MNTN, Inc.MNTN
MNTN, Inc. Stock Compensation Disclosure
Stock-Based Compensation
Stock-Based Award Plans
In May 2025, the Company's board of directors adopted the 2025 Incentive Award Plan (the "2025 Plan"), which became effective in connection with the IPO. Under the 2025 Plan, 11,112,342 shares of the Company's Class A common stock were initially reserved for issuance and provide for a variety of stock-based compensation awards, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and other stock-based awards. The number of shares initially reserved for issuance or transfer pursuant to awards under the 2025 Plan will be increased by an annual increase on the first day of each fiscal year beginning in 2026 and ending in 2035, equal to the lesser of (a) 5% of shares of the Company's common stock outstanding (on an as converted Class A common stock basis) or underlying outstanding warrants to purchase our common stock that have an exercise price of $0.10 per share or less, in each case, on the last day of the immediately preceding fiscal year and (b) such smaller number of shares of stock as determined by the Company's board of directors; provided, however, that no more than 82,898,071 shares of Class A common stock may be issued upon the exercise of incentive stock options. As of December 31, 2025, 10,070,891 shares were available for future issuance under the 2025 Plan.
In connection with the effectiveness of the 2025 Plan, the previously maintained 2021 Equity Incentive Plan (“2021 Plan”) terminated and no further awards will be granted under the 2021 Plan. However, all outstanding awards continue to be governed by their existing terms.
The 2025 Plan permits the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock units, and other stock-based awards to employees, directors and consultants at the sole discretion of the Board of Directors. The Company’s Board of Directors administers the 2025 Plan, selects the individuals to whom awards will be granted, and determines the number of awards to be granted and the terms and conditions of each award. Options and stock appreciation rights granted pursuant to the terms of the 2025 Plan cannot be granted with an exercise price of less than 100% of the fair market value of the underlying stock on the date of grant (110% if an incentive stock option is granted to a 10% or more stockholder of the Company). The term of an option or stock appreciation right shall not exceed ten years (five years if an incentive stock option is granted to a 10% or more stockholder of the Company).
Stock Options
A summary of the Company’s stock option activity, under all of its incentive plans for the year ended December 31, 2025, excluding the Performance Options discussed further below, is as follows:
| Number of Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in Years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding at January 1, 2025 | 13,867,814 | $6.76 | 8.2 | ||||||||||||||||||||
| Granted | 2,580,169 | $19.51 | |||||||||||||||||||||
| Exercised | (761,078) | $3.50 | $ | 12,339 | |||||||||||||||||||
| Forfeited | (763,334) | $17.48 | |||||||||||||||||||||
| Release of shares due to loan forgiveness | (1,894,054) | $0.00 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 13,029,517 | $9.28 | 7.6 | $ | 65,282 | ||||||||||||||||||
| Exercisable at December 31, 2025 | 10,264,986 | $6.70 | 7.2 | $ | 65,282 | ||||||||||||||||||
Options generally vest over four years, with 25% vesting after one year, and the remaining 75% vesting monthly over the next three years. The weighted-average grant-date fair value per share of options granted was $12.27 and $11.36 for the years ended December 31, 2025 and 2024, respectively. The range of assumptions used to calculate the grant date fair value of the Company’s stock option grants for the year ended December 31, 2025 were as follows:
| Expected dividend yield | 0% | ||||
| Expected stock price volatility | 64.7% - 66.1% | ||||
| Risk-free interest rate | 3.7% - 4.4% | ||||
| Expected term (years) | 6.0 – 6.1 | ||||
Stock-based compensation expense related to stock options was $25.9 million and $21.5 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, there was $30.8 million of unrecognized compensation expense related to stock options expected to be recognized over a weighted-average period of 2.8 years.
Partial Recourse Promissory Notes from Early Option Exercises
On August 25, 2021, a related party transaction took place in which three employees, including the Company’s chief financial officer and chief operating officer, early exercised outstanding stock options (the “Early Exercises”) for a total of 2,032,429 shares of common stock. However, the exercises were paid via issuance of partial recourse promissory notes, and as a result, the Company concluded that the early exercises of the stock options will continue to be accounted for as a stock option grant until the time that the notes are repaid. Accordingly, the shares related to the partial recourse promissory notes that were outstanding as of the respective period were included in the option activity table above. The shares for the partial recourse promissory notes that are outstanding are considered legally issued and outstanding but are not reflected as outstanding shares on the consolidated balance sheets and are excluded from the denominator of basic earnings per share. The Company continued to recognize stock-based compensation expense for the awards through the vesting end date or the termination of the partial recourse promissory notes. Because the transaction represents an early exercise, the unvested portion is legally considered restricted stock.
On February 28, 2025, the Company forgave the outstanding principal and accrued interest associated with the partial recourse promissory notes for two employees — the Company’s chief financial officer and chief operating officer. The forgiveness of the promissory notes was treated as a repricing of the associated options’ original exercise price of $3.79 to $0.00. As a result, the Company applied modification accounting under ASC 718 and recognized incremental stock-based compensation expense of $4.8 million during the year ended December 31, 2025. The 1,894,054 shares of common stock associated with the forgiven promissory notes for the chief financial officer and chief operating officer have been reflected as outstanding shares on the consolidated balance sheets and are included in the denominator of basic earnings per share since February 28, 2025.
There is one remaining partial recourse promissory note from the Early Exercises outstanding as of December 31, 2025 associated with 138,375 shares of common stock, which continue to be excluded from outstanding shares on the consolidated balance sheets and from the denominator of basic earnings per share. These shares are included in the option activity table above as outstanding and exercisable as of December 31, 2025.
Modification of Awards
The Company modified unvested options to purchase 61,526 shares of common stock and 44,289 unvested restricted stock awards on March 31, 2025 which were previously granted to certain employees. The awards were modified to accelerate the vesting, eliminating the remaining service requirement, and were deemed fully vested on March 31, 2025. The modification resulted in incremental stock-based compensation expense of $0.7 million during the year ended December 31, 2025.
The Company cancelled unvested options to purchase 40,000 shares of common stock on December 31, 2025 which were previously granted to an employee. The cancellation resulted in accelerated stock-based compensation expense of $0.4 million during the year ended December 31, 2025 that would have otherwise been recognized over the remaining vesting period of the awards.
Performance Stock Options
On August 25, 2021, the Company granted market-based performance stock options to the Company’s CEO to purchase 7,086,246 shares of the Company’s stock at an exercise price of $3.79. On February 13, 2025, the Company granted market-based performance stock options to the Company’s COO to purchase 188,728 shares of the Company’s stock at an exercise price of $20.54. The performance stock options vest in seven different tranches upon the Company achieving stock price hurdles between $25.40 and $508.04 per share over a maximum term of 10 years.
The expense for the performance stock options is recognized on a graded-vesting basis over a derived service period of approximately seven years, but may be accelerated if the vesting criteria are fulfilled prior to the estimated performance period. As of December 31, 2025, all 7,274,974 performance stock options are outstanding, but are not exercisable.
During the years ended December 31, 2025, and 2024, the Company recognized $4.0 million and $5.5 million, respectively, of expense related to performance stock options. As of December 31, 2025, the Company had unrecognized stock-based compensation expense relating to performance stock options of $3.5 million, which is expected to be recognized over a weighted-average period of 2.0 years.
The grant date fair value of the COO Performance Options was $0.9 million, which was estimated using a Monte-Carlo simulation model using the following assumptions:
Expected dividend yield | 0% | ||||
Expected stock price volatility | 60.0% | ||||
Risk-free interest rate | 4.5% | ||||
Restricted Stock
On August 25, 2021, the Company executed restricted stock purchase agreements with three individuals, totaling 3,141,568 shares. The vesting commencement date began June 23, 2021, and the shares vested monthly over four years. However, the purchase agreements were executed in conjunction with the issuance of partial recourse promissory notes for the amounts owed. Accordingly, the shares are considered legally issued and outstanding but are not reflected as outstanding shares on the consolidated balance sheets and are excluded from the denominator of basic earnings per share until such time that the promissory notes have been paid.
On August 1, 2024, in connection with the termination of one of the individuals, the Company exercised the right and option to repurchase the unvested shares for a purchase price equal to the exercise price per share paid for such shares by offsetting indebtedness owed to the Company under the promissory note. The 160,589 unvested options were deemed to have been forfeited and $0.6 million of indebtedness under the promissory note was cancelled.
In connection with the IPO, 600,000 restricted shares were released. As of December 31, 2025, 2,380,979 shares of restricted stock are outstanding. Stock-based compensation expense related to the restricted stock was $1.7 million and $4.2 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, the remaining unrecognized stock-based compensation expense related to the restricted stock was $0.
Restricted Stock Units
During the year ended December 31, 2024, the Company granted 1,000 restricted stock units to an employee with a grant date fair value of $17.93 per share which cliff vest after a specified liquidity event and is subject to continued service requirements. During the year ended December 31, 2025, the Company granted 15,174 restricted stock units to a non-
employee director with a grant date fair value of $27.22 which vest quarterly over three years subject to continued service requirements.
Stock-based compensation expense related to the restricted stock units was $0.1 million for the year ended December 31, 2025. As of December 31, 2025, unrecognized stock-based compensation expense related to the restricted stock units was $0.3 million, which the Company expects to recognize over a weighted-average period of 2.4 years.
Employee Stock Purchase Plan
In May 2025, the Company adopted the 2025 Employee Stock Purchase Plan ("ESPP"), which became effective in connection with the IPO. Under the ESPP, the maximum number of shares of the Company's Class A common stock which are authorized for sale under the ESPP is equal to the sum of (a) 1,111,234 shares of Class A common stock and (b) an annual increase on the first day of each fiscal year beginning 2026 and ending 2035, equal to the lesser of (i) 1% of the aggregate shares of all classes of our common stock outstanding (on an as converted to Class A common stock basis), on the last day of the immediately preceding fiscal year and (ii) such number of shares of Class A common stock as determined by the Company's board of directors; provided, however, no more than 15,279,470 shares of the Company's Class A common stock may be issued under the ESPP. As of December 31, 2025, 1,111,234 shares were available for future issuance under the ESPP.
Stock-Based Compensation Expense
Total stock-based compensation expenses recognized in the consolidated statements of operations were as follows (in thousands):
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cost of revenues | $ | 632 | $ | 948 | |||||||
| Technology and development | 3,897 | 2,250 | |||||||||
| Sales and marketing | 3,917 | 3,764 | |||||||||
| General and administrative | 23,248 | 24,237 | |||||||||
| Total stock-based compensation | $ | 31,694 | $ | 31,199 | |||||||
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.