INTELLINETICS, INC. Stock Compensation Disclosure
From time to time, we issue stock options and restricted stock as compensation for services rendered by our directors and employees.
Restricted Stock
On March 28, 2025, we granted shares of restricted common stock to certain employees. The grants of restricted common stock were made in accordance with the 2015 Plan and 2024 Plan and were subject to vesting, as follows: shares vested on March 28, 2025; shares vest on March 28, 2026, and shares vest on March 28, 2027. As of March 28, 2025, shares, representing an amount of $83,299, were surrendered to the Company by grant recipients in satisfaction of tax withholding obligations, and subsequently cancelled.
On March 19, 2024, we granted shares of restricted common stock to certain employees. The grants of restricted common stock were made in accordance with the 2015 Plan and were subject to vesting, as follows: shares vested on March 19, 2024; shares vest on April 2, 2025, and shares vest on April 2, 2026. As of April 2, 2025, shares, representing an amount of $179,925, were surrendered to the Company by grant recipients in satisfaction of tax withholding obligations, and subsequently cancelled. As of April 2, 2024, shares, representing an amount of $69,526 were surrendered to the Company by grant recipients in satisfaction of tax withholding obligations, and subsequently cancelled.
Stock compensation is being recognized over the vesting period. For the year ended December 31, 2025 and 2024, $895,433 and $805,955, respectively, was recorded on the issuance of the common stock.
Stock Options
On June 21, 2025, we granted non-employee directors stock options to purchase shares at an exercise price of $ per share under the 2023 Non-Employee Director Compensation Plan. The options fully vested upon grant. The total fair value of $ for these stock options was recognized as expense upon grant.
The weighted-average grant date fair value of options granted during the twelve months ended December 31, 2025 was $. The assumptions that were used in calculating such values, were based on estimates at the grant date in the table as follows:
| Grant Date June 21, 2025 | ||||
| Risk-free interest rate | % | |||
| Expected term | years | |||
| Expected volatility | % | |||
| Expected dividend yield | % | |||
On August 16, 2024, we granted non-employee directors stock options to purchase shares at an exercise price of $ per share, the fair market value of the shares on the grant date, under the 2023 Non-Employee Director Compensation Plan, with % vesting upon grant. The total fair value of $ for these stock options was recognized upon grant. On September 4, 2024, we granted employees stock options to purchase shares at an exercise price of $ per share, the fair market value of the shares on the grant date, under the 2015 Plan, with annual vesting through 2027 based on service time. The total fair value of $ for these stock options is being recognized over the vesting period.
The weighted-average grant date fair value of options granted during the twelve months ended December 31, 2024 was $. The assumptions that were used in calculating such values, were based on estimates at the grant date in the table as follows:
| Grant Date August 16, 2024 | Grant Date September 4, 2024 | |||||||
| Risk-free interest rate | % | % | ||||||
| Weighted average expected term | years | years | ||||||
| Expected volatility | % | % | ||||||
| Expected dividend yield | % | % | ||||||
| Weighted- | |||||||||||||
| Weighted- | Average | ||||||||||||
| Average | Remaining | ||||||||||||
| Shares | Exercise | Contractual | |||||||||||
| Under Option | Price | Life | |||||||||||
| Outstanding at January 1, 2025 | 374,411 | $ | 6.22 | years | |||||||||
| Granted | 27,000 | 12.88 | |||||||||||
| Exercised | (37,488 | ) | 5.13 | ||||||||||
| Forfeited | (1,700 | ) | 10.12 | ||||||||||
| Outstanding at December 31, 2025 | 362,233 | $ | 6.81 | years | |||||||||
| Exercisable at December 31, 2025 | 353,647 | $ | 6.73 | years | |||||||||
| Weighted- | |||||||||||||
| Weighted- | Average | ||||||||||||
| Average | Remaining | ||||||||||||
| Shares | Exercise | Contractual | |||||||||||
| Under Option | Price | Life | |||||||||||
| Outstanding at January 1, 2024 | 357,887 | $ | 5.69 | years | |||||||||
| Granted | 50,500 | 9.16 | |||||||||||
| Exercised | (29,976 | ) | 5.07 | ||||||||||
| Forfeited | (4,000 | ) | 4.63 | ||||||||||
| Outstanding at December 31, 2024 | 374,411 | $ | 6.22 | years | |||||||||
| Exercisable at December 31, 2024 | 284,912 | $ | 6.06 | years | |||||||||
During the years ended December 31, 2025 and 2024, stock-based compensation for options was $ and $, respectively.
As of December 31, 2025 and 2024, there was $ and $, respectively, of total unrecognized compensation costs related to stock options granted under our stock option agreements. The unrecognized compensation cost is expected to be recognized over a weighted-average period of one year. The total fair value of stock options that vested during the years ended December 31, 2025 and 2024 was $ and $, respectively.
Issues of Stock Option Compensation
| Grant date | Shares granted (canceled) | Exercise price | Date fully vested | Fair value | ||||||||||||
| February 10, 2016 | 4,200 | $ | 48.00 | $ | 174,748 | |||||||||||
| December 6, 2016 | 2,000 | 38.00 | 63,937 | |||||||||||||
| September 25, 2017 | 15,000 | 15.00 | 194,149 | |||||||||||||
| September 25, 2017 | 10,000 | 19.00 | 126,862 | |||||||||||||
| January 30, 2019 | 250 | 45.00 | 885 | |||||||||||||
| March 11, 2019 | (33,200 | ) | - | |||||||||||||
| March 11, 2019 | 33,200 | 6.50 | 24,898 | (1) | ||||||||||||
| March 11, 2019 | 10,100 | 6.50 | 44,591 | |||||||||||||
| September 2, 2020 | 99,000 | 4.00 | 327,181 | |||||||||||||
| April 14, 2022 | 220,587 | 6.08 | 1,152,470 | |||||||||||||
| August 16, 2024 | 36,000 | 8.78 | 241,735 | |||||||||||||
| September 4, 2024 | 14,500 | 10.12 | 118,347 | |||||||||||||
| June 21, 2025 | 27,000 | 12.88 | 246,282 | |||||||||||||
| (1) | Represents incremental fair value of replacement shares compared to canceled shares. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 30, 2026 | Showing above |
| 2024 | Mar 24, 2025 | |
| 2023 | Mar 28, 2024 | |
| 2022 | Mar 27, 2023 | |
| 2021 | Mar 24, 2022 | |
| 2017 | Apr 2, 2018 | |
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.