Inuvo, Inc. Stock Compensation Disclosure
Note 10 – Stock-Based Compensation
We maintain a stock-based compensation program intended to attract, retain and provide incentives for talented employees and directors and align stockholder and employee interests. During the 2025 and 2024 periods, we granted restricted stock units (“RSUs”) from the 2017 Equity Compensation Plan, as amended (“2017 ECP”) and the 2025 Omnibus Incentive Compensation Plan (“2025 Plan”). RSU vesting periods are generally up to three years and/or achieving certain financial targets.
On March 21, 2025, the Board of Directors adopted the 2025 Plan, approved by stockholders at the annual meeting held on May 22, 2025. The 2025 Plan replaced the 2017 ECP for purposes of new awards. All awards granted under the 2017 ECP prior to approval of the 2025 Plan remain outstanding and continue in full force and effect under the terms of the 2017 ECP; however, no new awards may be granted under the 2017 ECP following the effective date of the 2025 Plan.
As of December 31, 2025, shares subject to outstanding awards under the 2017 ECP and 2025 Plan were 625,979 and 154,000 shares, respectively. Shares available for future grant under the 2025 Plan at December 31, 2025, were 965,885.
As of December 31, 2025, the total share reserve authorized under 2025 Plan was 1,119,885 shares.
Compensation Expense
We recorded stock-based compensation expense for all equity incentive plans of $1,144,773 and $1,501,444 for the years ended December 31, 2025 and 2024, respectively. Total compensation cost not yet recognized at December 31, 2025 was $1,539,082 which will be recognized over the next three years.
The following table summarizes the stock grants outstanding under 2017 ECP and 2025 Plan as of December 31, 2025:
|
| Options Outstanding |
|
| RSUs Outstanding |
|
| Options and RSUs Exercised/Vested |
|
| Available Shares |
|
| Total Shares (Outstanding + Available) |
| |||||
Total |
|
| — |
|
|
| 779,979 |
|
|
| — |
|
|
| 965,885 |
|
|
| 1,745,864 |
|
The fair value of restricted stock units is determined using market value of the common stock on the date of the grant. The fair value of stock options is determined using the Black-Scholes-Merton valuation model. The use of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense and include the expected life of the option, stock price volatility, risk-free interest rate, dividend yield, exercise price, and forfeiture rate. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. The forfeiture rate, which is estimated at a weighted average of 0% of unvested options outstanding, is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate.
There were no options granted in the period ended December 31, 2025.
The following table summarizes our restricted stock unit activity for 2025:
|
| Restricted Stock Unit |
|
| Weighted Average Fair Value |
| ||
Outstanding, beginning of year |
|
| 1,321,602 |
|
| $ | 3.31 |
|
Granted |
|
| 212,500 |
|
| $ | 3.96 |
|
Vested |
|
| (646,851 | ) |
| $ | 3.45 |
|
Forfeited |
|
| (107,272 | ) |
| $ | 3.68 |
|
Outstanding, end of year |
|
| 779,979 |
|
| $ | 3.32 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 10, 2023 | |
| 2021 | Mar 17, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2017 | Feb 8, 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.