New Horizon Aircraft Ltd. Stock Compensation Disclosure
NOTE 13. Stock-based Compensation
In August 2022, the Company established a Stock Option Plan, superseded by the 2023 Equity Incentive Plan (the “Option Plan”), under which the Company’s Board of Directors may, from time-to-time, in its discretion, grant stock options to directors, officers, consultants and employees of the Company.
Stock options outstanding vest in equal tranches over a period of three years. During the year-ended May 31, 2025, the Company granted 1,520,000 stock options (May 31, 2024 – 100,000). The Company estimated the fair value of the stock options on the date of grant using the Black-Scholes option-pricing model with the following assumptions:
| May 31, 2025 | May 31, 2024 | |||||||
| Stock price | USD$ | 0.27 - 0.61 | USD$ | 0.85 | ||||
| Risk-free interest rate | 3.8% - 4.5 | % | 4.5 | % | ||||
| Term (years) | 5 | 5 | ||||||
| Volatility | 76 | % | 85 | % | ||||
| Forfeiture rate | 0 | % | 0 | % | ||||
| Dividend yield | 0 | % | 0 | % | ||||
A summary of stock option activity for the Company is as follows:
| Number of Shares | Weighted Average Exercise Price (USD) | Weighted Average Remaining Contractual Life (years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding stock options May 31, 2024 | 685,230 | $ | 0.60 | 6.5 | $ | 139 | ||||||||||
| Issued October 4, 2024 | 180,000 | $ | 0.27 | 9.6 | $ | 196 | ||||||||||
| Issued February 3, 2025 | 1,340,000 | $ | 0.61 | 9.9 | $ | 830 | ||||||||||
| Outstanding stock options May 31, 2025 | 2,205,230 | $ | 0.58 | 8.4 | $ | 1,340 | ||||||||||
| Exercisable as of May 31, 2025 | 425,820 | $ | 0.57 | 5.5 | $ | 289 | ||||||||||
During the year-ended May 31, 2025, the Company recorded stock-based compensation expenses of $253 (May 31, 2024 - $66) relating to stock options and $677 relating to shares issued for services (May 31, 2024 – ). The weighted average grant date fair value of the stock options issued was $0.61 USD (May 31, 2024 - $0.59 USD).
On February 3, 2025, the Company issued 335,000 Performance Share Units (“PSU’s”) that vest upon achievement of 100% Total Shareholder Return. The Company has determined that this vesting condition is highly probable and accordingly has recognized the entirety of the associated $562 in compensation costs related to these PSU’s during the year-ended May 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 22, 2025 | Showing above |
| 2024 | Aug 15, 2024 | |
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.