.
Stock Compensation Plans
The Clene Nanomedicine, Inc. 2014 Stock Plan (the “2014 Plan”) was adopted in July 2014. Effective as of the closing of the Reverse Recapitalization, no additional awards may be granted under the 2014 Plan. As of December 31, 2024, 160,569 stock options remained outstanding under the 2014 Plan.
The Clene Inc. 2020 Amended Stock Plan (the “2020 Plan”) was adopted in December 2020 and amended in May 2023 and May 2024. Currently, 2,420,000 shares of Common Stock are reserved for issuance thereunder. As of December 31, 2024, a total of 1,837,463 stock options and other stock awards had been granted under the 2020 Plan and 582,537 shares remained available for future grant.
Stock-Based Compensation Expense
Stock-based compensation expense recorded in research and development expense and general and administrative expense during the years ended December 31, 2024 and 2023 was as follows:
| Year Ended December 31, | ||||||||
| (in thousands) | 2024 | 2023 | ||||||
| General and administrative | $ | 4,407 | $ | 5,056 | ||||
| Research and development | 3,546 | 4,061 | ||||||
| Total stock-based compensation expense | $ | 7,953 | $ | 9,117 | ||||
Stock-based compensation expense by award type during the years ended December 31, 2024 and 2023 was as follows:
| Year Ended December 31, | ||||||||
| (in thousands) | 2024 | 2023 | ||||||
| Stock options | $ | 8,127 | $ | 9,079 | ||||
| Stock awards | (174 | ) | 38 | |||||
| Total stock-based compensation expense | $ | 7,953 | $ | 9,117 | ||||
Stock Options
Outstanding stock options and related activity during the year ended December 31, 2024 was as follows:
| (in thousands, except share, per share, and term data) | Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Term (Years) | Intrinsic Value | ||||||||||||
| Outstanding – December 31, 2023 | 1,092,343 | $ | 45.20 | 7.28 | $ | 302 | ||||||||||
| Granted | 975,671 | 6.90 | 9.49 | — | ||||||||||||
| Exercised | (41,090 | ) | 3.00 | — | 95 | |||||||||||
| Forfeited | (20,902 | ) | 77.76 | — | — | |||||||||||
| Expired | (61,770 | ) | — | — | — | |||||||||||
| Outstanding – December 31, 2024 | 1,944,252 | $ | 27.90 | 8.24 | $ | 59 | ||||||||||
| Vested and exercisable – December 31, 2024 | 857,384 | $ | 46.17 | 7.18 | $ | 45 | ||||||||||
| Vested, exercisable or expected to vest – December 31, 2024 | 1,944,252 | $ | 27.90 | 8.24 | $ | 59 | ||||||||||
As of December 31, 2024 and 2023, we had approximately $8.3 million and $13.7 million, respectively, of unrecognized stock-based compensation costs related to non-vested stock options that is expected to be recognized over a weighted-average period of 1.70 years and 2.10 years, respectively. Our unrecognized stock-based compensation costs excludes $2.8 million of stock options that vest based on performance conditions that we assessed as less than probable as of December 31, 2024. As of December 31, 2023, we had not granted stock options with performance conditions.
The weighted-average grant-date fair value of stock options granted during the year ended December 31, 2024 and 2023 was $5.95 and $14.60, respectively. The assumptions used to calculate the fair value of stock options granted during the year ended December 31, 2024 and 2023 were as follows:
| Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Expected stock price volatility | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
| Expected dividend yield | 0.00 | % | 0.00 | % | ||||
| Expected term of options (in years) | ||||||||
Stock Awards
Stock awards include rights to restricted stock awards with market-based vesting conditions and restricted stock units with service-based vesting conditions. Outstanding stock awards and related activity during the year ended December 31, 2024 was as follows:
| Number of Stock Awards | Weighted Average Grant Date Fair Value | |||||||
| Unvested balance – December 31, 2023 | 38,943 | $ | 194.41 | |||||
| Converted to shares of Common Stock upon vesting | (543 | ) | 23.00 | |||||
| Forfeited | (959 | ) | 196.84 | |||||
| Unvested balance – December 31, 2024 | 37,441 | $ | 196.84 | |||||
As of December 31, 2024, we had unrecognized stock-based compensation costs related to non-vested stock awards. As of December 31, 2023, we had approximately $11,000 of unrecognized stock-based compensation costs related to non-vested stock award expected to be recognized over a weighted-average period of 0.23 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.