Laird Superfood, Inc. Stock Compensation Disclosure
| 10. | Stock Incentive Plan |
The Company adopted an incentive plan (the “2020 Plan”) on September 22, 2020, to provide for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards and cash bonus awards to Company employees, employees of the Company’s affiliates, non-employee directors and certain consultants and advisors. In May 2024, the Company’s shareholders approved an amendment to the 2020 Plan to reserve an additional 1,536,742 shares for issuance. As of December 31, 2025, the Company was authorized to award 1,202,649 shares in future issuances under the 2020 Plan and 2,114,117 shares are outstanding and issuable upon vesting and exercise of outstanding options and rights. Previously, the Company had adopted its 2018 Equity Incentive Plan and 2016 Stock Incentive Plan (together with the 2020 Plan, the “Stock Incentive Plans”), under which the Company had issued stock options and RSUs. Following the effective date of the 2020 Plan, no additional awards may be made under the 2018 Equity Incentive Plan or 2016 Stock Incentive Plan. The Stock Incentive Plans were established to provide eligible individuals with an incentive to contribute to the Company’s success and to operate and manage the Company’s business in a manner that will provide for its long-term growth and profitability and that will benefit the Company’s shareholders and other stakeholders, including employees and customers. The Stock Incentive Plans are also intended to provide a means of recruiting, rewarding, and retaining key personnel.
Stock Options
The Stock Incentive Plans prescribe various terms and conditions for the award of options and the total number of shares authorized for this purpose. For options, the strike price is equal to the fair market value of the Company’s stock price at the date of grant. Generally, options become exercisable based on years of service and vesting schedules, and expire after (i) a period of ten years from the date of grant, (ii) three months following the date of termination of employment from the Company, (iii) one year following the date of termination from the Company by reason of death or disability, (iv) the date of termination of employment for cause, or (v) the fifth anniversary of the date of the grant if it is held by a 10 percent or greater stockholder.
The following tables summarize the Company’s stock option activity:
| Weighted | Weighted | |||||||||||||||
| Average | Average | |||||||||||||||
| Options | Exercise Price | Contractual | Aggregate | |||||||||||||
| Activity | (per share) | Term (years) | Intrinsic Value | |||||||||||||
| Balance at January 1, 2025 | 1,630,428 | $ | 3.47 | 7.77 | $ | 8,770,109 | ||||||||||
| Granted | — | $ | — | — | $ | — | ||||||||||
| Exercised/released (1) | (100,000 | ) | $ | 0.91 | — | $ | — | |||||||||
| Cancelled/forfeited | (44,000 | ) | $ | 0.73 | — | $ | — | |||||||||
| Balance at December 31, 2025 | 1,486,428 | $ | 3.73 | 6.66 | $ | 1,429,670 | ||||||||||
| Exercisable at December 31, 2025 | 713,106 | $ | 6.21 | 5.50 | $ | 381,787 | ||||||||||
(1) Includes 15,007 shares of common stock which were used to cover the strike price in cashless net share settlements.
| Weighted | Weighted | |||||||||||||||
| Average | Average | |||||||||||||||
| Options | Exercise Price | Contractual | Aggregate | |||||||||||||
| Activity | (per share) | Term (years) | Intrinsic Value | |||||||||||||
| Balance at January 1, 2024 | 1,234,778 | $ | 4.52 | 7.91 | $ | 30,000 | ||||||||||
| Granted | 799,188 | $ | 0.73 | — | $ | — | ||||||||||
| Exercised/released (1) | (300,250 | ) | $ | 1.12 | — | $ | — | |||||||||
| Cancelled/forfeited | (103,288 | ) | $ | 1.61 | — | $ | — | |||||||||
| Balance at December 31, 2024 | 1,630,428 | $ | 3.47 | 7.77 | $ | 8,770,109 | ||||||||||
| Exercisable at December 31, 2024 | 516,040 | $ | 7.02 | 5.81 | $ | 1,573,308 | ||||||||||
(1) Includes 86,643 shares of common stock which were used to cover the strike price in cashless net share settlements.
The aggregate intrinsic value in the tables above, which is the amount by which the market value of the underlying stock exceeded the exercise price of outstanding options, is before applicable income taxes and represents the amount optionees would have realized if all in-the-money options had been exercised on the last business day of the period indicated.
The total intrinsic value of options vested was $394,452 and $682,988 in the years ended December 31, 2025 and 2024, respectively. The total intrinsic value of options exercised was $450,713 and $596,943 the years ended December 31, 2025 and 2024, respectively.
The Company estimates the fair value of each stock option award on the date of grant using a Black-Scholes option-pricing model. ASC 718, Compensation - Stock Compensation (“ASC 718”), requires the use of the fair-value-based method for measuring the value of stock-based compensation. The estimated fair value of each grant of stock options awarded during the years ended December 31, 2025 and 2024 was determined using the following assumptions:
| • | Expected Volatility. The expected volatility is based on the volatility of the historical stock prices of identified peer companies. |
| • | Expected Term. Due to the lack of a public market for the trading of shares of the Company’s common stock prior to the Company’s initial public offering that closed on September 25, 2020, and the lack of sufficient Company-specific historical data, the expected term of employee stock options is determined using the “simplified” method, as prescribed in SEC Staff Accounting Bulletin No. 107, Share Based Payments, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option. |
| • | Risk-free Interest Rate. The risk-free interest rate is based on the interest rate payable on United States Treasury yield curve in effect at the time of grant for a period that is commensurate with the assumed expected term. |
| • | Dividend Yield. The dividend yield is 0% because the Company has never paid, and for the foreseeable future does not expect to pay, dividend on its shares of common stock. |
The inputs and assumptions used to estimate the fair value of share-based payment awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different inputs and assumptions, the Company’s share-based compensation expense could be materially different for future awards. The grant-date fair value of stock options was estimated at the time of grant using the following weighted-average inputs and assumptions in the Black-Scholes option pricing model:
| 2024 | ||||
| Weighted-average expected volatility | 61.92 | % | ||
| Weighted-average expected term (years) | 6.50 | |||
| Weighted-average expected risk-free interest rate | 4.27 | % | ||
| Dividend yield | — | |||
| Weighted-average fair value of options granted | $ | 0.46 | ||
There were no stock options granted in the year ended December 31, 2025.
Restricted Stock Units
The following tables summarize the Company’s RSU activity:
| Weighted Average | Weighted Average | |||||||||||||||
| RSU | Grant Date Fair | Remaining Vesting | Aggregate | |||||||||||||
| Activity | Value (per share) | Term (years) | Fair Value | |||||||||||||
| Balance at January 1, 2025 | 1,115,498 | $ | 3.85 | 3.26 | $ | 4,294,241 | ||||||||||
| Granted | 114,760 | $ | 5.88 | — | $ | — | ||||||||||
| Exercised/released (1) | (369,366 | ) | $ | 4.14 | — | $ | — | |||||||||
| Cancelled/forfeited | (16,084 | ) | $ | 4.39 | — | $ | — | |||||||||
| Balance at December 31, 2025 | 844,808 | $ | 4.04 | 2.56 | $ | 3,408,858 | ||||||||||
(1) Includes 59,685 shares of common stock which were withheld to cover payroll taxes.
| Weighted Average | Weighted Average | |||||||||||||||
| RSU | Grant Date Fair | Remaining Vesting | Aggregate | |||||||||||||
| Activity | Value (per share) | Term (years) | Fair Value | |||||||||||||
| Balance at January 1, 2024 | 771,885 | $ | 1.77 | 2.18 | $ | 1,480,161 | ||||||||||
| Granted | 828,650 | $ | 4.43 | — | $ | — | ||||||||||
| Exercised/released (1) | (422,471 | ) | $ | 1.55 | — | $ | — | |||||||||
| Cancelled/forfeited | (62,566 | ) | $ | 1.27 | — | $ | — | |||||||||
| Balance at December 31, 2024 | 1,115,498 | $ | 3.85 | 3.26 | $ | 4,294,241 | ||||||||||
(1) Includes 16,699 shares of common stock which were withheld to cover payroll taxes.
The Company estimates the fair value of each RSU using the fair value of the Company’s stock on the date of grant for the purposes of calculating compensation costs. The total vest date fair value of RSUs vested was $2,401,417 and $1,135,692 in the years ended December 31, 2025 and 2024, respectively.
Restricted Stock
During the year ended December 31, 2025, the Company issued 7,717 shares of restricted stock to a contractor for services rendered, at a fair value of $7.40 per share, with a remaining vesting term of 0.57 years. The Company estimates the fair value of each share of restricted stock using the fair value of the Company’s common stock on the date of grant for the purposes of calculating compensation costs. The fair value of shares of restricted stock that were granted during the years ended December 31, 2025 and 2024 was $57,106 and $0, respectively.
Market-Based Stock Units
The following tables summarize the Company’s market-based stock unit (“MSU”) activity:
| Weighted Average | Weighted Average | |||||||||||||||
| MSU | Grant Date Fair | Remaining Vesting | Aggregate | |||||||||||||
| Activity | Value (per share) | Term (years) | Fair Value | |||||||||||||
| Balance at January 1, 2024 | 621,314 | $ | 1.57 | 0.60 | $ | 977,558 | ||||||||||
| Granted | — | $ | — | — | $ | — | ||||||||||
| Exercised/released | (300,000 | ) | $ | 0.14 | — | $ | — | |||||||||
| Cancelled/forfeited | (321,314 | ) | $ | 2.91 | — | $ | — | |||||||||
| Balance at December 31, 2024 | — | $ | — | — | $ | — | ||||||||||
These MSUs vested upon the 30-day weighted average stock price reaching or exceeding established targets, after reaching certain time targets. We estimated the grant-date fair value of the MSUs using a Monte Carlo simulation which required assumptions for expected volatility, risk-free rate of return and dividend yield. Expected volatility within the index were derived using historical volatility of a selected peer group over a period equal to the length of the performance period. We based the risk-free rate of return on the yield of a zero-coupon U.S. Treasury bond with a maturity equal to the performance period and assumed a 0% dividend rate. Compensation expense for these MSUs was recognized over the requisite service period regardless of whether the market conditions are satisfied.
The total vest date fair value of MSUs vested was $1,276,000 in the year ended December 31, 2024. No MSUs were granted in the year ended December 31, 2024. There were no outstanding MSUs as of December 31, 2024.
Stock-Based Compensation
Stock-based compensation expense is recognized ratably over the requisite service period for all awards. The following tables summarize the Company’s stock-based compensation recorded as a result of applying the provisions of ASC 718 to equity awards:
| Year Ended | Unrecognized Compensation Cost Related to Non-Vested Awards as of | Weighted-Average Remaining Vesting Period as of | ||||||||||
| December 31, 2025 | December 31, 2025 | December 31, 2025 (years) | ||||||||||
| Stock options | $ | 315,330 | $ | 284,365 | 2.55 | |||||||
| RSUs | 1,543,217 | 2,525,091 | 2.84 | |||||||||
| Other | 24,966 | 32,141 | 0.57 | |||||||||
| Total stock-based compensation | $ | 1,883,513 | $ | 2,841,597 | 2.78 | |||||||
| Cost of goods sold | $ | 26,720 | $ | 21,008 | 1.87 | |||||||
| General and administrative | 1,736,070 | 2,523,586 | 2.80 | |||||||||
| Sales and marketing | 120,723 | 297,003 | 2.70 | |||||||||
| Total stock-based compensation | $ | 1,883,513 | $ | 2,841,597 | 2.78 | |||||||
| Year Ended | Unrecognized Compensation Cost Related to Non-Vested Awards as of | Weighted-Average Remaining Vesting Period as of | ||||||||||
| December 31, 2024 | December 31, 2024 | December 31, 2024 (years) | ||||||||||
| Stock options | $ | 345,129 | $ | 619,880 | 2.73 | |||||||
| RSUs | 1,264,920 | 3,464,390 | 3.55 | |||||||||
| Other | 27,739 | — | — | |||||||||
| Total stock-based compensation | $ | 1,637,788 | $ | 4,084,270 | 3.42 | |||||||
| Cost of goods sold | $ | 3,650 | $ | 9,648 | 3.88 | |||||||
| General and administrative | 1,494,315 | 3,807,481 | 3.49 | |||||||||
| Sales and marketing | 139,823 | 267,141 | 4.41 | |||||||||
| Total stock-based compensation | $ | 1,637,788 | $ | 4,084,270 | 3.42 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 30, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2022 | Mar 16, 2023 | |
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.