Nexentis Technologies Inc. Stock Compensation Disclosure
On October 18, 2018, the Company adopted the 2018 Share Incentive Plan (the “2018 Equity Incentive Plan”), pursuant to which the Company’s Board of Directors is authorized to grant options to purchase an aggregate of shares of Common Stock of the Company. The purpose of the 2018 Equity Incentive Plan is to offer attract and retain the best available personnel, provide incentive to individuals who perform services for the Company and promote the success of the Company’s business.
On July 1, 2020, the Board approved an increase to the share option pool under the 2018 Equity Incentive Plan by shares of Common Stock, such that after the increase the total number of shares of Common Stock issuable under the Plan is shares of Common Stock.
On August 29, 2022, the Company adopted the 2022 Share Incentive Plan (the “2022 Share Incentive Plan”), pursuant to which the Company’s board of directors is authorized to grant options to purchase up to shares of Common Stock. The purpose of the 2022 Share Incentive Plan is (1) to afford an incentive to service providers of the Company or any affiliate of the Company, which now exists or is hereafter is organized or acquired by the Company or its affiliates, to continue as service providers, (2) to increase their efforts on behalf of the Company or its affiliates and (3) to promote the success of the Company’s business, by providing such service providers with opportunities to acquire a proprietary interest in the Company through the issuance of shares or restricted shares of Common Stock, and by the grant of options to purchase shares, restricted share units and other share-based awards.
On March 29, 2023, the board approved an amendment to a consulting agreement pursuant to which the consultant will receive restricted shares of Common Stock under the Company’s 2022 Share Incentive Plan instead of options to purchase shares of Common Stock.
On July 31, 2023, the board of directors approved and on October 2, 2023, the Company’s stockholders approved an amendment to the Company’s 2022 Share Incentive Plan to increase the number of shares of Common Stock authorized for issuance under the 2022 Share Incentive Plan by an additional shares of Common Stock.
On December 20, 2023, the board of directors of the Company approved the issuance of an equity grant to executive officers, directors and consultants under the 2022 Share Incentive Plan of aggregate of shares of Common Stock. See note13(17) above).
On September 9, 2024, the board of directors of the Company approved the issuance of an equity grant to executive officers and a consultant under the 2022 Share Incentive Plan of an aggregate of shares of Common Stock. See note13(18) above).
On September 9, 2024, the board of directors approved and on November 3, 2024, the Company’s stockholders approved an amendment to the Company’s 2022 Share Incentive Plan to increase the number of shares of Common Stock authorized for issuance under the 2022 Share Incentive Plan by an additional shares of Common Stock.
On December 23, 2024, the board of directors of the Company approved the issuance of an equity grant to directors under the 2022 Share Incentive Plan of aggregate of shares of Common Stock. See note13(19) above).
On December 23, 2024, the board of directors of the Company approved the issuance of an equity grant to employee under the 2022 Share Incentive Plan of an option to purchase shares of Common Stock at an exercise price of $per share. One-third of the shares subject to the options vest and become exercisable on the first anniversary of the vesting commencement date determined by the Board, and on each subsequent one year anniversary thereafter, over two years provided the Employee remains employed by the Company on each such vesting date, in compliance with this Employment Agreement.
N2OFF, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
NOTE 14 – STOCK OPTIONS (continued)
| 2024 | ||||
| Dividend yield | 0 | |||
| Expected volatility (%) (*) | 122 | % | ||
| Risk-free interest rate (%) (**) | 4.36 | % | ||
| Expected term of options (years) (***) | ||||
| Exercise price (US dollars) | 0.22 | |||
| Share price (US dollars) | 0.22 | |||
| Fair value (US dollars) | ||||
| (*) | The expected volatility was based on the historical volatility of the share price of the Company. |
| (**) | The risk-free interest rate represented the risk-free rate of $ – coupon US Government Loans. |
| (***) | Due to the fact that the Company does not have sufficient historical exercise data, the expected term was determined based on the “simplified method”. |
| Number of Options | Weighted Average Exercise Price | |||||||
| Outstanding at December 31,2022 | 33,533 | 21.00 | ||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited | (6,015 | ) | 8.75 | |||||
| Expired | ||||||||
| Outstanding at December 31,2023 | 27,518 | 23.69 | ||||||
| Granted | 10,000 | 0.22 | ||||||
| Exercised | ||||||||
| Forfeited | (817 | ) | 26.46 | |||||
| Expired | (7,484 | ) | 24.46 | |||||
| Outstanding on December 31, 2024 | 29,217 | 15.38 | ||||||
| Number of options exercisable on December 31, 2024 | 19,217 | 23.38 | ||||||
The aggregate intrinsic value of the awards outstanding as of December 31, 2024 and 2023 is less than $ and $, respectively. These amounts represent the total intrinsic value, based on the Company’s stock price of $ and $ as of December 31, 2024 and 2023, respectively, less the weighted exercise price. This represents the potential amount received by the option holders had all option holders exercised their options as of that date.
The total fair value estimation of the non-cash compensation of the 2024 grant was approximately $. Expenses incurred in respect of stock-based compensation for employees and directors, for the year ended December 31, 2024 and 2023 were $ and $, respectively. The Group did not recognize an income tax benefit related to stock-based compensation as it is not recognized for tax purposes in Israel and a full valuation allowance was recorded as it relates to the deferred tax asset of the Company.
As of December 31, 2024, there were options to purchase shares available for future grants under the 2018 Equity Incentive Plan and options to purchase shares available for future grants under the 2022 Share Incentive Plan
N2OFF, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
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.