Cadrenal Therapeutics, Inc. Stock Compensation Disclosure

Note 7. Equity-Based Compensation

 

The Company adopted the Cadrenal Therapeutics, Inc. 2022 Equity Incentive Plan (the “Initial Plan”), on July 11, 2022, which was later amended and restated on October 16, 2022, for purposes of clarifying the application of certain of the rules of the Initial Plan to awards approved before such amendment and restatement of the Initial Plan and to facilitate the transition to the Cadrenal Therapeutics, Inc. 2022 Successor Equity Incentive Plan (the “Successor Plan”) for the issuance and approval of awards after consummation of the IPO. On October 16, 2022, the Board adopted and the Company’s stockholders approved the Cadrenal Therapeutics, Inc. 2022 Successor Equity Incentive Plan (the “2022 Plan”), which is a successor to and continuation of the Initial Plan and became effective on January 19, 2023. Upon the effectiveness of the 2022 Plan, it replaced the Initial Plan, except with respect to awards outstanding under the Initial Plan, and no further awards will be available for grant under the Initial Plan.

 

Subject to certain adjustments, the maximum number of shares of common stock that could have been issued under the Initial Plan and 2022 Plan was initially 133,333 shares. The maximum number of shares of common stock that may be issued under the 2022 Plan will automatically increase on January 1 of each calendar year for a period of ten years commencing on January 1, 2024 and ending on (and including) January 1, 2033, to a number of shares of common stock equal to 20% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year; provided, however that the board of directors, or the compensation committee, may act prior to January 1 of a given calendar year to provide that the increase for such year will be a lesser number of shares of common stock. On January 1, 2024, the maximum number of shares of common stock that may be issued under the 2022 Plan increased to 173,636. On July 29, 2024, the Company held its 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”). At the 2024 Annual Meeting, the Company’s stockholders approved an amendment to the 2022 Plan to increase the number of shares of the Company’s common stock that will be available for awards under the 2022 Plan by 133,333 shares to 306,969 shares and to amend the “evergreen provision” such that the number of reserved shares of common stock available for issuance each year will be 20% of: (i) the shares of common stock outstanding at December 31; plus (ii) the shares of common stock issuable upon exercise of warrants and pre-funded warrants outstanding at December 31. As of December 31, 2025, 67,813 remained available for future issuance. All available shares may be utilized toward the grant of any type of award under the 2022 Plan.

 

Weighted average assumptions used in the Black-Scholes model are set forth below:

 

			Year Ended December 31, 2025				Year Ended December 31, 2024
Risk-free interest rate			3.54%  - 4.40	%			4.09% - 4.83	%
Dividend yield			-				-
Expected term (years)			5.27 - 5.89				5.27 - 5.31
Volatility			73.0% - 75.4	%			76.4% - 77.7	%

Activity under the Plans for the period from December 31, 2024 to December 31, 2025 is set forth below:

 

		Number Outstanding				Weighted- Average Exercise Price Per Share				Weighted- Average Remaining Contractual Life (Years)				Aggregate Intrinsic Value
Outstanding at December 31, 2024			156,334			$	13.20				8.35			$	420,720
Granted			285,000				19.58				8.45				-
Exercised			(6,667	)			9.60				-				-
Canceled/forfeited/expired			(31,667	)			17.84				-				-
Outstanding at December 31, 2025			403,000			$	17.41				8.51			$	299,096
Options vested and exercisable at December 31, 2025			167,305			$	15.45				7.83			$	-
Options vested and expected to vest as of December 31, 2025			403,000			$	17.41				8.51			$	-

 

The weighted average grant date fair value of options granted during the year ended December 31, 2025 was $12.80. At December 31, 2025, the Company had $2.3 million of unrecognized stock-based compensation expense related to stock options which will be recognized over the weighted average remaining requisite service period of 1.9 years. The Company settles employee stock option exercises with newly issued shares of common stock.

  

Total stock-based compensation expense and the allocation of stock-based compensation for the periods presented were as follows:

 

		Years Ended December 31,
		2025				2024
General and administrative		$	1,459,585			$	1,030,657
Research and development			480,311				388,382
Total equity-based compensation		$	1,939,896			$	1,419,039