CANTALOUPE, INC.CTLP
CANTALOUPE, INC. Stock Compensation Disclosure
STOCK-BASED COMPENSATION
STOCK COMPENSATION PLANS
The Company has had three stock-based compensation plans as shown in the table below:
| Date Approved | Name of Plan | Type of Plan | Authorized Shares | |||||||||||||||||
| June 2014 | 2014 Stock Option Incentive Plan | Stock options | 750,000 | |||||||||||||||||
| June 2015 | 2015 Equity Incentive Plan | Stock & stock options | 1,250,000 | |||||||||||||||||
| April 2018 | 2018 Equity Incentive Plan | Stock & stock options | 10,000,000 | |||||||||||||||||
| 12,000,000 | ||||||||||||||||||||
As of June 30, 2025, the Company may no longer grant new awards under the 2014 and Stock Option Incentive Plan and the 2015 Equity Incentive Plan. Stock options issued under these plans continue through their expiration date which is seven years from their respective grant date.
As of June 30, 2025, the Company had reserved shares of common stock for future issuance for the following:
| Common Stock | Reserved Shares | |||||||
| Conversions of Preferred Stock and cumulative Preferred Stock dividends | 96,137 | |||||||
Issuance of shares to former executive upon the occurrence of a Cantaloupe transaction (1) | 140,000 | |||||||
| Total shares reserved for future issuance | 236,137 | |||||||
(1)Represents 140,000 shares issuable to our former executive upon the occurrence of a "USA Transaction" as such term is defined in the stock agreement.
As of June 30, 2025, the Company had the 3,854,289 shares available for issuance under the 2018 Equity Incentive Plan.
STOCK OPTIONS
Stock options are granted at exercise prices equal to the fair market value of the Company's common stock at the date of grant. The options typically vest over a three-year period and each option, if not exercised or terminated, expires on the anniversary of the grant date.
The Company estimates the grant date fair value of the stock options with service conditions (i.e., a condition that requires an employee to render services to the Company for a stated period of time to vest) it grants using a Black-Scholes valuation model. The Company’s assumption for expected volatility is based on its historical volatility data related to market trading of its own common stock. The Company uses the simplified method to determine expected term, as the Company does not have adequate historical exercise and forfeiture behavior on which to base the expected life assumption. The dividend yield assumption is based on dividends expected to be paid over the expected life of the stock option. The risk-free interest rate assumption is determined by using the U.S. Treasury rates of the same period as the expected option term of each stock option.
The fair value of options granted during the years ended June 30, 2025, 2024, and 2023 was determined using the following assumptions:
| For the year ended June 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Expected volatility | 49.5 - 50.5% | 52.6 - 69.7% | 74.6 - 77.6% | ||||||||||||||
| Expected life (years) | 4.5 | 4.2 - 4.5 | 4.4 - 4.6 | ||||||||||||||
| Expected dividends | 0.0% | 0.0% | 0.0% | ||||||||||||||
| Risk-free interest rate | 3.4 - 3.5% | 4.0 - 4.4% | 2.7 - 4.1% | ||||||||||||||
The following tables provide information about outstanding options for the years ended June 30, 2025, 2024, and 2023:
| For the year ended June 30, 2025 | |||||||||||||||||||||||
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Outstanding options, beginning of year | 3,971,834 | $ | 6.63 | 4.3 | $ | 3,582 | |||||||||||||||||
| Granted | 30,000 | $ | 6.86 | ||||||||||||||||||||
| Exercised | (111,000) | $ | 6.98 | $ | 285 | ||||||||||||||||||
| Forfeited | (13,333) | $ | 6.02 | ||||||||||||||||||||
| Expired | (12,667) | $ | 7.31 | ||||||||||||||||||||
Outstanding options, end of year | 3,864,834 | $ | 6.42 | 3.4 | $ | 17,374 | |||||||||||||||||
Exercisable options, end of year | 2,966,924 | $ | 6.86 | 3.1 | $ | 12,317 | |||||||||||||||||
| For the year ended June 30, 2024 | |||||||||||||||||||||||
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Outstanding options, beginning of year | 3,873,632 | $ | 6.35 | 5.1 | $ | 7,595 | |||||||||||||||||
| Granted | 175,000 | $ | 6.92 | ||||||||||||||||||||
| Exercised | (18,334) | $ | 6.06 | $ | — | ||||||||||||||||||
| Forfeited | (29,799) | $ | 6.90 | ||||||||||||||||||||
| Expired | (28,665) | $ | 4.40 | ||||||||||||||||||||
Outstanding options, end of year | 3,971,834 | $ | 6.63 | 4.3 | $ | 3,582 | |||||||||||||||||
Exercisable options, end of year | 2,602,259 | $ | 7.28 | 3.8 | $ | 1,085 | |||||||||||||||||
| For the year ended June 30, 2023 | |||||||||||||||||||||||
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Outstanding options, beginning of year | 3,529,833 | $ | 7.41 | 4.5 | $ | 194 | |||||||||||||||||
| Granted | 1,720,000 | $ | 4.61 | ||||||||||||||||||||
| Exercised | — | $ | — | $ | — | ||||||||||||||||||
| Forfeited | (1,376,201) | $ | 6.86 | ||||||||||||||||||||
| Expired | — | $ | — | ||||||||||||||||||||
Outstanding options, end of year | 3,873,632 | $ | 6.35 | 5.1 | $ | 7,595 | |||||||||||||||||
Exercisable options, end of year | 1,341,466 | $ | 7.26 | 3.9 | $ | 1,536 | |||||||||||||||||
The weighted average grant date fair value per share for the Company's stock options granted during the years ended June 30, 2025, 2024, and 2023 was $3.10, $4.02, and $2.89, respectively. The total fair value of stock options vested during the years ended June 30, 2025, 2024, and 2023 was $3.2 million, $4.5 million, and $3.8 million, respectively.
COMMON STOCK GRANTS
COMMON STOCK GRANTS
The Company makes annual grants of restricted shares of common stock to executive officers pursuant to long-term stock incentive plans (“LTIPs”) which vest annually, typically over three years.
The Company also grants restricted stock units ("RSU") to members of the board of directors as compensation for their service on the board as well as to employees as additional compensation. These stock awards typically vest over a to three-year period.
A summary of the status of the Company’s nonvested common shares and RSUs as of June 30, 2025, 2024, and 2023, and changes during the years then ended is presented below:
| Shares | Weighted-Average Grant-Date Fair Value | ||||||||||
| Nonvested at June 30, 2022 | 448,908 | $ | 7.00 | ||||||||
| Granted | 346,346 | 5.41 | |||||||||
| Vested | (274,011) | 5.96 | |||||||||
| Forfeited | (97,342) | 8.27 | |||||||||
| Nonvested at June 30, 2023 | 423,901 | 6.08 | |||||||||
| Granted | 439,363 | 6.72 | |||||||||
| Vested | (311,093) | 6.38 | |||||||||
| Forfeited | (4,207) | 7.58 | |||||||||
| Nonvested at June 30, 2024 | 547,964 | 6.41 | |||||||||
| Granted | 577,553 | 7.40 | |||||||||
| Vested | (295,062) | 6.08 | |||||||||
| Forfeited | (118,319) | 6.48 | |||||||||
| Nonvested at June 30, 2025 | 712,136 | $ | 7.33 | ||||||||
STOCK-BASED COMPENSATION EXPENSE
The Company applies the fair value method to recognize compensation expense for stock-based awards. Using this method, the estimated grant-date fair value of the award is recognized over the requisite service period using the accelerated attribution method. The Company accounts for forfeitures as they occur.
A summary of the Company's stock-based compensation expense recognized during the years ended June 30, 2025, 2024, and 2023 is as follows:
| ($ in thousands) | For the year ended June 30, | |||||||||||||||||||
| Award type | 2025 | 2024 | 2023 | |||||||||||||||||
| Stock options | $ | 1,196 | $ | 2,992 | $ | 2,967 | ||||||||||||||
| Stock grants | 2,812 | 2,117 | 1,770 | |||||||||||||||||
| Total stock-based compensation expense | $ | 4,008 | $ | 5,109 | $ | 4,737 | ||||||||||||||
The Company recognized tax benefits of $0.7 million, $0.5 million, and $1.4 million, related to stock compensation expense for the years ended June 30, 2025, 2024, and 2023, respectively.
A summary of the Company's unrecognized stock-based compensation expense as of June 30, 2025 is as follows:
| As of June 30, 2025 | ||||||||||||||
| Award type | Unrecognized Expense (in thousands) | Weighted Average Recognition Period (in years) | ||||||||||||
| Stock options | $ | 399 | 0.8 | |||||||||||
| Stock grants | $ | 2,848 | 1.6 | |||||||||||
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.