Corvex, Inc. Stock Compensation Disclosure

Note 9 – Stock-based Compensation

 

2019 Equity Incentive Plan

 

Effective as of November 18, 2019, the Company adopted the 2019 Omnibus Incentive Plan (“2019 Plan”) administered by the Board. The 2019 Plan provides for the issuance of incentive stock options, non-statutory stock options, and restricted stock awards, for the purchase of up to a total of 266,667 shares of the Company’s common stock to employees, directors, and consultants and replaces the previous plan. The Board or a committee of the Board has the authority to determine the amount, type, and terms of each award. The options granted under the 2019 Plan generally have a contractual term of ten years and a vesting term of four years with a one-year cliff. The exercise price for options granted under the 2019 Plan must generally be at least equal to 100% of the fair value of the Company’s common stock at the date of grant, as determined by the Board. The incentive stock options granted under the 2019 Plan to 10% or greater stockholders must have an exercise price at least equal to 110% of the fair value of the Company’s common stock at the date of grant, as determined by the Board, and have a contractual term of ten years.

 

As of March 25, 2021, the 2019 Plan was amended and restated as a result of which the aggregate number of shares of common stock that may be issued pursuant to the 2019 Plan was increased from 400,000 to 493,333.

 

On April 15, 2022, the Board approved, subject to stockholder approval, an increase in the aggregate number of shares of common stock that may be issued pursuant to the 2019 Plan from 493,333 to 893,333. On June 21, 2022, the stockholders approved this increase.

 

On May 15, 2024, the Board approved, subject to stockholder approval, an increase in the aggregate number of shares of common stock that may be issued pursuant to the 2019 Plan from 493,333 to 1,560,000. On July 9, 2024, the stockholders approved this increase. 

 

As of December 31, 2024, the Company had 713,330 shares available for future grant under the 2019 Plan.

 

2021 Employment Inducement Plan

 

On September 15, 2021 the Company’s Board adopted the Movano, Inc. 2021 Inducement Award Plan (the “Inducement Plan”) without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market LLC listing rules (“Rule 5635(c)(4)”). In accordance with Rule 5635(c)(4), awards under the Inducement Plan may only be made to a newly hired employee who has not previously been a member of the Company’s Board, or an employee who is being rehired following a bona fide period of non-employment by the Company or a subsidiary, as a material inducement to the employee’s entering into employment with the Company or its subsidiary. An aggregate of 133,333 shares of the Company’s common stock have been reserved for issuance under the Inducement Plan.

 

As of December 31, 2024, the Company had 121,611 shares available for future grant under the Inducement Plan.

 

Stock Options

 

Stock option activity for the years ended December 31, 2024 and 2023 was as follows (in thousands, except share, per share, and remaining life data):

 

		Number of Options				Weighted Average Exercise Price				Weighted Average Remaining Life		Intrinsic Value
Outstanding at December 31, 2022			461,326			$	35.10			8.2 years		$	2,034
Granted			107,358			$	18.45
Exercised			(16,390	)		$	6.60
Cancelled			(55,733	)		$	39.90
Outstanding at December 31, 2023			496,561			$	31.95			7.1 years		$	726
Granted			291,948			$	7.04
Exercised			(2,667	)		$	5.70
Cancelled			(64,443	)		$	32.93
Outstanding at December 31, 2024			721,399			$	21.98			7.2 years		$	11
Exercisable as of December 31, 2024			626,943			$	21.34			7.0 years			-
Vested and expected to vest as of December 31, 2024			721,399			$	21.98			7.2 years		$	11

The weighted-average grant date fair value of options granted during the years ended December 31, 2024, and 2023 was $3.57 and $11.10 per share, respectively. During the years ended December 31, 2024 and 2023, 2,667 and 16,390 options were exercised for proceeds of $15,200 and $109,000, respectively. The fair value of the 357,787 and 133,914 options that vested during the years ended December 31, 2024 and 2023 was approximately $3.2 million and $3.1 million, respectively.

 

The Company estimated the fair value of stock options using the Black-Scholes option pricing model. The fair value of the stock options was estimated using the following weighted average assumptions for the years ended December 31, 2024 and 2023.

 

		Year Ended December 31,
		2024				2023
Dividend yield			—	%			—	%
Expected volatility			52.04	%			61.55	%
Risk-free interest rate			4.27	%			3.77	%
Expected life			4.96 years				5.98 years

  

Dividend Rate — The expected dividend rate was assumed to be zero, as the Company had not previously paid dividends on common stock and has no current plans to do so.

 

Expected Volatility — The expected volatility was derived from the historical stock volatilities of several public companies within the Company’s industry that the Company considers to be comparable to the business over a period equivalent to the expected term of the stock option grants.

 

Risk-Free Interest Rate — The risk-free interest rate is based on the interest yield in effect at the date of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term.

 

Expected Term — The expected term represents the period that the Company’s stock options are expected to be outstanding. The expected term of option grants that are considered to be “plain vanilla” are determined using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. For other option grants not considered to be “plain vanilla,” the Company determined the expected term to be the contractual life of the options.

 

Forfeiture Rate — The Company recognizes forfeitures when they occur.

 

The Company has recorded stock-based compensation expense for the years ended December 31, 2024 and 2023 related to the issuance of stock option awards to employees and nonemployees in the consolidated statement of operations and comprehensive loss as follows:

 

		Year Ended December 31,
		2024				2023
Cost of revenue		$	41			$	—
Research and development			1,107				940
Sales, general and administrative			2,077				2,040
		$	3,225			$	2,980

 

As of December 31, 2024, unamortized compensation expense related to unvested stock options was approximately $1.3 million, which is expected to be recognized over a weighted average period of 1.6 years.