KalVista Pharmaceuticals, Inc. Stock Compensation Disclosure

Note 8. Stock-Based Compensation

The Company has four plans that provide for equity-based compensation. Two are legacy plans for which no further grants are to be made. As of April 30, 2025, 1,466,813 stock awards remain available for grant under the 2017 Equity Incentive Plan (“2017 Plan”). There are 8,916,060 shares of the Company’s common stock that are reserved for issuance upon exercise or settlement of stock options or other awards under these four plans. Initial awards generally vest 25% after one year and then ratably on a monthly basis over the next three years. Recurring grants typically vest on a monthly basis over four years. Stock option grants expire after ten years.

In July 2021, the Company approved the 2021 Equity Inducement Plan to reserve 350,000 shares of its common stock to be used exclusively for grants of awards as a material inducement to such individuals' entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. In June 2023, the Company amended and restated the 2021 Equity Inducement Plan (the “Amendment and Restated 2021 Equity Inducement Plan”) to register 500,000 additional shares of its common stock. As of April 30, 2025 there were 234,223 shares remaining available to be issued under the 2021 Inducement Plan.

In June 2024, the Company amended and restated the 2021 Equity Inducement Plan to register 600,000 additional shares of its common stock.

The Company has in place the 2017 Employee Stock Purchase Plan (“ESPP”), under which employees have the option to purchase the Company’s common stock at a discount of 15% from the market price during predetermined offering periods each year. There are 1,641,743 shares available for future issuance under the ESPP as of April 30, 2025.

The Company recognizes stock-based compensation expense over the requisite service period based on the grant date fair value of the award. The Company has elected to use the Black-Scholes option pricing model to determine the fair value of awards granted. The determination of the fair value of stock-based awards utilizing the Black-Scholes model is affected by the share price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The Company determined the expected volatility by using available historical price information. The expected life of the awards is estimated based on the simplified method. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of the awards. The dividend yield assumption is based on history and expectation of paying no dividends. Forfeitures have not been material in the periods presented.

The weighted-average grant date fair value of stock options granted during the years ended April 30, 2025 and 2024 was $7.75 and $7.57, respectively. The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during the years ended April 30, 2025 and 2024 was $2.5 million and $0.1 million, respectively. The total cash received by the Company as a result of employee stock option exercises during the years ended April 30, 2025 and 2024 was $5.0 million and $0.2 million, respectively.

As of April 30, 2025, there was $12.2 million of unrecognized compensation expense related to unvested options, which is expected to be recognized over a weighted-average period of 2.9 years.

Restricted Stock Units

During the fiscal year ended April 30, 2025, the Company granted both executives and employees Restricted Stock Units (“RSUs”) from the 2017 Equity Incentive Plan. All RSUs granted are subject to a service condition, and vest over a three or four-year period with equal quarterly vesting.

As of April 30, 2025, the unrecognized stock-based compensation cost related to the RSUs was $24.8 million, which is expected to be recognized over a weighted-average period of 3.46 years.

Performance Stock Units

In January 2023, the Company granted 360,000 PSUs to executives under the 2017 Equity Incentive Plan with a grant date fair value of $6.82. The performance-based metric for the awards is the FDA approval of a New Drug Application for sebetralstat. Upon successful completion of the performance metric, 100% of the PSUs will vest in full. As of April 30, 2025 the Company has not recognized any compensation expense related to these awards as the achievement of the Performance Metric is not yet deemed to be probable. As of April 30, 2025, 182,500 PSUs from this grant have been forfeited and 177,500 shares remain outstanding.

In June 2023, the Company granted 306,667 PSUs to executives under the 2017 Equity Incentive Plan with a grant date fair value of $9.99. The performance-based metric for the awards was the full enrollment for the KVD900-301 clinical trial. This performance metric was certified by the Compensation Committee of the Company's Board of Directors in July 2023, with twelve months of quarterly vesting beginning in August 2023. As of April 30, 2025, $3.0 million of expense from these awards has been recognized, including $0.03 million of expense recognized in the year ended April 30, 2025. As of April 30, 2025, there were no shares outstanding.

In January 2024, the Company granted 306,667 PSUs to seven executives under the 2017 Equity Incentive Plan with a grant date fair value of $12.71. The performance-based metric for the executive awards was the success of the Company’s Phase 3 clinical trial of the sebetralstat program. This performance metric was certified by the Compensation Committee of the Company's Board of Directors in February 2024, with twelve months of quarterly vesting beginning in February 2024. As of the year ended April 30, 2025, the cumulative expense from these awards has been recognized. As of April 30, 2025, there were no shares outstanding.

In January 2024, the Company granted 81,000 PSUs to six non-executives under the 2017 Equity Incentive Plan with a grant date fair value of $12.85. The performance-based metrics for the non-executive awards is the successful NDA filing for sebetralstat program and the FDA approval of the NDA. Upon successful completion of the NDA filing metric, which occurred in June 2024, 25% of the PSUs vested, with the remaining 75% of the PSUs vesting upon successful completion of the NDA approval metric. As of April 30, 2025, the Company has not recognized any of the remaining compensation expense related to these awards as the achievement of the Performance Metrics for the remaining 75% of the PSUs vesting have not yet occurred. As of April 30, 2025, there were 60,750 shares outstanding.